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
Is the reliability, of this Mercedes such that you could expect to
recover the over 4000,00 additional warranty coverages in 100,000 miles
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.
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
No... not a dealer or mechanic or salesman. I am just a guy who loves MB and
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
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.
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
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%
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.
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....
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.
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
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