Extended warranties

We have a new Mercedes SLK. They are attempting to sell us some warranties for paint, tires and wheels, and an extension of the power train warranty.
They cite a cost of over 5,000.00 if the convertible hard top should malfunction. Is the reliability, of this Mercedes such that you could expect to recover the over 4000,00 additional warranty coverages in 100,000 miles of use???
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I am assuming you bought a new car... not used. If you usually keep car longer than the factory standard warranty period, it is always worth the extra money for extended warranty.
However, if you have Geico insurance, they have their own program for new car purchase... they will offer you extended warranty for your new car... much cheaper than factory warranty and I think is better coverage. Compare the warranty coverage if applicable.
I would recommends buying extended warranty but be sure the coverage is everything... In MB world, repairs can cost thousand or two in one shot... First 4 years will cost you nohting and not much to repair, but in event something went wrong, you are covered with extended warranty... and that is worth it. Just think of you are prepaying 3 major repair bill to cover everything on your car.
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I am also assuming you bought the car from MB dealer and the extended warranty is MB not third party.
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wrote:

Are you saying one should plan on paying for 3 major repairs in the first 4 years of the life of an MB? And by the way, if that doesn't happen, buy the extended warranty so you don't miss the chance to pay for them anyway?
You must make your living servicing MB's. Or selling extended warranties!
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No... not a dealer or mechanic or salesman. I am just a guy who loves MB and handy.
In the first 4 years, you will see some major work but covered by MB and you can calculate the cost of the service. Even Service A and B is costly. Some of you may lucked out and have nothing to fix.
The problem with extended warranty by MB is that they want you to buy it within the first month of ownership... you cannot buy it at the end of 4 years.
Third party extended warranty are not trustworthy. Geico is an exception but you need to stay with them from the beginning of purchase. My bro has it and works out very nicely even with deductible.
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I had the GEICO extended warranty on two of my previously owned vehicles. There is about a $300.00 deductible the cost was about $40.00 every six months increasing each year slightly. You must be a policy holder at all time. GEICO send a representative out to verify and approve all repairs. The first MB used it to repair the air conditioner that was initially only approved for part of the request from the dealer. MB dealer would not make the repair unless comply with factory recommendations. GEICO authorize. The second time oil leak. GEICO leak within tolerance no repair authorize. The second vehicle not used. Free glass repair with their extended warranty.
GEICO seems to be the best among the third party carriers.
MB has almost double the price of their extended warranty and it must be purchased within the first thirty days of ownership or there is a 15% surcharge.

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The car business these days is ultra competitive and dealers really don't make all that much on the sale of cars.
But once you've agreed to buy a car at a specific price the dealer has a couple of other opportunities to bump up their profit on the sale of the car. One is that if you decide to finance through the dealer using MBNA or some other lender the dealer will bet back a percentage of the interest to add to their income. This interest over-ride isn't delayed 'til the completion of the contract. It's paid up front. Another is to sell the buyer on the importance of buying an extended warranty from them. The dealership can make tons of money on this stuff. And it can transform a sale with relatively little profit into a home run.
When I bought my new M-B recently I also was brought into the "finance guy's" office & I knew to brace myself for a salespitch for extended warranties because I'd already told the sales guy that I didn't need financing, I was just going to write them a check for the entire balance.
Sure enough this other guy assaulted me verbally on several points including the warranties on the car and on a Lifetime Tire Guarantee or some such thing and suggested that certainly I'd also want them to do a special paint treatment to "protect" my investment. I think that was "only going to cost me" something like eight hundred bucks!
After a determined 15 minutes wherein I must have repeated the word "No" a hundred times I finally was allowed to write my check for the purchase price of the car ONLY. But they didn't like it.
If you think about it, these high cost insurance schemes are really nothing more than asking you to pay for a failure up front --- when you buy the car --- rather than waiting four or five years or 6 years or however long it takes something to shoot craps.
Personally I'd prefer to hang on to my money 'til the failure actually occurs - if it occurs. Then I'll pay.
--
Pat Durkin



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in the second paragraph where it says "the dealer will bet back"
...that should have been "the dealer will get back"...etc.
Sorry for the typo.
--
Pat Durkin



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Excellent points Paddy.
Extra stuff like lifetime tire? Gemme a break...
Paint Sealant that cost $800? Can be done for $30 from Griot's garage.
Just the extended warranty is your choice. Personally, I'd rather bet on it than to lose it to price increase, etc....
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It's actually worse than just paying for the failure up front. It's paying for a possible failure, that might be covered, and then factoring in hefty profit margins and overhead on the the warranty business. Which is why I haven't bought an extended warranty in 20 years, until recently. I bought a Kitchenaid double oven on Ebay that was supposed to be a store display model, but were perfect and brand new. They listed for $3100, sold at big box stores for $2800 and I got them for $1300. It was stated that they did not come with a warranty. SquareTrade offered a 3 year plan for in home service, including that if they can't fix it in 5 days you get a new oven. The cost was $67, so in this particular case it seemed worthwhile, especially since these and similar ovens seem to have some common failures that can be expensive.
These warranties are really an insurance plan. In the case of insurance in general, if you can self insure, you're better off in the long run. And in the case of $4000 for a plan covering a limited timeframe and miles, I'm not sure it makes much sense. If you do this on 5 cars, that's $20K out of your pocket for sure, vs taking the risk on yourself.
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In general, I agree with what you said about warranties not being a good deal but there are certain cases where they do pay off. For the past ten years, this has often been true with Mercedes due to their rather common failure problems and high repair prices. You have to do the math, review the terms very carefully, and it depends on each person's circumstances ,but it can be worth it. In my case, I initially bought the car for a female that 1) didn't know anything about cars and would believe anything the dealer told her, and 2) would always go to the dealer. I didn't want to worry about her getting ripped off each time she went into the dealership. I paid $1800ish to get the premium/more inclusive warranty extension out to 8 years from Mercedes itself. It paid for itself the first time she went in for repairs in year 5 (first time it was out of base factory warranty). It then paid for itself multiple times over the next 4 years. Sure, the repairs were done at stealership prices but even if you compute the return using the price rate from the independent service guy, it would have still paid for itself multiple times. There are some people who will not use indies though (or work on them like many of us here do!) so they might as well protect themselves. When I started driving the car during the last two years of the warranty, I got enough work done at the stealership to pay for the warranty.
My $.02.

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