Extended Warranty on Tahoe

[MN Shutterbug]

Insurance companies know the odds and price their fees accordingly. I'm not a gambler because I know the odds are stacked against me, which is the same reason I don't buy insurance for something that won't send me into bankruptcy such as house insurance and health insurance, unless it's required by law. There are some people that buy extended warranties for electronics, appliances and practically anything that insurance is available for. From what I've read, on the average, extended warranties are always a bad deal. This is one reason many people are "insurance poor".

[Whoaru99]

Duplicate

[Whoaru99]

Apples to apples right? Well we are talking about a Tahoe which is going to carry more of a financial burden versus a Fiesta. More parts, higher risk, higher cost of parts. That is why when calculating costs there are certain classes of vehicles. Plus add in 4wd. $600 is way too light for a 36/36 and a 5/100 power train. WAY too light.

Del, "your" figuring or interpretation is way off.

Do you guys seriously think that only a very small percentage of newer vehicles under warranty go in for repairs and the rest of the vehicles showing up at these repair facilities are high mileage older cars? Come on, let's be honest with ourselfs here.

Read it and weep...

Even if some vehicles were three or four times the average the cost, it would still be less than $2500. Also, trucks and SUVs have been the best selling vehicles for these two so the low accrual rate isn't simply because they're selling all low priced, simple vehicles.

[delcecchi]

What is the graph? Total warranty expense? Warranty reserve?

My experience with new vehicles and that of my kids and friends is all that costly repairs to new vehicles are pretty rare.

I will try to find time to see what the consumer reports "frequency of repair" data shows, although I am sure there are better numbers out there that I don't have access to. Warranty Week? Who would have thought there was such a publication? Learn something every day.

[Whoaru99]

What is the graph? ... Warranty Week?

Accrual per vehicle, I believe. The accrual is basically an amount set aside from the sale of each unit to cover the anticipated/projected cost of warranty. All together the accruals go into the warrant reserve, from which the claim expenses are drawn.

Yeah, Warranty Week. I had a company subscription when I was doing warranty stuff...

[delcecchi]

Ok, so similar to the numbers I pulled out of Ford's annual report. Only broken down better. Thanks.

[DrJuice1980]

Does that graph reflect tow charges or rental reimbursement? I would imagine not and I would be willing to believe if an automotive giant is going to pull things like neglecting safety issues, fudging a few numbers on repairs to make a product look better isn't far fetched. Take off the blinders!

I've had vehicles with and without extended service plans. Weird thing is the ones I've had them on they have paid for themselves and the vehicles I haven't I've had zero repairs. The vehicles I have had repairs to were all in that 40-80k mile range and the vehicles I havent had an extended plan on the mileage has been higher and nothing beyond maintenance has been needed.

Its a gamble but it can go both ways, and when it gets bad it gets really bad. Im a believer and next time I buy a car out of warranty (I will never buy a brand new vehicle) I will add the extended plan because I'd like to budget and not deal with any unforeseen repairs that may cause a burden because vehicles DO break down. I'll buy a "program" vehicle and let somebody else take that big depreciation hit in the beginning and add in a service plan to cover the loss of warranty.

You guys are probably the same people that would flip at a service manager if at 36,500 you had a few electrica/computer issues that just ran out of coverage. Hypocrisy and this site go hand in hand.

[Whoaru99]

Does that graph reflect tow charges or rental reimbursement? I would imagine not and I would be willing to believe if an automotive giant is going to pull things like neglecting safety issues, fudging a few numbers on repairs to make a product look better isn't far fetched. Take off the blinders!

You guys are probably the same people that would flip at a service manager if at 36,500 you had a few electrica/computer issues that just ran out of coverage. Hypocrisy and this site go hand in hand.

I suggest gracefully bowing out at this point. Your assertions are growing increasingly inane.

[DrJuice1980]

Thats how it goes? One is wrong to have an opinion One is right to have an opinion as long as that ones opinion is backed by some graph thats most likely been doctored or left of relevant info? That graph obviously outweighs all the "under warranty" vehicles you see in the service lot because it was published, that means its legit. How you guys go and believe one thing and criticize the next is asinine. Instead of googling something drive through the next new car dealership you pass and count what looks like newer vehicles in the service lot, you will be surprised.

[rundrave]

Instead of googling something drive through the next new car dealership you pass and count what looks like newer vehicles in the service lot, you will be surprised.

If we are to count these vehicles how do you want us identify and count the ones there only for warranty work? How can I identify the warranty ones separately from the ones there for oil changes, recalls, alignments, new tires, scheduled maintenance, etc?

[MN Shutterbug]

It sounds like it's a good thing I buy older vehicles with over 60K miles on them. I get well into the 100K's and never have an expensive breakdown. Guess I'll stick with the well used vehicles.

I've also never purchased an extended warranty on anything and have saved a lot of money over the years. Also, once the value of my vehicle drops to under $5000 I drop all the insurance other than liability. However, a few months after I did that, my windshield cracked. It wasn't a big deal since they're generally not that high priced and since then I have saved more than enough on insurance to more than make up for that minor repair.

[MN Shutterbug]

Hypocrisy and this site go hand in hand.

Is that anyway for a moderator to talk on this site?

[Whoaru99]

Instead of googling something drive through the next new car dealership you pass and count what looks like newer vehicles in the service lot, you will be surprised.

I don't have to Google to understand it, only to grab a chart for an example. I DID this sort of work for nearly 10 years so I have direct, first hand knowledge of how it works as opposed to wild speculations and assertions.

[delcecchi]

Thats how it goes? One is wrong to have an opinion One is right to have an opinion as long as that ones opinion is backed by some graph thats most likely been doctored or left of relevant info? That graph obviously outweighs all the "under warranty" vehicles you see in the service lot because it was published, that means its legit. How you guys go and believe one thing and criticize the next is asinine. Instead of googling something drive through the next new car dealership you pass and count what looks like newer vehicles in the service lot, you will be surprised.

So you think a car company is going to fudge its financial statements, in order to what? have more profit to pay taxes on? Give them something to discuss with the IRS on sunday afternoon?

The numbers I posted came right out of Ford's annual report. And the other chart is comparable. What possible motivation would they have to lie about the allocation of revenue to the payment of warranty claims?

Remember you are entitled to your own opinion but you are not entitled to your own facts. Sheesh.

[titelines]

Thanks everyone - didn't mean to start a firestorm.

There have been great points made, a few of which I had not thought of. This gives me a lot to chew on and I really appreciate everyone's opinions.

Thanks again!