Extended auto warranties?

Good deal or ripoff?
Just bought a '03 Dodge Grand Caravan "program" minivan with 9,400 miles on it.
There's roughly 2 years and 26,000 miles left on the 3 year/36,000 mile factory warranty that covers "everything". Vehicle was put "in service" Sept. '02, so you start counting the time from there.

The drive train has a factory warranty of 7 years/70,000 miles, whichever comes first.
So, I've got about 6 years/60,000 miles warranty left on the engine, transmission, and front drive axle.

The dealer wants $775 for a 7 year/75,000 mile warranty on "everything" except normal wear and tear.
That's not starting here and now, but also starts in Sept. '02 and zero mileage. As I see it, I'd only be getting another 5000 mile warranty on the drive train over and above the original factory 70,000 miles. Also, the "7 year" warranty only kicks in for 4 years after the original factory warranty expires in 2 more years.

Have I confused you enough yet? Is my thinking right on this? What are the chances of not discovering a major defect for 2 years?

This is probably all moot 'cause Miz t. thinks we should get it so (as usual) we'll probably compromise and do it her way.
;-)
Anyway...whaddaya think?

Would you be financially ruined if you took the loss? A $3000 head gasket, a $4000 transmission, an $8000 engine, etc.

The extended warranty insurance issuers have done all the actuary work on what the risks are, and plan to make a bit of a profit too. So, it is a crap-shoot. How do you wish to wager? If it were me, I would not buy it.

It would put a hell of a dent in my Scotch fund though.
I think you're right about the actuarial part. They know the chances are they'll come out ahead on this. If it were strictly up to me I'd turn it down, however...Miz t. is buying it with some money her uncle left her, so I told her this was her show.

If they didn't end up MAKING money selling extended warranties, they wouldn't do it.

So odds are, you won't benefit from it. Because the odds are clearly in favor of the "house".

That being said, I have purchased extended warranty coverage on both of my vehicles. Go figure. :eyes:

Oddly enough we had busted transmissions in the two previous cars.
Only they were still under factory warranty. I don't think we've ever collected (much) from the extended warranty.

I bought a new Tribute a few months ago and got an extended warrantee that take me up to 10/75K (we were allowed to tailor the warrantee to our needs) for $1100.

Since the financing was 0% for 60 months, it costs us just $18.33 per month for 60 months to cover our new Tribute for the next 10 years.

The Tribute is loaded with goodies like a moonroof and power/heated seats, I figured it was well worth it. If any little thing goes wrong, I'm covered 100% and get a loaner and roadside assistance.

You will be able to buy the coverage later, when the factory coverage ends. Extended warranties are good, but oversold.

Also insist on seeing the contract. "Everything" becomes very little when you need the service. Also, where does the work need to be done? Are the participating service centers convenient to where you are now, and are they fanned out enough so that if you break down away from home you will be able to get service?

Can't buy it later, according to them.
If the dealer does the service if free. Otherwise it's $50 deductible and you have to get prior approval.

With all the electronic gear on it, I stand intimidated. I bought the extended package even though I've heard that the dealer makes a tidy profit on these deals. Also, the fact that the motor makes 525 lbs of torque makes me nervous about the life span of the transmission.

That's what I always thought. I'm pretty sure you can buy an extended warranty at any time while the car is under a certain age and mileage. If you find yourself doing a lot of warranty-covered work within the next 2 years, maybe you can consider buying the service agreement later on. Check if you can buy it later and if so, skip it for now.

I don't know anything about Grand Caravans, but we just bought a 99 Accord and we didn't get the extended warranty. We calculated the amount of money we would spend on the warranty vs. the amount we would probably have to spend on repairs during the warranty term and decided it wasn't worth it.

Also, you can buy an extended warranty later. My mom is a loan officer at a credit union, and they sell them there.

$775 is a fair price, if you think you need it. But keep in mind dealers make a killing on these.


Basically you would be paying for "everything" coverage for the period of 3/36 to 7/75

and "powertrain" from 7/70 to 7/75

The odds that you will need $775 of repairs during this limited time frame is what you are gambling on.

Of course, be sure to find out what they mean by "everything"

I know it doesn't cover hoses and fan belts, etc. I basically covers all the "systems" and power items like seats, windows,etc.

The dealer is aatually our next door neighbor and a friend. He really made us a hell of a deal. They have some kind of factory incentive program goin on through Saturday. If they sell so many cars they get a hefty kickback from Daimler Chrysler. He gave me $6000 trade allowance on my '89 Ford Ranger p/u with 120,000 miles on it. It's fairly clean, but still, it's a 14 year old truck. The average retail online is about $1500. We paid $16,500 + the trade. It has all the bells and whistles. That is way below normal retail.

I think it's because their little two year old girl thinks I'm her grandpa. What a cutie.
;-)

I bought and extended warranty for my Corolla. Paid $600 for it, which was a 5 year plan.

I saved $200 in the end as my starter died as did another component 2 years later.

The price to renew for another 3 years was $1500. I did not renew it.

That was a mistake. One major car failure for me now will bankrupt me and I've already considered that option, which in ways is worse than falling on one's sword...