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Chrysler Powertrain warranty and other Svc contracts

New Chrysler & Dodge (Jeep too) vehicles now include a powertrain warranty (with a deductible). Previously the factory service contracts were available in three flavors: powertrain, added care, and max care. Since new cars include the powertrain coverage as a standard item, added care and max care only are available as extra optional coverage.

The max care and added care previously included the powertrain coverage. Since powertrain is now standard, you'd expect that the cost of max care and added care service contracts to fall, since they no longer need to cover the powertrain items.

But instead, added care and max care service contract prices (at the wholesale level) have increased quite a bit. Was this due to increased claims or did they just hope customers wouldn't notice they are getting less coverage with the optional packages?

Reply to
Greg Johnson
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I think it is because competitive pressures didn't allow them to increase the vehicle price to cover the increased claims that they are going to be paying out as a result of increasing the powertrain warranty. So they are obviously hoping that by raising the service contracts on the other items that they will make up the additional money to cover the increased powertrain claims. This is actually a benefit to people who don't normally buy the added care and max care warranties.

Warranties of this length are basically insurance, and like all insurance your gambling against the insurer, and the insurer is gambling against you. Like most gambling the odds are stacked in favor of the house, in this case the manufacturer. So if you choose to play the game, you can hardly complain that your not getting a good deal. The odds are deliberately set that you won't, most of the time.

Ted

Reply to
Ted Mittelstaedt

With the cost of repairs these days it is easy to come out better with the agreement. Power window failures on the 300M can easily cost a grand and are still common. Plus the car is easier to sell if you have a transferable bumper to bumper warranty.

insurance

against

Reply to
Art Begun

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