Are Extended Warranties Worth It?
May 23, 2008 – 3:16 pm by Matt Radel
Filed under Car Care
I ask you, VB faithful, for your 2 cents on the matter.
Over the past two months I’ve been peppered with offers to buy extended warranties for my car(s) from third parties. I’ve always given them a quick read over, given the fact that I’ve done about $3k worth of work to my Golf and my wife’s Jetta since November.
But usually the offers look and sound extremely shady. The most recent one was a shoddy print out on blue paper, where I couldn’t easily find a company name or price and the offer was only good for 72 hours within receipt of the notice. Naturally my red flag goes up any time I see one of these, but I always wonder - is there a company out there offering extended warranties that is reasonable and trustworthy?
What do you think, VB faithful? Has anyone had great luck or been taken to the cleaners by this? Let us know in the comments below.
Are Extended Warranties Worth It?
May 23, 2008 – 3:16 pm by Matt Radel
Thanks for throwing this question out buddy. I’ll be needing one of these as well when I buy out my GTI this fall. Hopefully I can find a good deal. Either that or pray that nothing big breaks down the moment I buy it, or later for that matter. Hahahah
Interesting. I’ve been debating the question, too, though I have a year left of full-maintenance to make a decision. Don’t have a dub anymore but as far as reliability issues I’m still in the same boat (Mini S convertible). At the very least, from what minimal research I’ve done so far, I’m thinking we need to go with reputable, time-tested warranty companies (I hear WarrantyDirect and NWC are good and are taken by major shops as long as they’re ASE certified). Major questions also that should be raised is what kind of coverage are you getting for the money you’re putting down? There are different levels (mechanical breakdown vs. wear and tear) and wear and tear will be the reason for most of the repairs though I’ve heard you want coverage for both. Also, the company’s financial rating, what your deductible is, whether it’s transferable to the next owner, and car rental/towing are all factors to consider when you get your quotes.
I’m thinking I will want to purchase one (pending the quotes/packages I get, of course) because it’ll definitely be worth the peace of mind.
I was overwhelmed with offers after I bought my GTI. I find the extended warranties aren’t cost effective; especially, since most people will finance them, making the cost even higher ($2000+interest.) The last one I bought was $2200, and I made one claim with it for $150.00. The next thing is that in recent years, a lot of the warranty companies have went bankrupt, leaving the warranty-holders with nothing. These weren’t just fly-by-night companies, some of these were in business for 30 years. The warranty that comes with VW’s lasts pretty long, anyway. In the end, I decided to create a savings account specifically for auto repairs, maintain a balance of about $2000, and gain interest on it while it’s not being used; for the record, it hasn’t been used yet.
Build up an emergency fund, you won’t need the warranty.