Mahindra extended warranty, worth the $$ ?

[MtnViewRanch]

Originally Posted by John N

Isn't that what I said ??

Yes, that is what you said. I had thought that the offer was to make the extended warranty to match what the current new warranty offered is. I bought the extended warranty based on that. When I received the paper work for my extended warranty, it indicated that it was for the drive train only. My mistake in what is offered, that is all. I just wanted it to be clear for those of you that are considering this option. This from a person who has bought the extended warranty and thought that it was a little more than it is. That is unless Dave finds out differently.

[DavesTractor]

Originally Posted by MtnViewRanch

Yes, that is what you said. I had thought that the offer was to make the extended warranty to match what the current new warranty offered is. I bought the extended warranty based on that. When I received the paper work for my extended warranty, it indicated that it was for the drive train only. My mistake in what is offered, that is all. I just wanted it to be clear for those of you that are considering this option. This from a person who has bought the extended warranty and thought that it was a little more than it is. That is unless Dave finds out differently.

I just read the "customer letter" that is sent out (the dealers had not yet received a copy) and it does only say power train extension. I was under the impression it was 2/5, but I was wrong. I've sold a couple that way, and will offer a refund if the customer wishes. It is still worthwhile I think, but 2/5 would be even better. Arghh!!

[Reg]

Originally Posted by John N

Hey there,

My 2615 HST is eligible for the 5 year extended warranty (an additional 3 years) on the drivetrain and engine.

Mahindra wants $303 + $25 for an additional three years. My tractor is lightly used (about 55 hours in 9 months), primarily for field mowing and general schlepping stuff around with the FEL.

What's your opinion?? Is this worth the money??


Thanks!!



John N

NOT worth the money.
Absolutely ALWAYS a BAD bet.
Basically you are "betting against the house".
The house knows the odds a LOT better than you do, they have set their price to meet their profit goal.

If you ALSO subtract out the items that you could fix yourself and minor failures/annoyances that you could "live with" it is an even worse deal.
There are also the failures that they will deny as somehow your fault.

Major failures in engines and transmissions (beyond the initial infant mortality period) are rare these days as long as you keep oil in them and don't abuse them, which are probably excluded in the fine print anyway.

Warranties and especially extended warranties (repair cost insurance contracts) are significant profit items, you can NOT get an expected value greater than the price you pay.

[DavesTractor]

Originally Posted by Reg

NOT worth the money.
Absolutely ALWAYS a BAD bet.
Basically you are "betting against the house".
The house knows the odds a LOT better than you do, they have set their price to meet their profit goal.

If you ALSO subtract out the items that you could fix yourself and minor failures/annoyances that you could "live with" it is an even worse deal.
There are also the failures that they will deny as somehow your fault.

Major failures in engines and transmissions (beyond the initial infant mortality period) are rare these days as long as you keep oil in them and don't abuse them, which are probably excluded in the fine print anyway.

Warranties and especially extended warranties (repair cost insurance contracts) are significant profit items, you can NOT get an expected value greater than the price you pay.

Reg,

I tend to be in your camp regarding extended warranties. I seldom buy them. But I also keep $5000 deductibles minimum on insurance, self insure myself (car damage, not liability) on any car worth less than $20K, etc. I also am happy to fix things myself. But remember that this sort of attitude is not the norm.

All insurance is a losing deal in the aggregate, however it does spread the risk. I'm willing to buy catastrophic type health insurance because I don't want to risk a $500,000 hospital bill. I know the insurance company has it figured out and will win in the long run, but for my peace of mind I am willing to pay a certain amount.

I agree that Mahindra would not do this at a loss, but it is sure a better deal than most extended warranties. If you buy a $500 laser printer they want $150 for an extended warranty, or some other crazy high number that represents 25-35% of the value of a item that normally gets thrown away in three years anyway. If you buy a car, thay are often $1500 extra. Those are poor values. Less than $400 for two years on a $15-20K investment....we are talking about 2%. Not a bad deal, even for a skeptic like me.

Good points you have made though, it just that different people have different risk tolerances.

[Reg]

Right, risk tolerance, probabilities, etc., but most importantly peoples' PERCEPTION of risk.

I still maintain that a piece of equipment that makes it through 3 years without significant "symptoms" has such an incredibly good chance of making it from 3 to 5 years that 3 or 4 hundred dollars has a better chance of earning a return at the casino.
Engines, transmissions, axles, etc. run in oil baths, THAT is your "insurance" against failure. They are KNOWN low failure rate items, "Mature technology" if you will.

What is it, even payout on reds of which there are 18 vs 18 blacks plus the zero and on some wheels the double zero ?
Ummm, 18 to 20 ? for a 1:1 payout ?

I'm so risk averse that I don't even do the roulette wheel, though I understand it to be the best (for the gambler) game to play.
OTOH, I do buy $5 worth of powerball tickets about once every couple of months, but I know that is throwaway money.
$300, $400, I try to not throw away (-:

[MtnViewRanch]

Well, I guess that you guys have better luck than I do, or maybe it is the other way around. I have more than doubled my money on extended warranties. Truthfully I hope to never collect on this Mahindra warranty, I am just hedging my bet that nothing goes wrong.

[jwcinpk]

If I hadn't already had to have the engine replaced in the 3316 I would not buy the warranty. I sincerely hope the new bracing will stop the engine block cracking issue.

[Reg]

Originally Posted by MtnViewRanch

Well, I guess that you guys have better luck than I do, or maybe it is the other way around. I have more than doubled my money on extended warranties. Truthfully I hope to never collect on this Mahindra warranty, I am just hedging my bet that nothing goes wrong.

Luck ?

Might as well believe in the protection of a different color pai----- CENSORED !

Now I'm thinking about self fulfilling whatsits;
(-:

I watch things very carefully for the first 90 days, I believe in a RETURN IT policy for 3 months.
I didn't break it, it left the factory wrong, it broke too early therefore it was defective, etc.
At 3 years it is well and truly MINE, warts and all.
If it has been relatively trouble free for 3 years it is almost certainly not a lemon.
It will PROBABLY last to wear out.
As far as I know extended warranties don't cover wear out.
So, what do you REALLY GET for the $328 ?
and what is it really worth ?

[MtnViewRanch]

Reg, what's up? You have no idea about how or what I do with my cars, trucks, tractors. Like I said, the repairs that I have gotten done in the extended warranty periods of the different equipment that I have has more than paid for the cost of the extended warranties that I have purchased in the past. I am happy for you that you have never needed such a warranty. For me, it has paid off every single time that I have decided to purchase such insurance.

Just stating a fact that happens to apply to me, others will vary.

[Reg]

Originally Posted by MtnViewRanch

Reg, what's up? You have no idea about how or what I do with my cars, trucks, tractors. Like I said, the repairs that I have gotten done in the extended warranty periods of the different equipment that I have has more than paid for the cost of the extended warranties that I have purchased in the past. I am happy for you that you have never needed such a warranty. For me, it has paid off every single time that I have decided to purchase such insurance.

Just stating a fact that happens to apply to me, others will vary.

As you say, what has applied to you (your equipment, your applications, etc).
It is not at all clear that your experience of equipment reliability in your applications is a reliable predictor of other equipment reliability in the applications that others may have.
It is true that there will be always be SOME policies that will pay out more, MUCH more than their premiums.
It is very unlikely to happen repeatedly to the same customer, unless their application is towards the limits of the equipment's capacity.
I am NOT saying that it can't happen, I am not saying that these policies can not pay off.
I am merely saying that they are very unlikely to pay off, they are a bad bet.
For someone looking forwards the future (as always) is unpredictable.

What is known is that the extended warranty writers will make profit on these repair cost insurance policies.
IOW the premium is always significantly greater than the expected value.