questionsare after-market automobile warranties a good…


My credit union offers one through a third-party vendor. In 10 years, I've never heard a member complain about the service. It's far cheaper than dealer-based warranties, doesn't require the owner to use an particular mechanic or repair company, and doesn't require the owner to front payment. (The repair shop calls the warranty company and just bills them directly.) Oh, and if the car is sold before the warranty contract runs out, the warranty is tranferable to the new owner.

Check around for options similar to this one, maybe?


They tend to be OK, but maybe in your case a good idea. You are in a tough spot with an (I'd assume) older high mileage vehicle that you must keep for several years more. Normally, in those cases, extended warranties aren't worth it. If the repair is too expensive you get rid of the car.

In your case, you would probably have to fix the vehicle, almost regardless of the cost. In this case, it's probably worth it.


Don't buy an extended warranty before reading this.


It really depends.
It depends on the warranty company, the warranty itself, and the reliability of your car
If you have a german car, get a good warranty for it, repairs aren't cheap (unless you do them yourself, then they are reasonable) :)

eta: just read the link @samstag provided. I guess I posted the summarized version. :)

j5 j5

@samstag: This looks to be for people who buy extended warranties on new cars, not quite the same scenario as @hossdawg97 posted. I think most major repairs come well after the 100,000 mile mark, which is why a warranty up through 100k miles isn't worth it.

I personally wouldn't buy one, heck I'd probably live without insurance if I wasn't required to have it on just about everything. I see it as betting against myself.


@eraten: You really aren't 100% betting against yourself, you're betting against every other idiot out there also.
A friend of mine had her car totalled by an inattentive teen who was underinsured.
She lost her car and racked up significant medical bills over it (past what her own "underinsured driver" coverage allowed)

j5 j5

@eraten: Extended warranties beyond 100k miles are much worse. You'll find a lot of rules and exclusions in the fine print and you'll have a hard time getting any repairs paid for.

The best warranty for a car over 100k miles is to start saving money for future repairs now.


Extended warranties are a terriable buy. They on average pay out less than 15% in claims which means for every $100 in coverage you buy you get less than $15 in coverage. It is about as close as you can get to being a scam and still be a legitamate business.


In addition to all the above sound advice, know that they can be beneficial- at the right price. The price quoted to you at a dealership is based on 100% markup- their cost is half or even less of the price they quote you. Negotiate the price down after the car price is agreed upon, and if you're not comfortable doing that(or, like me, you just hate "the game" of car haggling) you can spend a little money with a professional auto consultant who can negotiate everything about the deal for you. Spend a couple hundred, save thousands(potentially).


An important factor would be the reliability of your car. Do some research on vehicle specific forums - many if not all vehicles I've owned have them, assume that's true for you as well.

As examples, early Ford Focii (what is the plural of Focus?) tended to self-destruct around the 100k mark. Early Saturn Vue AWD yakked up $4-5,000 transmissions on a regular basis. Late 90's-early 00's Toyota and Honda minivans had a tendency to sludge up the engines to the point of failure, b/c they really needed synthetic oil, even though the mfg never told anyone that. Etc., etc.

Combine what you learn about your vehicle with what you find out about extended warranties. Agree with the first post that someone like a Credit Union, who is at least nominally on your side rather than just trying to make a fast $, is probably going to be your best bet.

Then do the math. Me - I do almost all my own repairs, so not worth it. If you are handy, and can find a driveway, that's your best bet (IMHO).


Also, with proper maintenance, and unless they have a significant history of specific failures (transmission, etc), most vehicles will last well beyond 100k without any significant repairs. In the last 20 years, I've driven my vehicles to 150k - at least four of them. The only really significant repairs were either related to known model-specific issues ('95 Sable - Transmission; 2002 Escape - Transmission mounts + accident) or other people (being T-boned, history of poor maintenance before I got a car, etc.).

That said, am going to put in a huge plug for maintenance. Keeps your car going. Change your oil. Change your other fluids - coolant, tranny fluid, differential (if you have one, etc). If you have a timing belt, CHANGE IT NOW!!! (if you haven't already). Staying on top of your maintenance is your best bet for keeping your car running for many years to come. Oh, yeah. If you haven't already done so, 100k is the usual point for a tune-up. Do it before the plugs seize.


@magic cave: I work for that third party, and everything you said is true. Unfortunately, the extended warranties we offer expire at 100,000 miles, and the original poster's question is about warranties that exceed that number.

As a heads up, you don't have to finance your vehicle through a credit union to go into a credit union and get this warranty product, and the warranty policy is always far cheaper than a dealer's extended warranty (plus, as magic cave said, you can repair your vehicle just about anywhere, you aren't limited to repairing it at a dealership).


Having worked with after market repair warranties (some over 100k coverage) from the dealership/repair facility end...
It's a serious gamble. In my experience (only) - there were a few that had good contracts that worked out well for the customer. The problem is that these companies often go under, get sold to another company, and that's when coverage problems show up. Also, you need to verify the cost of repair caps for each major repair vs. what your mechanic is quoting you - you will be responsible for any difference.

I personally think you would be better off taking the money you would've paid into the repair warranty and put it into either CD/MM/decent yield savings account and have it there if you need it. Then you're covered and don't have to worry that your contract is no longer worth what you paid for it.

(This advice is based on the vehicle having more than 100k miles on it when you buy the contract)


@kainis: Woohooo! Thanks for your follow-up! And thanks for the mileage clarification as well. My current area of work doesn't usually bring me into contact with warranty owners, and I feel a little dumb now for having forgotten the mileage limitation.

At any rate, I'm delighted to hear from you, as I'm a big fan of your employer. I used to query members about their experience with the warranty service, and without exception all I heard were raves, mostly about the customer service and the ease of the repair process.