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Bought my wife a new Honda Pilot Friday...extended warranty sales pitch.
Posted on 5/17/21 at 10:23 am
Posted on 5/17/21 at 10:23 am
Got a good deal but when I got to the finance portion they put on the heavy push to buy every extended warranty under the sun. I was up front with the guy and told him I wasn't interested. He insisted on going through the sales pitch for each one. He got pissed and left the room when I again told him I wasn't interested. He came back and said I guess you will be the 10% of people that take on the risk. I thought to myself 90% of the people that come in here fall for this bullshite.
These dealers must make a shite ton of money on these extended warranties.
These dealers must make a shite ton of money on these extended warranties.
31
Posted on 5/17/21 at 10:26 am to lsufan1971
quote:
Got a good deal
Hard to believe
Posted on 5/17/21 at 10:33 am to lsufan1971
quote:
He came back and said I guess you will be the 10% of people that take on the risk. I thought to myself 90% of the people that come in here fall for this bullshite.
It isnt even close to 90% of people get the extended warranty. Just a pressure sales tactic.
And extended warranties are almost always a bad deal, especially on a Honda.
quote:
These dealers must make a shite ton of money on these extended warranties.
Dealers make money in only 2 places really now:
1. Service center - which is why you should never take your vehicle to the dealer's service center unless you got free maintenance of some kind, they ARE the most expensive compares to 3rd party shops
2. Finance office - They will jack up interest rates based on what the bank sends back to make a buck. They make big money on "accessories" like nitrogen filled tires, window tint, paint protection packages...extended warranties are a HUGE money maker for them as well.
Posted on 5/17/21 at 10:34 am to lsufan1971
Can you give any tips on how you arrived at a price? I've read conflicting reports such that inventory is low, they aren't budging, etc.
Posted on 5/17/21 at 10:37 am to lsufan1971
I think I read the dealer gets a 40% commission on every extended warranty. So at 60% of what you are actually paying, it's still profitable for the warranty company to sell you the warranty. You are essentially paying a 60% premium on what they are calculating as the effective risk profile. Put the money aside for repairs and sleep easy. You will lose more sleep anyways when you need a repair and you arent sure if it's even covered by the warranty.
Posted on 5/17/21 at 10:39 am to meeple
quote:
Can you give any tips on how you arrived at a price? I've read conflicting reports such that inventory is low, they aren't budging, etc.
Majority of cases right now a "good price" right now was not a good price some months ago. Fact is right now used and even new cars are in short supply so "Deals" are much harder to be had. Doesnt mean you still cant some money off a vehicle, but it probably wont be as much as it was before all the shortage. Think I just read a report that new car inventory is about 1/3 less than it was a year ago now.
Doesnt mean you cant get significant money off certain vehicles though, just use truecar as a good reference point.
For example I'm seeing little to no money off many vehicles, but some, like say a Nissan Titan, is discounted many thousands still.
This post was edited on 5/17/21 at 10:42 am
Posted on 5/17/21 at 10:42 am to lsufan1971
Are there cases where the extended warranties are worth it?
Posted on 5/17/21 at 10:44 am to lsufan1971
When I bought my wife's car a few years ago and got to the warranty pitch, I remember the finance guy dramatically unfurling the pamphlet listing everything possible thing that could break on a car. I still declined it, but I can see how they sell so many. Considering how many people already over-extend themselves on car notes and/or have very little in savings, any possibility of having to come out of pocket even for a couple thousand probably scares the shite out of them.
This post was edited on 5/17/21 at 10:45 am
Posted on 5/17/21 at 10:48 am to lsufan1971
quote:
I guess you will be the 10% of people that take on the risk.
Had the same thing happen when I went with my mom to buy her CRV. I asked the guy if your cars are so bad and need another warranty why am I even here? I should terminate the deal if Honda's are such bad cars. I know people are stupid but there is no way 90% of buyers are buying those.
Posted on 5/17/21 at 10:49 am to BlackPawnMartyr
quote:
Are there cases where the extended warranties are worth it?
Bought an extended warranty on my new 2013 F-150- ended up being in the shop at least once a year for A/C problems, and I needed a turbo replaced in 2018-2019. Definitely paid off for me- sold that truck as soon as the warranty expired.
Bought the extended warranty for wife's 2008 Escalade, purchased in 2010, which ended up needing new $1,700 shocks, among other smaller repairs. It probably ended up being 'prepaid maintenance', but with as many electronics and small motors, etc on some cars, I usually get them, but I probably would not get one on a Honda/Toyota.
ETA: You never know if paying for the warranty pays off until you need it, or the warranty expires.
This post was edited on 5/17/21 at 10:51 am
Posted on 5/17/21 at 10:50 am to Brummy
quote:
When I bought my wife's car a few years ago and got to the warranty pitch, I remember the finance guy dramatically unfurling the pamphlet listing everything possible thing that could break on a car. I still declined it, but I can see how they sell so many. Considering how many people already over-extend themselves on car notes and/or have very little in savings, any possibility of having to come out of pocket even for a couple thousand probably scares the shite out of them.
I mean that's exactly why they use this tactic.
Finance this $1k extended warranty now because it could save you from shelling out $2.5k at once for this repair before 100k miles is up!
People are so broke they get scared of anything "Big" happening at once and would much rather add a paltry $15 a month to their 6 years of payments to "cover themselves".
Posted on 5/17/21 at 10:50 am to lsufan1971
I go through the entire spill with them. It usually costs $6,000-7,000 for their premium package.
I always offer them $.25 on the dollar. Some will go through the entire huff and say that’s absurd. I’ll then say if you’re product is excellent this should be pure profit. You either believe in your product or you don’t.
Now some folks will say “you’re full of crap”. I’ve done it 4 times and it has always worked. I paid a flat $1500 for the Subaru this past Monday, Feb 2020 did it with Toyota Tundra. Think I paid $2000 though for max everything with 7/125,000. This is the ridiculous gap, warranty, and all the other nonsense. I feel the convenience is worth the paltry price I pay up front. I don’t finance this stuff.
You have to be aware what the break point is in value for you and it’s only worth it if you plan to keep the vehicle long term.
I always offer them $.25 on the dollar. Some will go through the entire huff and say that’s absurd. I’ll then say if you’re product is excellent this should be pure profit. You either believe in your product or you don’t.
Now some folks will say “you’re full of crap”. I’ve done it 4 times and it has always worked. I paid a flat $1500 for the Subaru this past Monday, Feb 2020 did it with Toyota Tundra. Think I paid $2000 though for max everything with 7/125,000. This is the ridiculous gap, warranty, and all the other nonsense. I feel the convenience is worth the paltry price I pay up front. I don’t finance this stuff.
You have to be aware what the break point is in value for you and it’s only worth it if you plan to keep the vehicle long term.
This post was edited on 5/17/21 at 10:54 am
Posted on 5/17/21 at 10:56 am to BlackPawnMartyr
quote:
re there cases where the extended warranties are worth it?
One thing to consider is people still think of extended warranties in terms of engine and transmission repairs which are rare on today’s cars. But most vehicles today are loaded with electronics. Navigation systems , complex sound systems, multiple cameras, lane change sensors, even autopilot/ self parking technology. I have had to replace a nav:audio unit, two backup cameras, and a power mirror. These were cover during the standard warranty period on a Hyundai and a Lexus.
Posted on 5/17/21 at 10:57 am to LSUGUMBO
quote:
usually get them, but I probably would not get one on a Honda/Toyota.
I cracked a rim and blew out a tire on my Tundra last summer. The rim itself was about $400 (dealer price) and the tire was about $250.00.
They replaced both for $0 because I bought the warranty and negotiated it down.
There are instances it is worth it. I drive through construction zones a lot so in this case tire and wheel saved my butt.
Posted on 5/17/21 at 11:03 am to lsufan1971
Last vehicle I purchased I told the salesman that I did not want any extended warranties and to pass that along to finance. And I also had a quote from my credit union that they needed to meet or beat.
At the finance office, they beat the interest rate and we processed the paperwork without discussion of additional warranties.
That's the way it should happen.....Sterling Automotive
At the finance office, they beat the interest rate and we processed the paperwork without discussion of additional warranties.
That's the way it should happen.....Sterling Automotive
This post was edited on 5/18/21 at 12:00 pm
Posted on 5/17/21 at 11:04 am to meeple
quote:
Can you give any tips on how you arrived at a price?
Wife wanted the Black Edition Pilot. They had 1 on the lot. Sticker was 51K and some change. Dealer was Richards Honda. I had an email quote from Team for 46K on a Black Edition. Sent the email to my Richards rep and said sell me the car for 44,500 and I'll buy from you. He got to my price pretty quick and gave me $500 more than what I was willing to take on my trade. The new Pilot is a redesign and hitting showrooms in the fall. They are dealing on the Pilots right now. You should be able to get in a 7P touring for 39K. Honda has .09% financing up to 60 Mo right now as well.
This post was edited on 5/17/21 at 11:11 am
Posted on 5/17/21 at 11:04 am to DiamondDog
quote:
They replaced both for $0 because I bought the warranty and negotiated it down.
I got the tire/wheel warranty on wife's Atlas- these usually pay for themselves the way she drives
The CPO Atlas warranty plus the remainder of the factory warranty brought us out to 7/84,000- guy pitched us the extended warranty packages, and I asked 'won't the factory warranty cover us longer than these extended warranties?'
He moved on to the next section.
Posted on 5/17/21 at 11:14 am to lsufan1971
It works because it is an extension of the model that it's all about the monthly.
Most dealerships know the majority of customers could give a rat's arse about the total price of anything. It's all about how much a month.
So if a car note is $435/month, and to add the extended warranty is say $40/month, they know most people will say, well I mean, I'm already at 435/month, what's another 40? Especially if the finance guy then extends the term by 6 months so the monthly stays at 435/month.
Besides, what are most people going to do with that extra 40/month? They aren't going to save it for a future repair.
This is another reminder that while this makes sense to the citizens of the MT, we are like 5% of the population. The other 95% who need Dave Ramsey in their lives will easily fall for that monthly add-on of an extended warranty.
Most dealerships know the majority of customers could give a rat's arse about the total price of anything. It's all about how much a month.
So if a car note is $435/month, and to add the extended warranty is say $40/month, they know most people will say, well I mean, I'm already at 435/month, what's another 40? Especially if the finance guy then extends the term by 6 months so the monthly stays at 435/month.
Besides, what are most people going to do with that extra 40/month? They aren't going to save it for a future repair.
This is another reminder that while this makes sense to the citizens of the MT, we are like 5% of the population. The other 95% who need Dave Ramsey in their lives will easily fall for that monthly add-on of an extended warranty.
Posted on 5/17/21 at 11:35 am to lsufan1971
Reminds me of the John Pinnete skit on extended warranties. "Is it going to break? If it is I dont want to buy it"
Posted on 5/17/21 at 12:01 pm to lsufan1971
And know, if your Honda ever gets serviced anywhere other than a Honda dealership, your extended warranty, that you paid thousands extra for, will be null & void.
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