Extended Warranty - purchase at signing or wait?
- Thread starter xavier4or
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catman
Full Access Member
Generally, the costs of warranties only increase, so one advantage would be to buy it at a lower overall price than you might be able to in 4 years.
You also have a bit more leverage to negotiate when buying a vehicle as it is additional profit on an existing sale, so they may be willing to lower their price, especially if you do your homework upfront and shop around. They might be willing to match the best price you receive from an out of state dealer. It's always good to give the business to your local dealer if you like them.
You also can finance it iwith the vehcile purchase if you want - which is not really an "advantage" as you pay interest on it, but it can be helpful in certain situations as the warranties are not inexpensive.
You also have a bit more leverage to negotiate when buying a vehicle as it is additional profit on an existing sale, so they may be willing to lower their price, especially if you do your homework upfront and shop around. They might be willing to match the best price you receive from an out of state dealer. It's always good to give the business to your local dealer if you like them.
You also can finance it iwith the vehcile purchase if you want - which is not really an "advantage" as you pay interest on it, but it can be helpful in certain situations as the warranties are not inexpensive.
I struggled with this and eventually chose to not purchase it when I acquired my LR4. After researching I found that the price difference between brand new and near end of warranty wasn't that great. I drive very few miles (~7k per year). And I have better uses for that money in the meantime. I don't think there is a clear cut answer here, both options have their pros and cons.
No need to pay thousands to a dealer when you can't/won't use the policy for four years. Estimate your mileage over four years then ask them today what they would charge as if it was four years down the road. My guess is that you would find a better return keeping your money and buying right before the OEM warranty expires.
Surfrider77
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Not to mention, if the worst happens and you are in an accident and write the vehicle off, you can just kiss that money goodbye. I always wait until end of normal warranty period approaches before considering extended warranty purchase.
JCDC
New Member
At end of the normal warranty, the extended warranty may not be offered? or more expensive? Is that true?
I have a fairly new 2016 Range Rover Long Wheelbase with 5000 miles on it; the 1st year anniversary date is Oct 31, 2016. The dealer said if I buy it before the anniversary date, they can offer me a 7 years, 100,000 miles warranty (4 years, 50,000 comes with the car) - if before my anniversary date for $ 5000. Is that worth it? or can less expensive else where?
I have a fairly new 2016 Range Rover Long Wheelbase with 5000 miles on it; the 1st year anniversary date is Oct 31, 2016. The dealer said if I buy it before the anniversary date, they can offer me a 7 years, 100,000 miles warranty (4 years, 50,000 comes with the car) - if before my anniversary date for $ 5000. Is that worth it? or can less expensive else where?
umbertob
Full Access Member
First of all, you are asking on the wrong forum if you have a Range Rover. This is the LR4 forum, a car with a very different sticker price.
Secondly, these extended warranties are offered by many different underwriters, and are very much negotiable, as long as you are still under factory coverage. Call 10 dealers (and dealers are only one way to purchase these contracts) and you will probably get 10 different quotes for plans that may sound the same, but may not be - once you read the fine print. 7 year and 100K miles doesn't mean much in itself. Will you get a free loaner car, and for how long? Is there a deductible? Is it an exclusionary plan? And so on...
Obviously, all these insurance companies would love to get your money as soon as possible, knowing full well that they won't have to pay you a dime for a few years, and then they'll do their best not to give you any of that money back even after their coverage kicks in. That's what all insurance companies do, they wouldn't make money otherwise... I don't play that game personally and have never regretted it, but I fully understand people that do, because of the peace of mind thing.
However, you shouldn't get pressured by this snake oil salesman talk "If you buy today, I'll make you a special deal". The guy/gal/dealer gets a nice commission for selling you that policy, that's why he wants your check now. They are not interested in the least in saving you money down the road. In your shoes, I'd keep the factory warranty you've already paid for with your new car, and see how things go. If your car starts falling apart, you may not even want it anymore by the time the factory coverage is up, and you'd never recover all of that premium you paid years in advance if you sell it or trade it. If your car is super reliable, you may start wondering if paying $5K was such a good idea... IMHO, wait and negotiate an extended warranty if and when it's convenient for you, not for them. Extended warranties will always be there.
Secondly, these extended warranties are offered by many different underwriters, and are very much negotiable, as long as you are still under factory coverage. Call 10 dealers (and dealers are only one way to purchase these contracts) and you will probably get 10 different quotes for plans that may sound the same, but may not be - once you read the fine print. 7 year and 100K miles doesn't mean much in itself. Will you get a free loaner car, and for how long? Is there a deductible? Is it an exclusionary plan? And so on...
Obviously, all these insurance companies would love to get your money as soon as possible, knowing full well that they won't have to pay you a dime for a few years, and then they'll do their best not to give you any of that money back even after their coverage kicks in. That's what all insurance companies do, they wouldn't make money otherwise... I don't play that game personally and have never regretted it, but I fully understand people that do, because of the peace of mind thing.
However, you shouldn't get pressured by this snake oil salesman talk "If you buy today, I'll make you a special deal". The guy/gal/dealer gets a nice commission for selling you that policy, that's why he wants your check now. They are not interested in the least in saving you money down the road. In your shoes, I'd keep the factory warranty you've already paid for with your new car, and see how things go. If your car starts falling apart, you may not even want it anymore by the time the factory coverage is up, and you'd never recover all of that premium you paid years in advance if you sell it or trade it. If your car is super reliable, you may start wondering if paying $5K was such a good idea... IMHO, wait and negotiate an extended warranty if and when it's convenient for you, not for them. Extended warranties will always be there.
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mbw
Full Access Member
+1 umbertob.
My 13 is just now at about 49k miles. I'm going to let the warranty lapse and not buy extended. If I need to spend ~$5k on the rig between now and 100k miles..so be it, but I am willing to bet I won't need to.
My thoughts.. insurance is for mitigating risk. Risk of something that would stress you financially (or otherwise). If that risk is high for you, then it could be a good idea. If I had to put $10k or something into my LR4 I could without strain, so I wont worry about this particular type of insurance.
My 13 is just now at about 49k miles. I'm going to let the warranty lapse and not buy extended. If I need to spend ~$5k on the rig between now and 100k miles..so be it, but I am willing to bet I won't need to.
My thoughts.. insurance is for mitigating risk. Risk of something that would stress you financially (or otherwise). If that risk is high for you, then it could be a good idea. If I had to put $10k or something into my LR4 I could without strain, so I wont worry about this particular type of insurance.
jwest
Full Access Member
I paid $4500 for my lr3 ext warranty right before end of factory expiration. It was through the dealer in Tacoma WA and was a 3rd party company. I got the longest coverage possible which was 4 more years and 50,000 more miles. It ended up covering over 3x it's cost.
I don't buy warranties upon beginning of new car purchase because that's like me giving away $ for someone else to use.
Example $5000 invested in oct 2012:
Domminos Pizza 4 years ago would now be worth $20,000.
American Airlines: ....$200,000 !!
Delta, just $20,000
Boeing almost $20,000
Even market indexes up 50% in 4 years
you get the idea
I don't buy warranties upon beginning of new car purchase because that's like me giving away $ for someone else to use.
Example $5000 invested in oct 2012:
Domminos Pizza 4 years ago would now be worth $20,000.
American Airlines: ....$200,000 !!
Delta, just $20,000
Boeing almost $20,000
Even market indexes up 50% in 4 years
you get the idea
