aftermarket extended warranties

I was mearly replying to each thread in which people thought I was opposed to capitalism or being so irresponsible as to not carry insurance, which to be honest, after re-reading my own reply I can see how they got that impression. I did a poor job of communicating my reasoning which brought on the negative replies and for that I apologize. In retrospect I could have replied to my own post and addressed all the complaints in one message rather than individually follow up on each one.

Roy did make me re-think my general policy to include when buying into new, unproven technology or manufacturing techniques an extended warranty may be a good idea.

No prob Ed, this is a good "on-topic" topic. First of all, we are talking about "service contracts", NOT extended warranties. There are NO such thing as extended warranties although many people (mistakenly) call them that.

One should never look upon a service contract as an investment, it is not nor was it ever intended to be an investment. Rather, it is protection from catastrophic loss much like an insurance policy, very similar to your medical insurance.

As a Service Manager, I see service contracts "pay-off" on a daily basis. Do the owner's recoup their entire "investment"? Many times not. In fact, in looking back at all my service contracts, I can say that they have been a net "loser" for me from an investment standpoint. Why, you ask, do I buy them then? I also see on a daily basis the excalating costs of automotive repair. I also see the increasing complexity of today's autos. In spite of the manufacturers best efforts and engineering expertise, when you add complexity to any mechanial contrivance you increase the potential for failure.

Also, I travel a lot towing a 30' RV. I have the peace of mind knowing that wherever I go in the US and Canada, if I have a mechanical breakdown I will have the repairs covered at no charge, plus the use of a rental car and if the repair involves a protracted visit, trip interruption protection vis a vis campground fees, motels and meals. Knowing that, I can budget for our trips knowing that there will be no surprises... at least automotive wise.

Finally, many folks live from paycheck to paycheck and do not budget for catastrophies. Those folks are the best customers IMHO for service contracts. Without the protection of a service contract, many of these folks would be dead in the water if faced with a one or two thousand dollar repair. They don't have the money, their credit cards are maxxed out and they are just plain screwed. If they had the prescience to buy a service contract at the time of sale, it would only add a couple of bucks to their monthly payment and if a catastrophy should befall them, they are covered.

So really, they are not an investment. They just spread the risk out so there are no surprises during the term of the contract. The peace of mind is priceless.

Mike