Extended warranties

[Joecooool]

My warranty expires a few days ago and I am interested in getting an extended warranty. I called the local Lotus dealer and their "gold" warranty is $1200 for 3 years 36,000 miles. That covers most stuff, their "platinum" warranty for the same time is $1500 and that covers everything except for normal wear items.

All warranties include the power train. Since the power train is sure to outlast the rest of the car, I asked if there was a less expensive warranty that excluded the power train and just covered the stuff Lotus made. No such luck.

I'm thinking it would be worth it for two reasons. First, obviously the issue about being covered if something gets fubar'ed. Second, I think people would be willing to pay more for a car with an extended warranty if I decide to sell it in a few years. I know if I were looking at two identical cars and one had a warranty, I'd be willing to pay more for it.

What do you guys think?

[wallabyguy]

Yes, a warranty on a pre-owned car, especially like a Lotus, will help to sell your car later on and at a higher price point. It adds security for the buyer.

Most buyers are concerned about the powertrain because it is the highest cost part of the vehicle to repair. Thus all extended warranties use this as the foundation of their offerings.

[Abe]

It's been a while since I've been on that side of the fence for Lotus but, I thought you can only get extended warranty on a Lotus when:

A. Time of purchase (new) or
B. 1000 miles before the warranty expired?

Back then, JM&A were the only ones touching Lotus for extended warranty; has that changed?

Like I said before, it's been a while since I did all that but that used to be the case in CA at least so I may be wrong, thanks.



Abe

[AgentTripleX]

I bought the extended warranty (7 years/70k miles) and kind of regret it now. I haven't used it and I'm almost 5 years into the ownership of the car. I doubt I'll ever use it, but I bought it as a safety just in case. I should have looked at my service history and seen that nothing major has gone wrong. My best friend is always having warranty issues with her Elise so I recommended the extended warranty for her though.

As for resale, I don't think it makes a huge difference. I used to sell exotic cars and a car with an extended warranty was not a deal maker or breaker. People are more interested in seeing service records.

[cemaykan]

My warranty has expired last year, so no chance for me to get extended at this point? Grr...

[wallabyguy]

Originally Posted by Abe

It's been a while since I've been on that side of the fence for Lotus but, I thought you can only get extended warranty on a Lotus when:

A. Time of purchase (new) or
B. 1000 miles before the warranty expired?

Back then, JM&A were the only ones touching Lotus for extended warranty; has that changed?

Like I said before, it's been a while since I did all that but that used to be the case in CA at least so I may be wrong, thanks.



Abe

JM&A changed their plans as it applies to Lotus (as I understand it as it occurred after I left HRM). There are now various levels available for Lotuses and it is based of the mileage when the warranty is sold. It is done electronically through JM&A. The warranty now reflects most policies available for other makes.

[Moto44]

Originally Posted by AgentTripleX

As for resale, I don't think it makes a huge difference.

I suspect that it might make more of a difference when an individual is selling the car versus a dealer.

[xxxotic]

I work for a credit union and we sell extended warranties on cars at about 1/3less than what the dealer charges.

I checked to see how much it would be on my car, but was told we dont issue policies on Lotus or other exotics

[Joecooool]

Originally Posted by cemaykan

My warranty has expired last year, so no chance for me to get extended at this point? Grr...

Sure, the dealer just has to inspect the car first.

[Lotusmotion]

Why?

I will likely stand out as the peckerhead in this thread, but here goes anyway:

An extended warranty program is a for-profit endeavor on part of the issuing party. There are tons of exclusions, such as wear and tear parts and abuse, to name a couple.

Odds are not in your favor that you will collect more from the policy than you spend on it.

The car has a Toyota powertrain...doesn't get any more reliable than that.

I understand that many people perceive value in extended warranties, but I just don't get it (actually, I do...).

[Nikki]

Extended warranties sold by third parties are risky. If the third party goes out of business or files for bankruptcy, your warranty is worthless. I think they are a waste of money because cars have become much like computers, in that, anything that goes wrong due to defective parts and/or manufacturing is likely to occur within the normal warranty period. After that, most problems are due to wear and tear or other items not covered under warranty. If you absolutely want an extended warranty, I suggest nothing other than one offered by the factory. Even then, beware of factory extended warranties offered through "third parties."

[Randy Chase]

Originally Posted by Lotusmotion

Why?

I will likely stand out as the peckerhead in this thread, but here goes anyway:

An extended warranty program is a for-profit endeavor on part of the issuing party. There are tons of exclusions, such as wear and tear parts and abuse, to name a couple.

Odds are not in your favor that you will collect more from the policy than you spend on it.

The car has a Toyota powertrain...doesn't get any more reliable than that.

I understand that many people perceive value in extended warranties, but I just don't get it (actually, I do...).

100% agree. They are betting you will cost them less than you pay them. The only way it might make sense if you think it will cost you more than your premiums.

IMO... this is a kind of insurance and it makes sense when you can't afford the potential liability. Most of us should be able to afford the service on the car. And if you can't, then set aside the cost of the extended warranty and there you go... now you can.

The other downside of the extended warranty is less flexibility should you need to use it.

[wallabyguy]

Originally Posted by Joecooool

Sure, the dealer just has to inspect the car first.

Unless JM&A changed their policy, this isn't the case. JM&A required the car to be within the basic coverage in order to be eligible for the extend contract (at least when I was at HRM).

[cemaykan]

>>They are betting you will cost them less than you pay them.

I am sorry but I don't agree, thats how your auto insurance works as-well. Yes in average you cost less to them, but you might be the unlucky one, hit the jackpot and require a new transmission for instance.

Same exact thing happened with my C5 couldn't go into 3rd gear but i was lucky enough to have the extended warranty which took care of it...

But then there was a bunch of other unreliable corvette things I had to pay out of pocket, but at the end of the day I was up...

Oh btw, they bitch, wine, and try to do all sorts of tricks to deny major claims...so it comes with a headache...

[cemaykan]

OH, btw the aston martin & lotus of new england (the dealer in MA) does not sell, or deal with JM&A anymore because apparently they bitched alot... I was told when I was picking up my elise 6 months ago.

[JohnnyQuik]

As others have mentioned, the companies offering extended warranties make money of the difference between the premiums they collect and the claims they pay. Therefore, as a whole it's a bad deal for their customers. They seek to maximize premiums and to minimize claims paid, so they'll likely find any reason they can not to pay you. Read the fine print. That being said, you might be the lucky one who saves money on a major repair. What warranties and service contracts allow you to do is budget the amount of money you spend on repair costs thus avoiding a catastrophic loss. Obviously, a transferrable warranty adds some of the cost of the warranty to the value of the car if you sell during the warranty period.

[Randy Chase]

Originally Posted by cemaykan

>>They are betting you will cost them less than you pay them.

I am sorry but I don't agree, thats how your auto insurance works as-well. Yes in average you cost less to them, but you might be the unlucky one, hit the jackpot and require a new transmission for instance.
.

I think you are still agreeing. They work on averages. That was my point.

And I said, if for some reason, you buck the averages, then it might be a good deal for you. But my point is still 100% valid. This is how they make money. Just like a casino. You can tell me how you went into Vegas and walked away with money, but I am saying the casinos bank that on average, they take in more than they pay out. It is just math.

[Joecooool]

Originally Posted by wallabyguy

Unless JM&A changed their policy, this isn't the case. JM&A required the car to be within the basic coverage in order to be eligible for the extend contract (at least when I was at HRM).

Lotus of Jacksonville told me they had several companies they work with. They could put an extended warranty on just about any car provided it passed an inspection before hand.

[Joecooool]

Originally Posted by Randy Chase

I think you are still agreeing. They work on averages. That was my point.

And I said, if for some reason, you buck the averages, then it might be a good deal for you. But my point is still 100% valid. This is how they make money. Just like a casino. You can tell me how you went into Vegas and walked away with money, but I am saying the casinos bank that on average, they take in more than they pay out. It is just math.

So which is the bigger gamble, buying an extended warranty and risking the money you spent on it or not buying the extended warranty and being liable for any significant repairs?

[Randy Chase]

Originally Posted by Joecooool

So which is the bigger gamble, buying an extended warranty and risking the money you spent on it or not buying the extended warranty and being liable for any significant repairs?

That is the question right? The company selling you the insurance is betting they win. If you are paying for it, you must be betting you will win.

But again... in the law of averages, it can't be too far apart unless you knowingly bought a car you know is going to have a lot of expensive repairs. And if it is close to a wash, I would rather have the flexibility and not the hassle of trying to convince some 3rd party company that my repair is valid.

Everyone can feel free to do what they want. But no matter what, the company selling you the policy is doing it to make money.