extended warranty: how to negotiate price down

Most extended warranties have 50% profit built in. It's like any insurance. There is a risk/benefit calculation you must make for yourself. I'd suggest an alternative might be to use the funds for the ex warr and start a 'car fund'. Open an account, put that money in - try to add $20 regularly, if you keep the car after its paid off - continue making car payments to yourself in that account. When you need to make a major repair, or trade into another new car, there will be some funds there to help.

2 things to be aware of. Usually best to avoid 3rd party warranties. But you seem to know that. Also, some folks have founde better pricing through on-line dealers such as and others.

And if you live in the South especially, confirm the warranty will cover the A/C system. In the past, many warranties were not very inclusive.

Carl

Dittos. I never buy these warranties. Subaru is always pestering me with offers. Figure the more they pester, the higher the profit ;)

Frank

If you make purchase of the car contingent on it you should be able to get it for $100 over dealer cost. They are sold through parts departments (like floor mats or trailer hitches) and the dealer has little overhead in the warranty, just needs to complete the paperwork and submit it. The problem is determining the dealer cost. There are some dealer parts departments that sell the warranties online but they are becoming fewer. I imagine this is because of pressure from Subaru NA and other dealers. Also as another poster pointed out only go for manufacturer's warranty not any 3d party one. The usefulness of the warranty for a Subaru I can't comment on. With two Ford products I purchased the warrantees paid for themselves between year 3 and 5 of ownership. Also be aware that the warranty is 7 years from day of purchase not from when basic warranty expires. Good luck

Why not toss $10 a fill-up into a money market account during the manufacturer's warranty period?

If you need an expensive repair, you'll have the money. If not, you get to keep it! Statistically, you'll have a few thousand bucks when you replace the car.

Places like Vanguard will let you open the account with as little as $50, with a monthly deposit plan.

Extended warranties are simply expensive, specialized insurance, with lots of built-in profit for the seller, and lots of hassle for you.

That is generally true.

However, if OP is financing the car, there may be another consideration: the lender may offer a discount if you buy extended warranty. When I bough my OBW, the cost of extended warranty came to $0 over the life of the loan (IIRC), once the discount was factored in.

Cheers,

Very interesting!

Who was the lender?

Wells-Fargo Auto Finance.

I suppose it's possible that the "Finance Guy" at the dealership was pulling my leg, and that I could have somehow gotten the discounted rate even without the extended warranty. But the terms (before discount) were better than what my bank offered, so I didn't have much space for negotiation (are the loan terms negotiable at all, when you are about to sign the loan docs at the dealer?)

Cheers,

Maybe, maybe not.

Either way, it sounds like you did good. It also sounds like a seriously creative F&I guy.

Dont'. If you'd like one, buy it later. Any subaru dealer can sell them, and some dealers sorta specialize in them and discount them heavily versus other dealers.

Some dealers don't negotiate on these, and most don't get anywhere close to the dealers who do.

Search the archives at groups.google.com on my posts on extended warranties for soem of the dealerships that discount these heavily, the two types of warranties that are sold, and the various deductible levels available.

For what it's worth all my car's problems sadly started just 7k miles after the 100k/0ded exclusionary policy expired, so mine didn't end up saving me money. YMMV, though. I'm sure as heck glad I didn't spend a ton on that warranty though.

Best Regards,

-- Todd H.

2001 Legacy Outback Wagon, 2.5L H-4 Chicago, Illinois USA

I would skip the warranty. In any case you almost certainly have until the expiration of the mfr warranty to decide on whether to purchase an extended one, so you have 3 years to decide. Ask the sales at the dealership -- they should tell the truth to a direct "yes" or "no" question.

If you do decide to buy one: third party ext warranties are generally a bad idea, with possible exception of AAA (which I heard are better: good coverage, valid in any of the shops on their "recommended" list, which are plentiful, and do not require submitting claims).

Disclaimer: I have never owned an extended warranty.

One more possibly interesting product. In the past, Geico offered a 3rd party waranty that had a mileage limit but unlimited time. If it took you 15 years to get to 100K (or whatever) you were covered the entire time. All the other comments still apply - that is, the Geico product is likely designed to bring in a lot of profit for them. (plus, availability varied by State IIRC)

fyi

Carl