Looking to purchase 03 Seville SLS ....

I'd think twice on the warranty. If it's offered for X dollars, chances are, you're NOT going to use that amount fixing the car. Warranty companies don't stay in business offering $1500 warranties on cars that will cost them $2500 to fix.

If they're getting $2800 for that warranty, that's a lot of money. I didn't put $2800 into my '97 Cadillac in repairs and maintenance COMBINED. And I drove it to 156k miles (and it's still running like a champ).

I can't imagine spending almost $3000 on repairs to a 2003 SLS, especially for just one and half more years. That's over $1500 a year in repairs. Not likely. Instead of giving that money away to a warranty company (who won't refund you when you don't use it all), put it in an interest-bearing account and make some money on it -- and it'll always be there if you need it. When you don't need it, go on vacation.

Having the remainder of the factory warranty is good -- it gives you assurance that it won't blow up on your way home. But when you consider that most issues are worked out in the first year of ownership (at least that's how it's been on both of my Cadillacs), I think you're free and clear at this point.

Jadcock and I are fighting a uphill battle here... :thumbsup:

One more time with feeling :lol:

I have never bought an extended warranty on any car I have ever owned regardless of how complicated, expensive or fancy... And I have never regretted this decision. BTW I have owned some pretty bleeding edge iron (Toronado, Allante, STS) Interesting that the simplest "car" I have ever owned (A POS Ford F150) was the biggest lemon and cost the most to repair.

I worked in the insurance industry for over 13 years and I know how the finances work. Jadcock is right... In the long run you will loose money buying these policies... Even if everything on Z06's first list fails in the next 2 years you would still have been money ahead not buying the policy...

A couple of things to consider...

These polices are fronted with a TON of commission (40-50% in some cases)... Most dealers will make more selling this policy then they will on the commission of the car... hence the high pressure... If you decide to go for it... Negotiate HARD.... They have tons to move on these.

Remember the sales people are trained to sell these and are trained to make you feel like you are risking life and limb if you pass... You aren't.

Next read the fine print.
YOU HAVE TO READ IT ALL AND READ IT CAREFULLY... Look for exemptions or look out for policies that only describe specific parts that are covered.

The top of the line GMPP plan is complete (with a price to match) most after market polices will not cover head gaskets or the suspension... So why bother? Many only cover the "moving parts of the power train"... This is a classic line in most policies.. another is "lubricated parts of the power train". Be careful these polices are written to benefit the insurance company not you. Both of the above clauses eliminate the gaskets, sensors, injectors, and all of the expensive bits... The insurance company is only on the hook if you "throw a rod" a very rare occurrence these days

If you go for a company other then GMPP (and I would definitely not do this) Google the "'company X' and problems" or "'company X' and claims" and see what level of customer service their adjusters deliver... I'm married to a former adjuster :lol: and I would rather not spend more time in my life dealing with them. :lol: :lol:

Also try to determine the financial viability of the company... If the company goes broke and some do.. Your policy is worth nothing. This too is a risk... even companies that look solid can and do go belly up if the CFO makes a couple of bone head investments.

Whatever you do... Good Luck and enjoy your new car! :thumbsup:

Edit: Oh ya... service the coolant early and often!

Ur7x said:

I worked in the insurance industry for over 13 years and I know how the finances work. Jadcock is right... In the long run you will loose money buying these policies... Even if everything on Z06's first list fails in the next 2 years you would still have been money ahead not buying the policy...

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Thanks for that bit of info.

People usually don't recognize that insurance companies are businesses just like everything else. They're there to make money. Making money is what they do and they're good at it.

The premise of insurance is to cover an expense that you couldn't otherwise cover. Like health insurance and (possibly) home insurance (though the mortgage company usually REQUIRES that). Everything else is on the sidelines. Like all those "extended warranties" you get through Best Buy, etc. They push them hard because the sales people have a quota. Those warranties are pure profit for the store. Extended vehicle warranties are the same way. There are always stories of "boy, the insurance company lost big on me". But you have to KNOW that those stories are the minority. If they weren't, that insurance company wouldn't be in business.

It's not a bad idea at all to squirrel money away for a rainy day. But keep YOUR money YOURS. Don't give it away to some guy who's getting a big commission off your sale. Put it in an interest-bearing account and sit on it. If you need it, it'll be there. If you don't, you're money ahead.

I've never owned an extended warranty either. And I just jumped out of a 160k mile Cadillac into a 60k mile Cadillac. Oh my gosh, am I crazy??

Extended warranties for appliances and electronics are the big losers. A good extended warranty for a vehicle is never a bad decision, especially a vehicle like a Cadillac, BMW, Lexus etc. These cars have way too many failure points that are costly to fix when they do fail. All of them, not just one or the other.

Ur7x is exactly right, the key to getting the most out of a warranty is finding one with the LEAST exclusions or NO exclusions, finding one that is ESTABLISHED and has existed for along time, and *MOST IMPORTANTLY* check THE MAXIMUM COVERAGE PAYOUT OF THE WARRANTY ON THE CONTRACT!!!

Some warranty companies, in addition to getting away with sneaky exclusionary policies, also limit the maximum payout the warranty will give REGARDLESS of whatever parts are covered. They may say in fine print "Maximum engine coverage 2500, Transmission 1500, Differential 1500 etc etc". These are the dangerous kind.

Automotive warranty companies *do not* always win on individual policy basis, they need to have a razor edged business plan for warranties sold as a whole. In fact, a poor business plan is why MANY of the earlier warranty companies folded when their offshore holding entities went broke. They were paying out policies in good faith out of a fund that was getting smaller and smaller. In fact, in a policy that cost me 1500.00 on my 1996 Lincoln Continental, SmartChoice Warranty Co. actually ended up paying out *MORE* in suspension repairs on my car than the cost of the warranty, as well as a couple of other claims. The way automotive extended warranties make money is not necessarily on each individual policy but by applying a heavily engineered calculation or spread to the total warranties they sell. They expect that say for ever 4 warranties sold, 3 people will never have more than a 500.00 claim, or will never make a claim period. These are the LIONS share of policies that are sold on your average Focus or F150 Pickup truck.

Ill give you an analogy you can use... Its just like with "mail in rebates" you see all over the place now. Why dont they just GIVE you the discount? Why? Because they are FULLY aware MOST people will NEVER get around to actually mailing the stupid things in, EVEN when it could result in some products ending up free or nearly free. Still, some people *DO* mail all of their rebate coupons in and guess what, they DO get paid.

Warranties are the same way. So if you are purchasing a vehicle with a potential for expensive repairs, you should be the one "mailing in the coupon". You WILL need it at some point. The key is to find a warranty with a high or unlimited maximum covered payout, AND that has an established track record. GMPP and WarrantyDirect rank among the best. Remember also that most of the good policies give you the ability to exit the warranty early and get most of your money back if you change your mind.

You wouldnt buy a NEW car without an expectation of a comprehensive warranty, and I guarantee you you are paying for it in the price of the car. "Certified" pre-owned is the same way.

Playdrv4me said:

In fact, in a policy that cost me 1500.00 on my 1996 Lincoln Continental, SmartChoice Warranty Co. actually ended up paying out *MORE* in suspension repairs on my car than the cost of the warranty, as well as a couple of other claims. The way automotive extended warranties make money is not necessarily on each individual policy but by applying a heavily engineered calculation or spread to the total warranties they sell. They expect that say for ever 4 warranties sold, 3 people will never have more than a 500.00 claim, or will never make a claim period.

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That's right -- and that's exactly my point. The mast majority of warranties they sold for 1996 Lincoln Continentals cost them MAYBE $500 as you suggested. There are a relatively few stories like yours, where you made money on the warranty. If you did, that's great. But I guarantee that it's an exception and not a rule.

I guess your point is that even though cars may require repair, most people will never actually follow up and induce the warranty coverage. I don't think people have that much money to waste -- I believe that if someone has bought the coverage, they'll use it to its fullest. Maybe I'm wrong, but I suspect that I'm not.

You're right about the mail-in rebates. If perhaps EVERYONE mailed them in, they may not be able to afford to do it. Sort of like coupons. Many people never use them, so the financial hit to the company isn't that great. But here again, it's my belief that if someone's forked out almost THREE THOUSAND dollars for a warranty that lasts 18 months, they're going to bring that vehicle in for everything and anything. If they don't, you're right -- they're throwing money away.

But like UR7X said, I always prefer to self-insure. I guess that's my philosophy about a lot of things, like social security. Let me keep MY money, and let me worry about MYself, investing it as I please. I don't need the government keeping it and doing what they like with it. Just like with extended warranties, I don't need to finance GMPP's coffers when I know I can pay that out myself. Let's face it, if you can afford the extended warranty, you can afford to put that exact amount into the bank account.

I guess I'm done :horse:

jadcock said:

Let's face it, if you can afford the extended warranty, you can afford to put that exact amount into the bank account.

I guess I'm done :horse:

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Thats true, except that remember that for better or worse, people usually finance the cost of the warranty into the price of the car and it makes up a small piece of their monthly payment, rather than 3000.00 up front. In that case it makes taking a 2 or 3000.00 hit all at once when it needs fixing that much less appealing, despite the fact that you are paying interest on that same 2k for the warranty by spreading it out over time.

I think there are valid points on both sides of the table for warranty coverage or self insurance. And I tell you what, Im willing to put my money where my mouth is on this one.

I just bought another car and in this case I went ahead and got the warranty. I have 60 days to cancel it and get my money back so Ill be considering both sides of the argument here over the next couple of weeks or so. (I wonder what happens to the dealership's cut if I cancel it?)