Calgarypuck Forums - The Unofficial Calgary Flames Fan Community - View Single Post - Refundable Extended Used Car Warranties

pylon · 01-25-2013, 02:16 PM

I am pretty busy today, but I will drop some semi-pro advice.

If it is a manufacturers endorsed warranty, I would have no issues with it.

If it is a third party plan, I would do my homework on the provider, there are some pretty sketchy plans on the market. Instead of telling you who is bad, I will tell you who you can trust IMHO. First Canadian, and Secure Drive are the two I would certainly recommend. Secure drive especially because they are actually the administrator for a lot of manufacturers program. But always, ask for the manufacturers backed plan first and foremost, even if it costs more. If you have a dispute, you can go right to the manufacturer for assistance. That option does not exist with 3rd party.

As far as refund on warranties (Claims free reward in the industry term), I tell my customers not to use that as a motivating factor in making their decision. Because yes, you could make more money of you simply invested the funds over a long term because you are only getting a portion of it back. You buy an extended warranty is you are unsure if you can fork over 8 grand for an engine. It is a nice bonus, but that is all it is, a bonus. The attrition rate is about 95% meaning most people either sell the car, trade the car, or make a claim. If any of the three happen before the term is up, you forfeit the refund. And it is term, not miles the refund is determined by. So even if you burn through your allowable km's a year early, you still need to wait out the term and still own the car to get the refund.

The majority of the warranties we sell are to people with lower income, and they blend it into their financing because $40/mth is better than $4000 in one hit. Wealthy people, more or less just self insure.

In conclusion, I have never seen a horror story when someone has bought a warranty. I have seen 20,000 engine replacements done on TDI Touaregs. I also had a BMW M3 get basically an entire power train with a third party supplier when a clutch detonated and ended up blowing the engine. He just has to weigh out if he wants to pay now, or pay later, and take the risk of paying way more later.

The last thing to bear in mind, extended plans have a huge value if you sell the car used. They are not transferable if you trade it, so they have little value to a dealer, but on the private market, the rule of thumb is each year of coverage, is worth +/- $1200.

Hope this helps.

So without knowing your buddies exact financial situation / motivating factors / make model year of car, I would have to make my vote:

Unless of course he is dealing with our dealership... then he should buy the warranty.

01-25-2013, 02:16 PM	#14
pylon Lifetime Suspension Join Date: Jul 2007 Exp:	I am pretty busy today, but I will drop some semi-pro advice. If it is a manufacturers endorsed warranty, I would have no issues with it. If it is a third party plan, I would do my homework on the provider, there are some pretty sketchy plans on the market. Instead of telling you who is bad, I will tell you who you can trust IMHO. First Canadian, and Secure Drive are the two I would certainly recommend. Secure drive especially because they are actually the administrator for a lot of manufacturers program. But always, ask for the manufacturers backed plan first and foremost, even if it costs more. If you have a dispute, you can go right to the manufacturer for assistance. That option does not exist with 3rd party. As far as refund on warranties (Claims free reward in the industry term), I tell my customers not to use that as a motivating factor in making their decision. Because yes, you could make more money of you simply invested the funds over a long term because you are only getting a portion of it back. You buy an extended warranty is you are unsure if you can fork over 8 grand for an engine. It is a nice bonus, but that is all it is, a bonus. The attrition rate is about 95% meaning most people either sell the car, trade the car, or make a claim. If any of the three happen before the term is up, you forfeit the refund. And it is term, not miles the refund is determined by. So even if you burn through your allowable km's a year early, you still need to wait out the term and still own the car to get the refund. The majority of the warranties we sell are to people with lower income, and they blend it into their financing because $40/mth is better than $4000 in one hit. Wealthy people, more or less just self insure. In conclusion, I have never seen a horror story when someone has bought a warranty. I have seen 20,000 engine replacements done on TDI Touaregs. I also had a BMW M3 get basically an entire power train with a third party supplier when a clutch detonated and ended up blowing the engine. He just has to weigh out if he wants to pay now, or pay later, and take the risk of paying way more later. The last thing to bear in mind, extended plans have a huge value if you sell the car used. They are not transferable if you trade it, so they have little value to a dealer, but on the private market, the rule of thumb is each year of coverage, is worth +/- $1200. Hope this helps. So without knowing your buddies exact financial situation / motivating factors / make model year of car, I would have to make my vote: YouTube Video Unless of course he is dealing with our dealership... then he should buy the warranty.