Extended Warranty?

[Brax]

I picked up my second SLS today, an '04 with 30k miles on it. I passed on the extended warranty on the car and I am now second guessing it.

My thoughts were. I saved about $9k buying this car over a '07 Buick Lucerne so I have that price gap in my favor. Now that I have two of these, it has me a little worried. A six year warranty from CarMax would run $2k, sounded like a good deal, I just didn't want to spend the extra cash.

I have already replaced a front seat heater and the center brake light on my other SLS, total cost $150. I bought that car this last summer and have put about 3k miles on it so far (bought with 27k miles).

Think it's a good gamble or should I see if I can still get the warranty?
Carmax does charge $50 per visit for warranty work.

[Ranger]

This has been discussed before if you do a search. Many opinions, both ways. Personally I never bought one and I am way ahead, but I do my own maintenance. If you don't/can't, it may be worth it.

[submariner409]

If you're second-guessing on a commercial warranty, why not put $90 per month in your money market and insure yourself? You'll get a bit of interest and, if you don't need all the $$ in 2 years, you will still own the money, not CARMAX.

[turnne]

Thats a crap shoot

To me it all depends on the price to repair the car versus the price of the warranty

I paid $2500 for one that will give my car 48K miles worth of coverage...it is not all inclusive...BUT I feel like I can get the money back in wheel bearings and some other things...AND I can and will take the car to the Cadillac dealer

If it was my own money the trip to the caddy dealer would be questionable

BUT there is one stipulation in my warranty ..the total payout over the warranty term cannot exceed the then current NADA wholesale value of the car


Warren

2002 STS

[Ur7x]

Originally Posted by Ranger

This has been discussed before if you do a search. Many opinions, both ways. Personally I never bought one and I am way ahead, but I do my own maintenance. If you don't/can't, it may be worth it.

Originally Posted by submariner409

If you're second-guessing on a commercial warranty, why not put $90 per month in your money market and insure yourself? You'll get a bit of interest and, if you don't need all the $$ in 2 years, you will still own the money, not CARMAX.

Listen to these guys... They are right... On top of that, based on your post you sound rather "handy" If can fix the small stuff on you car yourself, You will NEVER win with an extended warranty. Most "aftermarket" warranty's are not bumper to bumper, do not cover head gaskets, do not cover the fancy suspension system, have a "max claim" clause, and/or up front deductibles. Also keep in mind that your 04 has the latest version of the N* with better and longer headbolts... While you can never say never the rate of HG failure is way down on these MY's

I used to work in the extended warranty/insurance business. These products are targeted at the poor, to women and the elderly. Most people (the vast majority of them) do not get their money back. It really is an ugly business.

[Ranger]

Common sense will tell you that warranty companies don't make money by making payouts. They are in the business to make money and they do that by taking in more than they pay out, so read the fine print carefully. Some people come out ahead with these things, but I'd guess that the vast majority don't. My philosophy is, why pay in advance for a repair I may or may not need.

If you go for it, general consensus seems to be that GMPP is the best.

[I~LUV~Caddys8792]

I wouldn't not buy one on a used late model luxury car.

[turnne]

Originally Posted by I~LUV~Caddys8792

I wouldn't not buy one on a used late model luxury car.

Well depending on what type of luxury car you are talking about..I would agree

a Lexus LS430..I would agree

a Mercedes S500..I would disagree

I agree that the companies are there to make money...but there are soome cars...Honda Accord, Camry, Acura TL, any Lexus product that I bet 90% of the time they come out ahead...but I would bet on the average STS..they don't

I had a an early 90's S class benz many years ago..I always took it to the MB dealer and it was literally $500 for anything on that car..if not 1000( or more)
I think the wrranty paid about 8 times what I paid for it

because of the high resale car I wasn't at all concenced about the NADA wholesale...at the time I bought the car the NADA wholesale was over $20K
As for the STS I bought I do have some concerns about that value restriction clause...BUT I have always been one to consider the value of the car when I make decisions about whether repairs are worth it or not

I paid $2500 for the warranty on the STS I bought...I think I CAN get the $2500( and then some) at my local caddy dealer...as I recall from experience they love to read the warranty paperwork and then start their diagnosis


Warren

[z06bigbird]

Take a copy of any extended warranty contract to any service manager. He/she will tell you how bad it is. Only cost is a box of donuts or tacos. Seriously. Too much fine print in those contracts for most of us to locate.

GMPP is a good product/service, but third party warrs are typically really bad in my opinion.

[I~LUV~Caddys8792]

Originally Posted by z06bigbird

GMPP is a good product/service, but third party warrs are typically really bad in my opinion.

True. GMPP is the most preferred by a GM dealer, as it covers the most and is the most streamlined to use. Otherwise, if you buy a 3rd party one, Fidelity is awesome (www.JMAGroup.com), but it's hit or miss with those. Some are great to use, and some are a PITA to get paid on, and some are bankrupt, with the warranty holders not knowing.

Originally Posted by turnne

I had a an early 90's S class benz many years ago..I always took it to the MB dealer and it was literally $500 for anything on that car..if not 1000( or more)
I think the wrranty paid about 8 times what I paid for it

I think you misread my statement. I said on a used luxury car, I wouldn't not buy one, so I'd buy one on most anything, except for a Lexus perhaps.

Funny you mention S Class and extended warranties. I've got one on mine and it's already paid for it's self....4 months after purchase. I wonder what the next year and a half holds in stock for me.

[turnne]

Yes..I had an 1992 140...S class diesel that I bought in 1998
Right off the bat door/trunk closing assit pump and a couple of other issues failed...$2000( warranty paid for)...3 months later..AC evap core and the push button control unit on the dash...$5100.00( warranty paid)...and then there were a few others...warranty paid more than 15K on repairs
Those cars are extremely complicated and very expensive to repair... I had all my repairs done at the Mercedes dealer...so that may have had an impact on the price also

Had a buddy that bought a starmarked certified 1992 400SE in 1997...very similiar experiences...two repairs over $4000 in less than a year

BUT I guess you have to think about the fact that my car was 80K sticker in 1992 and his was 87K sticker in 1992

The BMW 740 I traded it in for has definitely been a more reliable car


Warren

[I~LUV~Caddys8792]

Originally Posted by turnne

The BMW 740 I traded it in for has definitely been a more reliable car

Not the best thing for me to hear right now......lol......

Faster, more reliable, but the 140's got the looks and feel that the E38 doesn't.

Maybe I'll get a 00-01 740iL next, in a few years.

[turnne]

I agree that 140 chasis Benz is in a class of its own...definitely my most favorite car I have owned
However if I had had to pay for those thousands and thousands of repiars that were done on it I would probabby be singing a different tune.

I considered a 220...BUT while there were doing the $5000 AC work on mine those were coming in for airmatic suspension problems and computer related issues involved with the command control center...keep in mind those this was the year 2000 and the people bringing them in were the first owners of the new model

But in any case when I traded the 140 I thought something else that was less "shop" likely needed to be in my future

I have owned my 00 740 for about years..I bought it under the BMW CPO program so I had warranty for the first two years...but really its been a good car

I actually think the 2002+ model is VERY nice also..that is much closer to the 140 in luxury


Warren

[Ur7x]

Trying to second guess a extended warranty based on your estimate of a car's expected reliability is also a losing game.

I worked in this industry for over 12 years and I can tell you, you are trying to second guess people with PhDs in advanced math and statistics. Every extended warranty is priced with the expected reliability and expected repair costs built in. Companies who get this number wrong go out of business really fast.

You can use this info to your advantage though. If you take the cost of an extended warranty for a given make/model/year and you divide cost of the warranty by about 4. That is the expected/average cost to repair the car over the term of the warranty.

So if an 3 year STS warranty is $2000 and a 3 year 740i warranty is $3000 you know the STS is significantly more reliable or significantly cheaper to fix.

And before you ask, where did the other ~75% go? Commissions, profit, overhead, and the cost to process claims.

[Ur7x]

So if you continue that example
$2000/4 = $500 over 3 years or ~$170 per year...

Want to guess what I'm averaging a year to keep my car in tip top shape...
Yup amost exactly $170 a year!