Help! Extended Warranty

[TonyT]

Please, I need some help here. I purchased an Extended Warranty from AAA for my '06 and it is due to expire in August. I have received two quotes to extend the warranty further: 4 years, to 8/16/2017, or 100,000 miles with a $100 deductible for $4497 or 3 years, to 8/16/2016, or 88,000 miles with $0 deductible for $5025. Both quotes include bumper-to-bumper protection. Presently the car has 51,000 miles on the odometer. Given the amount of electronics on the car, I don't feel comfortable not extending the warranty. Any suggestions?

 

[Toms007]

Tony, first off Welcome to CAC. This is a great place where people are friendly.

Now for your question. These cars are pretty good and fairly trouble-free. How long have you had this one? Have you had issues where you have had to use the warranty? Do you have the extra cash to pay for the warranty service? And do you have a reason to think that you are going to have problems?

I personally, would not spend that kind of money on an extended warranty, but I can and do, a lot of my own work. My 01 has 92k on it and I don't worry about it at all. I just finished a 3800 mile trip in it.

Just my opinion, but to me, if you are going to purchase the warranty, I'd go for the $100 deductible. It is less expensive and covers you for an extra year. And if you do have a claim, it's only $100 out of pocket. You'd have to have a lot of claims over the 4 year period to make up the difference.

Again Welcome to CAC and post up some pictures of your ride....we love seeing other peoples cars!

 

[Hib Halverson]

Please, I need some help here. I purchased an Extended Warranty from AAA for my '06 and it is due to expire in August. I have received two quotes to extend the warranty further: 4 years, to 8/16/2017, or 100,000 miles with a $100 deductible for $4497 or 3 years, to 8/16/2016, or 88,000 miles with $0 deductible for $5025. Both quotes include bumper-to-bumper protection. Presently the car has 51,000 miles on the odometer. Given the amount of electronics on the car, I don't feel comfortable not extending the warranty. Any suggestions?

Welcome to the CAC, Tony but wow...you're going to have spent almost 10,000 bucks on extended warranties. That's amazing. Heck, that's a downpayment on a new Corvette.

I can tell you that the electronics you are worried about are more reliable than you think but the vendors of "service insurance policies" (aka extended warranties) love you.


I have a 95 which I bought in 95. I did buy an extended warranty for it but what a waste of money. I never needed it as the only warranty issues with that car occurred during the normal warrany and none of them were electronics.
I have an 04 and have never suffered any significant faults in its electronics.
I have a 12 which, obviously, has not many miles on it but we did not buy an extended on it. It has had one expensive problem, a body issue, but it was repaired under warranty

All that said, I can also tell you that you need to be careful buying extended warranties from other than GM. Read the small-print carefully before you buy.

 

[Bob Chadwick]

Extended warranties generally aren't worth the money unless something happens to you. Most don't pay out what the policyholder puts into it. They are priced based on losses, expenses and profits so by definition they cost more in total than they pay out in claims.

If you need the warranty for piece of mind, check out a higher deductible if you can afford it. Most claims are smaller so the lower deductible policies cost much more than one with a higher deductible, say $500 or so.

And Hib is right about being careful. Limited scope of coverage and exclusions on policies can restrict coverage that you might otherwise think you have. I generally purchase extended policies when we buy used cars. I have had three large incidents on the last three used cars we bought with two not covered. I would have come out better not having purchased the coverage but I'm glad I did because the covered loss was a $5,000 transmission replacement.