Extended Warranty?

[the 18th letter]

Assuming costs money. That is why I call it "instead". To buy any extended warranty at the same time as the BtoB warranty is a waste. You don't get that money back if not used or if you get rid of the vehicle before the BtoB runs out.

My factory warranty has already expired and I'm still researching so I never needed the info. In this instance my assumption was free, to me at least. But yeah, if your extended warranty doesnt EXTEND your warranty what does it do besides cost money

 

[DuraYuk]

My factory warranty has already expired and I'm still researching so I never needed the info. In this instance my assumption was free, to me at least. But yeah, if your extended warranty doesnt EXTEND your warranty what does it do besides cost money

Well it depends on what you buy.

My wife has a duramax yukon. Powertrain is 5 years 100,000 and bumper to bumper is 3 years 36000

We bought the GMPP platinum for 96 months or 100,000 miles for right at $3000.

Platinum is essentially a bumper to bumper so it 'extends' that by 5 years and 64,000 miles

It 'extends' the powertrain by 3 years but no mileage extension since diesels have a stout factory powertrain warranty.

I was a GM heavy line tech and can fix anything on this vehicle. Time and cost of parts is only thing I'm concerned with so I bought it.

And 'if' we keep this till end of warranty I promise I'll get over 3k back (seals and shocks alone will do that). If I don't keep it that long I'll get my prorated amount back.

So as a tech I bought it. I've seen first hand how much it can save people.

 

[jforb]

I guess as a tech you would not see the people who it didn't save money (those who bought the warranty, but did not need repairs under it)...and there are more of them, eh?

 

[DuraYuk]

I guess as a tech you would not see the people who it didn't save money...and there are more of them, eh?

No I wouldn't. But as a tech I can read and fully understand what GMPP actually covers. Many people had issues and faults but never fully utilize it.

The only way I may lose money is if I don't keep it full term (I usually dont) .

SEALS are the big thing. Assuming it makes it to 100k its incredibly rare for a seal not to be seaping or leaking on any gm product.

Now a seap you may never notice since it never leaves a trail. A leak that is getting on things but never hits the ground doesn't get noticed either.

A shock absorber that seems to be working but has oil residue on the outside will never be noticed by a customer.

But you know who does notice ? ME. One oil pan reseal. One rear main reseal. On transmission front pump seal. 4 shocks and alignment.

These are all things that will push you over and that's if everything on the inside runs flawlessly. And infotainment? Forget about it. Ac? Forget about it.

so as a gm tech i'm buying it. Although I wouldn't over pay for it which many do. I've also not seen a warranty as comprehensive as GMPP from other manufacturers before.

 

[OR VietVet]

I guess as a tech you would not see the people who it didn't save money (those who bought the warranty, but did not need repairs under it)...and there are more of them, eh?

The extended warranty/insurance companies are playing the percentages. Their whole business is ran by that. They keep more money than they spend. Yes, sometimes, as the policy holder you come out ahead but MOST times you do not. That is why I do not gamble. The percentages are never on my side. same with extended warranties.

 

[jforb]

Basically, you're betting against yourself. And the house always wins, in the end.

 

[WalleyeMikeIII]

Well, easy math…

I got a quote for 84 Month, 96k Mile service contract for $3189

Let’s say you put $3189 in a SoFi High Yield Savings account (currently 4.5% APY) for 5 years (length of the Powertrain Warranty). At the end of the 5 years you have $3931 in the account.

Now, will you have a $4000 bill at 5 year? I bet not, but let’s say at that point you have a $1600 bill for some repair that isn’t maintenance. So, get it fixed, you still have $2400 in the account.

12 more months at 4.5% interest and your slush fund is back up to $2510.

Now you have another $800 repair. So down to $1700

Go another 12 months…balance back up to $1778.

You are at year 7, of that 96 month service contract. Maybe you have another repair, maybe not…if not, let another year go by and you now have $1859 in the account at the time your service contract expires, and you funded $2400 in repairs.

Your call, but…the actuaries at the service contract companies are running the numbers…and taking in enough cash to cover all the claims, pay their employees a salary and benefits, pay for real estate, and return value to their shareholders…I guarantee this is more expensive to the consumer than self insuring yourself…on this one vehicle, you may get unlucky…but over a lifetime…self insurance is less expensive…it has to be this way…or the service contract (insurance) companies go out of business…

 

[Stbentoak]

The flaw in the above statement is that your potential for high dollar repairs goes up pretty exponentially after year 5. Stuff just stops working or starts falling apart, and many people just let these things go if they are too expensive or are not show stoppers since it's an "old" vehicle. The warranty gives you the assurance to approach an aging vehicle with confidence that you can keep it around for the full duration of how long you want to keep it and keep it in top operating order. I've had 2 warranties on previous expensive (Jaguar and Jeep) vehicles to fix vehicles and I have at least broken even on both......

 

[DuraYuk]

The flaw in the above statement is that your potential for high dollar repairs goes up pretty exponentially after year 5. Stuff just stops working or starts falling apart, and many people just let these things go if they are too expensive or are not show stoppers sine it's an "old" vehicle. The warranty gives you the assurance to approach an aging vehicle with confidence that you can keep it around for the full duration of how long you want to keep it and keep it in top operating order. I've had 2 warranties on previous expensive (Jaguar and Jeep) vehicles to fix vehicles and I have at least broken even on both......

That's exactly it. These warrantied cars will be 10/10 mechanically at the end of term. Most self insured or no warranty cars will not. Which again creates value.

You can literally say everything works. That includes the inside not just the powertrain.

The SOFI investment is cute. But the only known you have is the interest. Every other variable including cost of parts and cost of labor can change and in most cases more drastically then 5%.

What many don't realize is the bumper to bumper is 3 years 36k standard. I'm at 12k miles in 10 months. Look around. Won't take much If anything inside stops working to hit 3grand.

With all that said this really is a personal decision. Buy it. Don't buy it. It's your vehicle. Your life. Etc. What works for one person may not work for another.

 

[WalleyeMikeIII]

The SOFI investment is cute. But the only known you have is the interest. Every other variable including cost of parts and cost of labor can change and in most cases more drastically then 5%.

So, you think the average Joe is better at actuary science than the actuaries working at the service contract company?

My point, which seems to be being missed is this:
On the whole, the paid repair claims from service contract companies are less than the revenue those companies generate from selling the service contract…I has to be this way, or the business doesn’t work.

Extrapolate that to an individual purchasing a number of vehicles and service contracts over a period of time, and in the end the consumer will spend more than they receive in claims.

Net, it is always less expensive to self insure…