re: OT PSA on Extended Auto Warranties

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well mainly i was hoping to hear the model years to avoid

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Most new cars put on the sticker CVT transmission in the description. Avoid the CVT.

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No I have a Jeep

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Now you know thats the same thing

You know what I meant though

My dad got an extended warranty through the dealership he bought his 2007 used Nissan minivan at when they moved to AZ in 2016(don’t hate...we had a small budget). It was only for 2 years. Cost around 1k I think. It was great for him. He got over 3k worth of work covered with it (for stuff that is known to need to be replaced on that vehicle). Didn’t have to pay a deductible for any work covered as long as he brought it to the dealership he bought it at. Gave him a free rental car as well while his was being repaired.

He was stressed out enough from the flood. Having an extended warranty at least gave him some peace of mind.

oh ok, so then they are still using them today?

i thought they stopped using them after all the failures became a known issue?

This is definitely true about 3rd party warranty not sold through the dealership. An independent shop can then choose to accept them or not. For those, I would agree. Don't do it. When I worked in an independent auto repair shop we just stop accepting them. They pay what they are willing to pay, which is usually considerably less than you would normally charge.

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Are dealer-backed extended warranties a scam too? 

This post was edited on 1/22 at 12:57 pm

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the first 35k or 50 or 100k is covered any way by the car manufacturer. The time for extended is after that.
No need for double coverage.

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an extended warranty that covered me to 100,000 miles after the factory warranty

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I'd be very surprised if it is an additional 100,000 miles. This is one way that they get you.

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lsunurse

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I hate to tell you, but you didn't get your warranty for free. When your salesman was negotiating with you, likely using some type of 4-scare, they left a bit of leg room in those numbers, which would cover the warranty if they gave up reserve.

Ie:

I submit your deal through route one, dealertrack, etc. I get back calls from several financial institutions. These calls include whatever terms that the institution is willing to give you.

For this example, we submitted you to Capital One, your Local CU, and Chrysler Capital.

Cap One came back with a 4% buy rate, your local CU wasn't even competitive (6%), and Chrysler came back with 4% also. All were willing to go up to 75 months for that rate.

When your salesman first came with your numbers, it was based on 8% and 60 months. "OMG, IT IS SO MUCH HIGHER THAN I EXPECTED."

When he comes back the 2nd time, his numbers are based on 8% and 72 months. "THAT IS MUCH CLOSER. I CANNOT PAY THAT THOUGH. IT IS STILL TOO HIGH."

When he returns the final time, his numbers are based on 8% and a 75 month term. "I GUESS I CAN DO THAT."

Now, it is time for the finance guy to get you. He pats his salesman on the back for a job well done, bc his salesman has left him plenty of room to give you a "free" warranty.

So, you sit down with the finance guy, and you know that your note is in the 540's. Well, 540's gives the finance guy plenty of room to work with. They 4-scared you using the 8% number and can really get you financing at 4%.

The 8% was based on adding 2 points to the local credit union's buy rate, which would allow them to get 2% in finance reserve. However, they'll sometimes get a bonus for deals through Chrysler Capital, so they never planned to use the local CU anyway.

Your finance guy just dug into the reserve a little to make it appear as if you were getting the warranty for free. It sounds like you were a layover, and that dealership LOVES you as a customer.

DISCLAIMER: manufacturer dealers can obtain AMAZING rates; you might not get that amazing rate, but the finance companies look out for who is responsible for the majority of their customers

Buying the extended warranty can be a good value depending upon the vehicle. But you should never buy an aftermarket warranty.

My last side-by-side had $4,000 in warranty claims. 3800 of that was my own fault