Extended warranty is it worth it?

[jlsmith]

+1

Companies that offer an extended warranty or insurance basically try to cash in on fear. "what will happen if ...." Nobody knows, so why worry about it.
I use my common sense and try not to abuse whatever you use. If it breaks after my basic warranty, I just pay out of my own pocket and carry on.

I dont agree with that. Yes some companies do try that aproach but I for one dont. I do offer it to the customer and leave it at that. If they decide they want it or want to know more about it then we go into details. I for one get the warranty on all new tractors i get BUT i also use my tractors for income. I put anywhere from 2200 to 3500 hrs a year on my tractors so the warranty has paid off for me in the past. Now someone who doesnt put that many hrs on a tractor prob doesnt need it. It boils down to what your doing with the tractor and what kind of hrs your putting on it.

 

[mjarrels]

No, I never buy it. My homeowner insurance tried to sell me coverage for items, stove, refer, hot water heater, heat pump, etc. Read the fine print... nothing was covered. Addition profit is what it is.

mark

 

[jlsmith]

No, I never buy it. My homeowner insurance tried to sell me coverage for items, stove, refer, hot water heater, heat pump, etc. Read the fine print... nothing was covered. Addition profit is what it is.

mark

Yes the insurance company has to make a profit why else would they do it. I have had several customers in the past that have gotten the warranty and glad they had it when something went wrong. coverage paid the bill and they were out $0. I even had one customer completely destroy a rotory mower and the insurance company covered it and bought him a new one, he was back in the field the next day mowing again.

 

[JOHNTHOMAS]

Never on a tractor or car myself but I'm not a 2000 hours a year user. That would make a difference to me or if I was like my brother that can break a steel ball.

 

[Jay4200]

Extended warranty is it worth it?

No, if it was, they wouldn't sell them.

Things generally fail early if defective, then don't fail for a long time until they get worn out (known as the "rate of failure bathtub curve"). Extended warranties cover you during that middle period when failures are rare.

JayC

 

[jlsmith]

No, if it was, they wouldn't sell them.

Things generally fail early if defective, then don't fail for a long time until they get worn out (known as the "rate of failure bathtub curve"). Extended warranties cover you during that middle period when failures are rare.

JayC

Thats not true. The coverage we carry is bumper to bumper for the full length of the warranty. I just replaced a hydo pump on a tractor that was at 4500 hrs and the coverage paid for everything even the pick up and delivery.

 

[Travelover]

Thats not true. The coverage we carry is bumper to bumper for the full length of the warranty. I just replaced a hydo pump on a tractor that was at 4500 hrs and the coverage paid for everything even the pick up and delivery.

Yes, it is true, statistically. You are confusing anecdotes with statistical data.

Anecdotally, some people come out ahead with an extended warranty. Statistically, most people lose or it would not be profitable for the insurer. Think about it.

 

[jlsmith]

Yes, it is true, statistically. You are confusing anecdotes with statistical data.

Anecdotally, some people come out ahead with an extended warranty. Statistically, most people lose or it would not be profitable for the insurer. Think about it.

True insurance companies do come out ahead or they wouldnt sell it. I was refering to the comment about the coverage only covering you threw the middel of your coverage. That part isnt true, Ive sold the coverage for the past 5 years and not once had the ins company not fix something that was under warranty. Yes most people will never get a chance to use the ext. warranty and thats what the ins company wants, some will buy the warranty like myself and find it verry usefull. As an example i bought the warranty on one of my tractors a few years back for $1800 and got to use the warranty twice now. The cost to fix the tractor both times included was around $4800 so i saved $3000 by doing so. Its not in everybodys best intreast to purchase the warranty but in my case where my tractors are used everyday 8 to 10 hrs a day it was in my best intreast to do so.

 

[funwithahoe]

Thats not true. The coverage we carry is bumper to bumper for the full length of the warranty. I just replaced a hydo pump on a tractor that was at 4500 hrs and the coverage paid for everything even the pick up and delivery.

I know lots of types of people and this is the final deciding factor for me.

The wealthy people I know buy catastophic insurance (someone sues you for 1 million or your uber expensive barn burns down). The poorer people I know (and love just as much) buy extended warranties out of fear that they might have a $500 repair bill. Mind you they will pay $1500 (on monthly payments) to ensure they don't have this bill.

To the previous poster saying that someone broke something and it was covered by their warranty - No one is saying they won't cover a problem just does it make good business sense to buy coverage like this. If your finances are so tight you can't afford a repair take the warranty money and stick it in a bank!! Pay for the repair yourself - You will be WAY ahead!

 

[leonz]

Yes, it is true, statistically. You are confusing anecdotes with statistical data.

Anecdotally, some people come out ahead with an extended warranty. Statistically, most people lose or it would not be profitable for the insurer. Think about it.

Unfortunately for the end user who may be a homeowner or a man or woman of the soil (I bet you thought I would forget the FHOHH, HCFO, COO) etc. its an algebra problem in its smallest form used in finance.

An example:


The payment period of 6 years maximum for a BX or other beast of burden plus sales taxes set up and delivery charges in the final quote plus the cost if the bumper to bumper warranty is the total purchase cost (zero interest is excluded for the obvious reasons).



If the bumper to bumper warranty is purchased for the seven year life of the loan the time period is 2,190 days over seven years.


The cost is $1,000.00 for the extended bumper to bumper warranty as an example; over the life of the loan being 2,555 days for 6 years/72 months being $1000.00 U.S.D. divided into 72 months-2190 days which gives you the cost per day of 46 cents per day (rounded) not including interest expense on the extended warranty if known or discussed by the machinery seller.


The commercial use of some machinery prevents the use of an extended warranty or shortens it in some cases.