Friday, March 23, 2012

Extended Warranty's Are They Worth The Money????

After years of paying for extended warranty's I have come to the realization that I was just wasting my hard earned money.  Most electronics usually last beyond the warranty period and it is just not cost effective - especially on items such as CD players, DVD players, etc.  They offer these warranty's on most products now.

One big expense I learned to avoid through experience is the extended vehicle warranty offered by most car dealers.  I paid $1900.00 for my last new car extended warranty, which turned out to be a bust - I feel I was ripped off by the dealer.  My car was only serviced at the dealer I purchased it from, I brought it in for all the recommended service intervals.  Out of the blue my "check engine" light came on ( I had approximately 28,000 miles on the car at the time ).  I brought it to the dealer who sat on it for almost a week and the end result was that the transmission was causing the light to be on and that it needed to be rebuilt.  I had the warranty coverage up to 75,000 miles.  When I spoke with the dealer-they told me the cost would be around $2,400.00 - I told them no problem as I did have the warranty coverage.

There was a problem though - a BIG problem. I was told that the transmission fluid was supposed to be changed at 24,000 miles and since I did not follow the warranty terms - it wasn't covered.  Even though I had the dealership take care of all the required maintenance on the car, they would not accept any blame or even compromise on the total cost of the bill.  The strange thing was that we did not seem to have any issues with the automatic transmission shifting at all, it seemed to be working just fine.

I declined paying that amount of money for the repair - which I am glad I did!! They told me that they could flush the transmission a couple of times and that should help a little.  The bill for checking out the transmission and the two flushes was over $700.00.   After this whole fiasco- I never brought the car back to the dealership for any maintenance.  The car's transmission lasted to about 178,000 miles - I had it replaced with the engine which seized on me.  At that time it was still shifting properly, but I got a good deal on an engine and transmission with low miles.  This great little car is still going strong today - I drive for a living and put on many miles daily.  In the end I learned a lesson here - if you get an extended warranty be sure the dealer is performing ALL maintenance as required by the manufacturer!! Don't just leave it in their hands or you may be sorry!!

Another vehicle warranty nightmare story:

I have friends who purchased a used Minivan with under 30,000 miles on it.  They had purchased an extended warranty as the dealer only offered a 30 day warranty.  This extra coverage was purchased through the dealership when they bought the van. The coverage was for the drive train only.

As fate would have it - the transmission on the van started acting up not long after the 30 day warranty expired.  They had it towed to the dealership they purchased it from.  The dealer took apart the transmission and contacted the appropriate party for the warranty coverage.  They in turn sent someone to inspect the transmission and determined that the problem was due to a pre-existing condition and they would not cover the repair.  The dealership told them the total cost of rebuilding the transmission would be around $3,200.00 - they were shell shocked!!!  They decided that they would take the car somewhere else and put in a used transmission instead.  The dealer told them fine, but the cost to diagnose the problem and to put it back together was a little over $1800.00 - this dealership really had them just where they wanted them.  It ended up costing them the $3,200.00 to rebuild it!!

There is a BIG lesson to be learned here when deciding to purchase an extended warranty - you have to read and understand all the fine print.  It may not be in your best interest!!

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