As a request from the Web Guy, tonight I am going to weigh my two cents about extended warranties.  I can't tell you how many times I have been asked about these things and whether or not they are worth buying.  My typical answer is this: We buy car insurance in case something happens; sometimes you use it and most times you don't.  Let me follow by saying, I personally do not have an extended warranty on either my Honda or Acura.  Granted, I am the Car Guy and I don't mind taking a chance on finding someone I know in the industry to help me out should something go wrong, but that doesn't mean I would totally rule extended warranties out entirely.

 

Here are some thoughts: 1. extended warranties yield a ridiculous profit margin for anyone selling them to you.  My understanding is that a car dealership, who is selling you an extended warranty for $1,200, probably paid somewhere around $250 for it.  Thats huge!  2. People usually buy extended warranties when they purchase their car because they feel like they are already spending too much money, so what's an extra grand going to do.  3. Extended warranties are negotiable whether you are buying it upfront with the vehicle or later down the road; dealerships or manufacturers want to sell them to you and you should negotiate hard for them.  4. I believe in extended warranties, and there are plenty of Cinderella stories out there about how a car reaches 5k miles out of warranty and the transmission goes out; luckily for the extended warranty, there is no cost incurred by the consumer.

 

To sum this random rant about service repair insurance otherwise known as extended warranties, I want to say that its a good idea to purchase them, especially if you are buying a domestic vehicle from a manufacturer who has a long history of recalls, oil leaks, transmission problems, differential problems, electrical problems, etc.  And you know who you are, Mr. Bankrupt Detroit manufacturer whose name I won't mention.  Let me just say this, if my mother was buying a Lexus, I would tell her not to buy a warranty.  If she was buying a Jeep Cherokee, I would be asking how many different options of warranties she could buy.

 

The End.