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post #13 of (permalink) Old 12-15-2005, 04:15 AM
Spike
 
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Quote:
Originally Posted by RSnyder
Like any other extended warranty, you will on average make out better by not getting it, but if you happen to be unlucky, you could make out MUCH worse. Many people like the security of a known higher than average cost as opposed to an unknown cost that will probably be less but could be high enough that you can't afford it. If you lose your transportation due to bad luck, it could snowball disasterously (lose job, etc.). So unless you can cover the occasional big loss, I still think the extended warranty is prudent.
But if you own several cars over your lifetime, like most of us do, then you are better off never getting one. Now my Prius is still under Toyota warranty, but let's say it isn't and I have a failure of some part that will run me $1,500. Now my dealer offered the extended warranty for $750 and one for $1,100 (could have teh numbers wrong, I barely paid attention), but others have posted getting it for I think $500. So you say, jeez Spike, if you had bought the extended warranty for $500, you would have saved $1,000. A thousand bucks is not chump change certainly. And on the surface, that would seem to make sense. And many people would never buy a car without the extended warranty again. But you miss a crucial fact, the Prius is not my first new car and I skipped the extended warranty on all of them. So, if, and it is a big if, I could have gotten the extended warranty on all of them for $500 each, on 6 cars that is $3,000. On none of the others did I ever have a repair that would have been covered by any extended warranty I ever loooked at. So in this scenario, I saved $1,500 overall by not spending $3,000 on an extended warranties over the years. Never mind the fact that some of those were bought pre-internet, so I would have paid more for the extended warranty. But more importantly, most people finance that extended warranty so you have paid 3-7 years worth of interest on that money. Cha-Ching Cha-Ching. You would have been far better off taking that extra money every month and putting it a savings account, earning minimal interest. You would then have the money, plus some extra to cover the rare repair & transportation if you are far from home. But most of us, do most of our driving close to home, so that cost shouldn't be a big concern. And if you are going to lose your job over car trouble, than your life is in really tough shape.
The reason extended warrantties are so popular with dealers, is the HUGE $$ they make off them.
OK, for the early adaptors the Prius was an unknown to a certain extent. So I will understand the first people wanting that coverage, heck I bought in 04 and I actually thought about it. But for most car purchases, with Honda or Toyota, there is simply no need for the extended coverage.
I tend to very conservative with my money, and am big on the "better safe than sorry" slogan, but extended warranty coverage is total and utter BUNK.

Spike
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