The term extended warranty is a holdover from the 70’s when the plans first started to come about, and it remains a generic term.
It is an “Extended Service Plan”
The thing I really do not like about the way they promote and sell this product is the fact that they do not tell you up front, in plain English, what this thing does and does not cover.
Jerry, I’m looking at my plan brochure right now and it lists every covered component.
No mention of any appearance items, or electronics for that matter
My brochure lists over 35 electrical items and separately lists the CD player, receiver and tape deck along with all of the CB intercom components. For those with sidecars, those components are also covered.
just cut to the chase. Take the money you would have spent on the "plan" and invest it. After your two year warranty expires, if you need repairs the money will be sitting in your account. If you don't need repairs, you are at least $1k+ ahead of the game. The majority of people who buy service contracts never recoup their investment
This can be a wise decision. Something you have to sit down and think about.
Will you really take the money and save it? Are you financially able to not let it be a concern?
I do agree, most people will probably not recoup their investment.
My opinion? I worked in the new car field for over 17 years and I have to tell you it is so much easier to call up Joe Customer and say “Joe, I have bad news and good news for you…. Your transmission is totally fried and the replacement is over $3000.00, but your extended plan does cover it along with the $250 tow. Your deductible will be $100.00”.
The plans are expensive, but they can give you piece of mind. Most plans can be rolled into the purchase agreement and financed along with the rest of the vehicle. That can be important to many people.
Note that I do not believe in contracts for most consumer items, the cost / benefit ratio is very one sided, example, TV’s cameras, appliances etc.
Example would be;
$30,000 SEEG, $1300 service plan, roughly 4.5% of the cost
$3500 LCD TV, $650 service plan, roughly 18.5% of the cost
You buy a new car and you will put miles on every month of the year, good chance any problems will surface before the basic typical 3 year - 36000 mile warranty runs out.
You buy a new bike and you may only put a few thousand miles a year on it and run out time way before you have sufficient miles on it to have any problems crop up (except maybe mine).
Most service plans have benefits that begin on day one of ownership, such as trip interruption, rentals, hotel coverage etc.
Harley also offers an extra cost option to cover tires and wheels damaged by road conditions, which also begin on the 1st day of ownership.
Probably the biggest selling point though is that you can sell your bike and offer the extended coverage plan to the buyer. Think it would help sell your 5 year old performance dresser if you offer the buyer the remaining 2 year warranty?
So, I did buy it for my 05 SEEG, because of all the extras on that bike. Had I bought the Night Train instead, I probably would have passed it up.
I did not buy it for either of my last 2 new cars.
I did buy my wife a 3 month old Lincoln Continental a few years ago. Because it was a “Certified Used Lincoln” it came with an extended warranty rolled into the price. (many dealers do this with their “certified pre-owned” vehicles).
I don’t know how much that plan cost, but it included a rental every time we went for service and the repairs over the last few years have been expensive (not to us). We have had engine, a/c and other problems over the last few years. The last A/C repair alone was almost $2000.
If you decide to buy any extended plan, consider this. Only buy factory offered plans.
Over the years there have been many extended plans sold at dealers that were nothing more then in house plans, they are banking on you not having any problems. Many insurance companies offer plans too.
Bottom line here is, if you came into my dealer with an other then Chrysler plan we made you pay for the repair and then you would have to “try” and collect for the repair.
My 2 cents
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Topic: Extended warranty (Read 3834 times)