Auto extended warranties

[Alan L.]

Have any of you purchased extended warranties for vehicles off the internet? I'm fixing to buy a new Yukon XL 4WD and called 2 GMC dealers to get quotes on the 5yr 100K extended warranty. For $0 deductible its $2,385, for $100 deductible its $1920 and for $200 deductible its $1,575. I only paid $1275 for the one on my 1997 Suburban when I got it.

I found two online warranties for $1,250 - Warranties Direct,and 1 Source Warranties. They have wear & tear coverage, and cover everything except listed items. They say they are good anywhere because they pay the repair facility using a corporate credit card.

One of the dealers I spoke with (who of course wants to sell THEIR warranty) said they won't honor the third party warranty. My response was, what is there to honor? All you do is take their credit card charge over the phone. The dealer response was that they WON"T accept payment from a warranty company period.

Do any of you have experience with these internet warranties?

Alan L., TX

 

[looch]

First off, I've never heard of a third party warranty company. Sounds good, though.
As far as your dealer not honoring the warranty, were you talking about this to a sales person or service person? I can't understand why they would even care - it's not like they aren't getting paid. Is it even legal to refuse payment?

 

[cowboydoc]

Alan,
My personal opinion is that the way vehicles are made today you are going to have little trouble before 100k anyway. If you do that $1250 will cover alot of repairs. Granted you may do some major damage but it's not likely. When I gamble I always gamble with the house and this is the same thing. They're gambling you won't have problems and must be right or they wouldn't be in business. On big ticket items like house, liability, comprehensive yes but I just don't see the extended warranties paying in the long run. Plus like you've found it is difficult to get dealers to accept the warranty and alot of times the warranty company will also deny the warranty for bizarre reasons.

 

[Anonymous Poster]

Alan,

This is a test... out of the $1250. spent on the 97 warranty... how many times did it go in the shop, add it up, would have the normal repair charges been over $1250 ?

Some people need that extended warranty like my wife... she spent $950 for extended coverage a few years back on a '93 Lumina APV... warranty repairs exceeded $6000.

She just got a lease turn-in '98 Explorer, extended warranty about $650., had it for about 3 weeks and now having a Ford engine installed...

I've never bought one, never have any major repairs to repair...

Extended warranties are big money most of the time, big money you the consumer shell out, big profits @ the selling dealer and company end... until the company goes bankrupt and then that $1250. super duper do-all that covers everything warranty is now a worthless piece of paper...

Most dealer's won't accept extended warranties unless they are a major in the field, and have a long established track record of payment...

It's not against the law to reject third party warranties... but it is against the law not to pay the dealer for the parts and labor by the third party extended warranty company that's half way across the country and decides the contract is invalid and they just decided not to pay the dealer because the "i" wasn't dotted or "t" wasn't crossed... Called the "wiggle factor", they somehow wiggle out of paying that poor dealer, meanwhile the consumer is driving down the road with their repaired vehicle. The dealer won't pay an out-of-state attorney thousand's of dollars to "collect" it's monies...

So... most don't accept them from unknown companies...

By the way, that $1250. extended warranty cost the dealer on the average about $550...

 

[mrolson]

I just bought a new Ford 150 XLT 4WD and I decided against the extended warranty (at first). When I took delivery, one key wouldn’t work, they have the smart chips in them. Anyway, it to 40 minutes to reprogram the truck with new keys, hooked up to some computer (running windows /w3tcompact/icons/blush.gif) While talking with the service rep, he indicated these things are all electronics. I talked with another dealer and a few other people and they said get the warranty, not third party. So went back to the dealer and negotiated the 6yr/100K factory warranty. Its all covered except for wear items. Ford wanted $2300, got the dealer down to $1450. If I don’t use it, I have a good truck. If I do, then it’s gone before the warranty expires. Ah, piece of mind (and an empty wallet).

Mark

 

[glennmac]

I've never bought an extended warranty on anything, for exactly the reasons stated by Doc and JMIII. Dont like insurance either. If I could have back all the money I have paid in various insurance premiums over my life, that would be a lot of money.

 

[Alan L.]

I'm tempted to do without the warranty. However my 97 had some repairs under the warranty. The biggest item was a new A/C compressor at 98,000 miles! That would have knocked a big hole in that $1250. They also replaced the steering sensor 3 times (once under the regular warranty, once under the extended warranty, and the last one I paid $250 for myself since it was over 100K miles). Th drivers side power seat went out, but unfortunately it had 120K miles on it and cost me $400 at a nondealer.

I can tell you that I had absolutely no hassles with the extended warranty. It covered everything that went wrong, plus furnished me a rent car.

The Suburban is the best vehicle I have ever owned in terms of comfort and utility; however it is not the most reliable.

I have been lucky at 128K miles not to have had transmission problems, but aren't the engine and transmission guarantee 100K miles anyway?

Yes, vehicles don't seem to require the number of repairs that they used to, but when they do WOW. The computer that controls the engine is about a grand, A/C repairs can easily be over a grand, transmission rebuild more than a grand.

If I know the engine and trans are covered for 100K I might go naked after all. Anyway you guys have answered my question. Apparently none of you have any experience with the online warranties, and don't sound real enthusiastic about them. The GM warranty is just too expensive.

Alan L., TX

 

[glennmac]

<font color=blue>replaced the steering sensor 3 times </font color=blue>

Alan, you're hexed. Under no circumstances should you buy an airplane.

 

[Alan L.]

pbenvan - I got directly in contact with the business manager at the dealers and got quotes from them. I told them that the price of the warranty would weigh heavily in my decision as to which dealer I would buy the truck from. I just hate the way car purchases are done. You make a deal, go into the business or finance manager's office to sign the paperwork and thats when they try to sell you the warranty. I had been told there was alot of fluff in the pricing and I wanted to flesh it out ahead of time. However I called 2 dealers and they both gave me identical quotes and said that they are not negotiable. So I'm back to square one.

The other thing I hate about buying a vehicle is the trade in. Edmunds values the trade-in of my 97 4 X 4 at about $15K. The Kelly Blue Book "tradein" value is only about $11,800. Big difference. Of course the dealer will only offer about $10K probably.

Since I live in the middle of nowhere its very difficult to sell the vehicle myself. At least in Texas, the 6.25% sales tax is only on the difference, so if you sell it yourself you have to overcome the extra sales tax to break even.

The other thing is that I still owe about $8K which means the buyer has to go to some trouble getting the title.

The 97 'burb was supposed to be my wifes car to be driven maybe 10K miles a year plus annual trips to Colorado for skiing. I started driving it my 100 mile round trip to work and it was so incredibly comfortable on my back, I just couldn't give it up. So I quickly put over 100K miles on it and then got me a Ford pickup to drive and turned the 'burb over to my wife.

The truck is still very nice, but I'd like to get a new one that SHE will drive. Before she started driving the 'burb she thought it was too big and wanted to keep her Dodge Caravan (she's only 4'11"). However since she has been driving it for about 5 months now, thats all she wants.

Alan L., TX

 

[scruffy]

Auto repairs can be spendy....an anti lock brake computer can run up to $3000, don't want to buy one of those very often.