Auto Warranty Companies...

Is that a case of you are buying a used car from a dealer and the dealer wants to take you into the back room and sell you a bunch of extras?

I used to sell these. One of two things happens:

1. The company is flooded with claims and goes down the tubes

Or

1. Your money ends up in the Cayman Iskands in a numbered bank account.

I don't know of any legitimate ones. I would assume the coverage offered by GE and a couple of other big multinationals are OK. They won't be going out of business soon. But read the fine print as to what's covered and what's not.

Also, check with the manufacturer and see what's available. Toyota has a very good warranty program. You can shop on-line and save LOTS of $$$ on Toyota warrantied. I assume Nissan, Mazda, et al all have similar programs.

What kind of car, and how many miles? Toyota only lets you buy an extended warranty if the car is still under the factory warranty, or only for a few months after...

My Humble Opinion: If the warranty doesn't come from the manufacturer of the vehicle don't waste your money because they won't be there for you when you need them. Either they go out of business or they have disclaimers that get them out of everything unless it happens on the fifth Tuesday of a month with two full moons.

Steve B.

Anyone have any experience/input on warranty companies. Good ones, not so good ones. There's a bunch of them around. _____________________________________________________

A warranty is just a specialized insurance policy. The premium is always far more than the expected cost of repairs for any claims, similar to those bread-and-butter extended warranties for appliances and electronic products. The premium money goes to pay for the insurance company's salesman, the insurance company's executive salaries, the insurance company's headquarters buikding, the insurance company's stockholders, and finally the insurance company's customer claims.

Even worse, if you take care of your car, your premium money is subsidizing irresponsible other persons who abuse theirs.

Read the policy's fine print very carefully. You may conclude that the risk of having a breakdown, and the risk of not being compensated if you do, are too much risk for your money.

Good luck.

Rodan.

I had warrantydirect and didn't have any problems with them. That was several years ago and assuming they are still in business I would recommend them.

As to people saying you shouldn't buy them, that depends on how much you pay and how much it's worth it to you not to have to worry about any repairs out of pocket. I've had extended warranties on three vehicles and overall have gotten back about 80% of what the premiums cost me. You have to expect that in the long term you will not get your money back unless you get "lucky", and that would be a reverse kind of luck.

I know people who buy a Toyota and pay many thousands more for them then the equivalent Ford would cost them. Why? Because they expect to save a few hundred on repair bills. Nobody calls people stupid for buying $3000 "piece of mind" higher cost Toyotas but if they save $3000 on a Ford and then spend $1000 on a warranty they are "stupid".

Think this is the one:

it is best to say no to the extras they offer you in the closing room. The extras basically just add extra profit for the car salesman. Say no to undercoating, protective coating on the upholstery, the extra warranty, the life insurance, the service agreements and also do not finance through you dealer (go to the bank).

I've been shocked at how many intelligent people get talked into those things. I've heard that there is more profit made in the closing room on this crap then they make on most of the car sales themselves.

Think about the financial aspects of a used car warranty for a moment. In a sense it is a bet. You are pre-paying some amount of expenses ahead of time with the expectation that your actual repairs will equal or exceed that amount over the life of the warranty. On the other hand the warranty company is hoping that your repairs will be signifantly less than what you pay in an upfront premium.

The warranty company has quite a bit of experience in pricing warranties and they will likely make at least enough money to stay in business.

I dunno. I buy a car, and I expect to have it a long, long time. I expect the maintenance and repair costs of the car to exceed the initial purchase cost of the car over a couple decades.

--scott