Taken recently from clarkhoward.com. Clark Howard is a well known consumer advocate who is based out of Atlanta.

Consumer Reports' annual auto issue is out and Clark is giddy with excitement. The April '08 issue definitively says that extended warranties aren't worth the investment. Clark has historically been neutral on extended warranties for vehicles, but now he'll have to revise his opinion. Only 20% of people ever recoup the cost of the warranty vs. the cost of repairs over the lifetime of a vehicle. If you're buying a Mercedes, you'll have the best chance (about 40%) in that regard. Other vehicles where a warranty may be a smart move include Pontiacs, Jeeps, Chryslers, Buicks and Dodges.

 

Can you always call and get the refund if you purchased the extended warranty? Do you call the dealer or the finance company?

 

As someone who passed on the 100K extended warrranty on the wife's 2001 Odyssey for $700, and then proceeded to "invest" over $1,200 in repairs by the time it reached 65k miles, I can tell you I'll never buy another car without the extended warranty.

It's insurance, pure and simple. If you drive your car more than 20K miles a year, and plan on holding onto to it for longer than five years, I can't see where it's a rip-off.

I got my Infiniti warranty for $1,300. If I keep the car my normal five years, that's only $260 per year. I drive about 22K miles per year on average. For what some of you guys spend on mods, I don't understand the issue.

Then again, I can't understand the people who try and justify putting regular gas in the car to save an extra $0.20 per gallon in a $45K car.

 

I'm pretty good with words, but I couldn't have said it better.

 

Bravo, that is well said sir! Besides, I can't really put a price on piece of mind....

 

I can't argue with your logic. I was just passing on CR's research stating that only 20% get their money back.

 

Ok it just basically comes down to how risk averse are you as an individual and your luck. You may get your money's worth or you may not, but thats why you buy insurance. Do you think your homeowners insurance is a waste of money, even if your house may never burn down, flood or be broken into in your lifetime? Anyways, I got it, but just like your car, you can negotiate. The plan I got was listed for 1800$ and I told him id pay $1000 and that was the price I got it for.

 

I'm not sure what warranty I have but I know the warranty is longer than my lease so I'm completed covered.

 

I have bought 9 vehicles in my lifetime and put over 100k miles in each and everyone of them never bought the extended warr. The way I look at it is if you are going to get a lemon you're or somthing goes wrong with the car it's going to be before the 3-36 or 5-60 warranty is up. IMHO it's just a way to make easy money.......... not worth it IMO.

 

Quote: "waste of money."

But, I have wasted money on many many things in my lifetime. So why not make it the extended lease?

I don't mean to say that everyone should get it, just that if you have an extra $1500 bucks to spend in a 4 year span of the vehicles "baby years" then why not splurge on an extended warranty?

 

As CR points out that only 20% of extended warranty buyers come out "ahead", it's clearly a big $ maker for dealers/manufacturers. In the case of generally reliable brands, the % of extended warranty buyers coming out "ahead" is even less. CR also pointed out in some cases, the markup for the dealer/salesman was 50%, that's huge. That'd be like paying 50% over invoice on a car.

 

I see what you are saying, but at the risk of beating a dead horse, I wouldnt compare homeowners insurance to an extended warranty.

 

Dont get it.

 

I got it because of all the electronic and the fact that the extended warranty will cover operator related issue as well as manufacture defect. For $25 more a month, I'd rather be safe than sorry.

 

I got it. From past experiences with high end cars (MB and Porsches), the extended factory warranty greatly help to privately sell the car down the road. I would not get a third party extended warranty, thou. For me the factory extended warranties have been good investments.

Richard