United Car Care?

[Wade Lippman]

Our car has 80,000 miles on it. We have never had anything but a couple trivial repairs on it so far, but expect that will probably change. Accordingly, we are looking at new, somewhat smaller, cars. An extended service plan just came in the mail, through a dealer we had some routine maintenance done at. It gives 5 years or 60,000 miles for $3,000. That seems like a good price, it the company is any good.

Has anyone ever used them? They have an A+ BBB rating; but lots of complaints. The complaints say they will attribute it to a pre-existing condition, or something not covered by the warranty. For instance, they only cover seals when required by covered problems. If the failed seal caused the problem, then it is not covered. Chicken and egg?

The power transfer unit is "permanently" lubricated. Mazda has extended the warranty on it to 90,000 miles, presumably because there have been lots of problems. The repair is $2,000. Will that be a pre-existing condition? I sure don't know. It didn't completely develop prior to the service plan, but it can't be prevented either. I am sure lots of things are like that.

Any opinions, preferably by users, would be appreciated.

[Jim Becker]

Many 3rd party service contracts are fraught with risk and difficult claims, etc. I personally would only buy a manufacturer provided extended service contract. (That's what these are...they are not technically "warrantees" legally, but service contracts, despite what most folks call them including in marketing materials) Many dealers will hawk 3rd party plans first because they make more money on them. Relative to the cost you mention, I have a Mopar MaxCare Lifetime Extended Service Contract on my Grand Cherokee and my cost at a discounted online dealer was $2180 at the time. The same plan currently sells for about $2800 on the street at discount. This plan covers everything except "wear items" such as tires, brake pads/rotors and other consumables and that's for unlimited miles and unlimited time until the ACV of the vehicle is less than a repair cost. $100 deductible. So in my mind, $3000 for a Mazda or similar is a bit expensive. Subraru's Gold plan can be had for well under $2000 for 5 yrs/60k miles as another example.

[Tom Stenzel]

I've never had United but I've had service contracts on several vehicles. The one I came out ahead was my 1989 Ford F-150. The contract people lost a ton of money on it. The vehicle was such steaming pile Ford lost my business to this day.

Besides what Jim mentioned you need to watch for service intervals. The manufacturer might recommend changing the coolant at 100K miles. The contract might say 30K miles or the the cooling system part of the warranty is void. Watch for the gotchas like that. I remember someone trying to sell me a service contract for my Venture that had just about everything in the vehicle voided the day I signed it. Oddly enough I declined his generous offer!

-Tom

[Marshall Harrison]

I don't do 3rd party warrantees after getting burnt years ago. We had an extended warranty on a Ford van. One day I got a letter from them informing me that they had filed bankruptcy and were dropping all existing contracts. They turned our almost the next day and started doing business under a new name but refused to honor the warranty that I had paid for. I swore to never again do an extended warranty like that.

[jared herbert]

my opinion is that unless it is a factory warranty it is completely worthless. Save the money that you would invest in the warranty and put it towards the purchase of another vehicle.

[Bruce Volden]

Run, run, run!
You are money ahead fixing things out of pocket.
I called one of those postcard thingies for extended warranty a few weeks ago--for fun. For about $1600/year I could have "bumper to bumper" coverage.
I told them my "09 Edge has over 200K on it! They put me on hold for a minute and then said I could still have the coverage --- $2800/year.
These extended warranties ALWAYS work best for those selling them.

Bruce

[Carlos Alvarez]

Every vehicle extended warranty I've had has paid for itself. I was probably just unlucky in vehicle choices I guess. But that's what the game is; they don't always favor the seller, but overall they have to, statistically. You're really just betting on whether the vehicle will have more expenses than the cost of the plan.

I have 70-ish days to decide whether to put the Mopar lifetime care plan on my Jeep. It's a proven-reliable platform, so for $3k I'm thinking probably not. Although if I keep it as long as the previous vehicle, it might pay off. Hard to say. Also I'm really not the type to work well within dealer service limitations, and do a lot of my own work. Dealer service is just too slow and restrictive. If I use a shop, I'd rather use an independent that works on a schedule that's closer to mine. So the OEM extended service is less appealing to me.

[Jim Becker]

Carlos, with all the tech these days, quite often the Mopar lifetime contract does pay for itself. Mine has on my JGC and it's the reason I can feel comfortable keeping the vehicle for a few more years while my younger is in college and I'm figuring out this retirement thing. You should be able to get it for under $3K from Ziegler or a few other online dealers who discount. I've not found any limitations related to dealer service, but then again, that's the side of my local dealer that actually is worthy. (I don't like the sales side at all) And I've used it when traveling, too. The contract follows the VIN...

[Bill Jobe]

Stepped on someone else's post.

[Carlos Alvarez]

Yeah, I'm still on the fence, Jim. But after my most recent dealer visit, I'm 51% "no." Not that it's terrible or anything, it's just not a good fit for me. First, both dealers are a little ways. One is ten miles (20-ish minutes) and the other is about 40 minutes. The close one will shuttle me home. The far one is better about same-day in and out, but not all the time. The close one is only fast for oil changes and things like that (they have a deal where you buy FIVE changes for $80 flat, tax included). Both are very busy and just not great at doing things on time. Meanwhile I have a really great indie shop just at the edge of town. Literally the very first business I come to heading into town.

Unfortunately I learned something about the cost of these plans; they go up the longer you wait. If I had purchased it during the first few months, it would have been $2700. Now it's a bit over $3k because they start scaling up the price as you get more time/miles on the vehicle. Weird but true. That's the $100 deductible plan, the $200 plan is $2960.

[Jim Becker]

The break point is 12K/12mos...and then you get hit with an extra hundred or so.

[Lee Schierer]

I've owned 5 Mazdas, three sedans, one truck and a Miata. None have needed extensive maintenance. The first four all had over 120K miles on them in NW PA. I would put the $3,000 in a Certificate of Deposit where you are not likely to use the it and when you sell the car use that money as a down payment on the new car.

[Carlos Alvarez]

I've owned 5 Mazdas, three sedans, one truck and a Miata. None have needed extensive maintenance. The first four all had over 120K miles on them in NW PA. I would put the $3,000 in a Certificate of Deposit where you are not likely to use the it and when you sell the car use that money as a down payment on the new car.

I've had more repairs on a couple of vehicles. Probably because I let them idle too much.

But seriously, one was a known common trans issue ("they all break") and other big one was a major AC repair. In AZ, nobody is shocked when an AC system failure happens.

I've won so far on buying them, but think I'll probably just gamble on the Jeep.

[Carlos Alvarez]

The break point is 12K/12mos...and then you get hit with an extra hundred or so.

The current quotes are several hundred more than the original one. Maybe it goes up every year?

[Wade Lippman]

I've decided to pass.
It was sorta like buying a season pass to ski. It is expensive, but once you do it, skiing is "free". But here I doubt the economics work out.
Thanks.

[Jim Becker]

The current quotes are several hundred more than the original one. Maybe it goes up every year?
There was a recent price increase, unfortunately, so that likely bumped it up a little more.

[Greg R Bradley]

The car repair shop that I own refuses to deal with any of them. The service manager tells me that the few that were decent have become a joke. They are basically a huge profit center for the used car dealers so they push them hard. They end up denying most claims since they mostly warranty parts that don't fail. Read the list of covered and not covered items and try to reconcile that with parts that actually fail.

An extended warranty from the manufacturer on a new car is a completely different warranty. Those require repairs performed by the dealer with rare exceptions.

None of that is to say that there aren't certain repairs that might make one a good idea. But you won't know that unless you waste the money on one and then just get lucky enough to have it work out.

[Carlos Alvarez]

They end up denying most claims since they mostly warranty parts that don't fail.

This is a reminder to only buy an exclusionary warranty, not an inclusionary warranty. Exclusionary means that EVERYTHING is covered except for the specific items or classes of items that they spell out. So for example, the service contract that bought us a new trans and AC basically said EVERYTHING except X is covered. The list of items was all the obvious stuff like the battery, brake pads (but not non-wear brake items), clutch plates (but not non-wear clutch items), etc. No issues. When we had an injector problem on the BMW, the exclusionary warranty excludes oil and other fluids, however I said that the oil was polluted by the failed injector so they covered it ($150 at the dealer, $80 elsewhere).

They are not all the same, and they are not all a poor value.

[Marc Jeske]

Simplified, any and all insurance spreads the risk, but, at end of day, as in Vegas, the House wins.

Marc

[Bruce Wrenn]

With the average mileage of the four vehicles sitting in our yard on the north side of 200K, we have spent less than $2000 on them over the years. Single most expensive item was carburator for my Mighty Max pickup ($499,) It comes with a lifetime warranty through Autozone. When I buy parts, I always try to buy lifetime warranted parts. This week had to replace a cooling fan relay on !998 Chrysler Town and Country. Took defective one to Advance, along with receipt, and in less than five minutes was on way home to install it. ALWAYS MAKE A PHOTO COPY OF RECEIPTS, as they quickly fade, especially kept in glove box. Autozone' computer keeps better record than Advances. Seems that Advance purges their every three years. Once went into Advance to replace a mass air flow sensor ($150+) for Areostar van, and their computer said I had never bought anything from them. Went to car (Honda Civic) and brought back copies of receipts for muffler, master cylinder, and distributor, all bought from that Advance store. Told them, "Now tell me I haven't ever bought anything from Advance." Walked out with replacement mass air flow sensor, at no cost to me. FYI, MAS was a store brand that only Advance sells. As a side note, brother used to do inspections for an extended warranty company. Weirdest call he ever got was to come remove some dangerous materials form a lease return Toyota. Turned out to be three 30# cylinders (unopened) of R-12, which he sold for $1200. Not too bad get paid for inspection, and sell the R-12.

[Art Mann]

The economics of such contracts will never work out, regardless of who is offering the contract. The company is willing to bet your repairs will, on the average, be less than the cost of the contract. That is how they make money. If you are financially able to pay for your own repairs, why wouldn't you want to take the same bet? Perhaps if you are a very poor driver . . .

I have a friend who bought an after market service contract from a Honda dealer when he bought a late model used Odyssey. When his transmission failed at 90,000 thousand miles, he had to get a lawyer to force the company to pay. It took two months. He was lucky to have a spare car.

[Jim Becker]

Art, I understand your logic and in aggregate, the general service contract market favors the provider over the consumer. I will say, however, that my Mopar lifetime contract has paid for itself twice over because of the expense that would have been incurred to replace some very pricy components had I needed to pay for them outright. I wouldn't have bothered if I was only going to hold the vehicle for 4-5 years or wasn't racking up a lot of miles, but I knew I'd blow out the OEM warranty in about two years and later determined I'd be driving it for a lot longer due to my retirement and having my younger in college. Now keep in mind that this is a manufacturer contract and covers everything except "consumables". It's not a shaky, 3rd party contract which I'd never, ever buy on anything.

[Carlos Alvarez]

Man, so many absolutes expressed here. I'm going to cancel my car and home insurance because they never pay off and the economics never work out.

[Jerome Stanek]

Isn't that an old joke you buy life insurance and the company is hopingyou live and your hoping you die

[Marc Jeske]

Man, so many absolutes expressed here. I'm going to cancel my car and home insurance because they never pay off and the economics never work out.



I think this must be sarcasm, or totally wrong.

If your "luck" ends up w no or minor claims, ( less than you paid in) then you "lose"

But if your claims exceed your payments, then you "Win".

Well, assuming they pay w/o major hassle as mentioned above..

But, and this is a BIG BUTT - many of these third party warranty co's make one jump through toooo many hoops - REALLY needs to be considered.

So to say it "never" works out is totally inaccurate.

But, still long term, as a pool of payers/claimers, the House still wins.

Exactly like any Lottery.

Obviously this is simplified, no regard to anything like potential ROI of funds not used as Premium payments if one self insures,other stuff like that, but still accurate enough.

If you buy $1,000,000 of Life ins today, pay i dunno maybe a couple hundred to start it... and you get totally sucked into your 1946 Northfield 24" Jointer the next day,with just your steel toes of yer boots left hangin above the outfeed table, and your Wife and new Boyfriend get a check a month later for $1,000,000, well then it was worth it.. Right ?

They will probably have to replace the DC, specially if in hot summer, but they'll be left sittin pretty.

The Northfield will come out unscathed after a bit of cleaning.

Pretty sure we all know this, just sayin.

Marc

[Marc Jeske]

That said, I will add - In a week i'm ordering two 24kbtu "window" AC units ( about $700 each)for a new shop..either Amazon or Walmart..and seeing as how US made window AC is not available.. and figuring high chance of Chineez throwaway.. I will be seriously looking at spending about $30 for each for a 2 year warranty extension.

Marc

[Carlos Alvarez]

But, still long term, as a pool of payers/claimers, the House still wins.

Of course, like all insurance.

[Jerome Stanek]

You have to check some of those warranties that say extended. When I was buying one of my trucks the dealer offered an extended warranty saying it was bumper to bumper but when I checked it over it did not cover the bumpers and other stuff also it was not extended by the 5 years that it sounded like as it started the day I signed the paper work. so it only extended it 2 years. The guy trying to sell it gave me an example of how it worked he said if something broke you bring it in and pay $75 and they would cover the rest and if you had a problem that was small you still paid the $75 dollars and every repair had to be recorded.

[Jim Becker]

Jerome, many OEM extended service contracts do start at mile 0/day zero. During the original OEM warranty period, the deductible doesn't apply, but other benefits are often available. With my Mopar plan, for example, the rental/loaner provision is active from day one. (it stops at 7 years/100k miles, however) As you note, it's very important to carefully review the actual contract before signing up and paying for it. As Carlos noted, there is also a time window for the best price...typically in the first 12 mos/12K miles, after which the price often bumps up. That's how the OEM manufacturer "compensates" the buyer for signing on while still under the original factory warranty.

[Tom M King]

We come out ahead, in the end, by not buying extended warranties on anything.

[Jerome Stanek]

Jerome, many OEM extended service contracts do start at mile 0/day zero. During the original OEM warranty period, the deductible doesn't apply, but other benefits are often available. With my Mopar plan, for example, the rental/loaner provision is active from day one. (it stops at 7 years/100k miles, however) As you note, it's very important to carefully review the actual contract before signing up and paying for it. As Carlos noted, there is also a time window for the best price...typically in the first 12 mos/12K miles, after which the price often bumps up. That's how the OEM manufacturer "compensates" the buyer for signing on while still under the original factory warranty.

So you are agreeing that a 7 year extended warranty is really only a 4 year one. My dealer gives me a loaner when ever my ruck needs to be in more than a couple hours.

[Jim Becker]

So you are agreeing that a 7 year extended warranty is really only a 4 year one. My dealer gives me a loaner when ever my ruck needs to be in more than a couple hours.
It depends on the extended service contract language (again...these are not technically "warrantees"). So if the language says it's starts at mile 0/day 0 of inservice for a new vehicle, yes, the contract is for 7 years from the date of purchase. As to whether or not it's financially worth it, that's an individual decision. For me, I paid $2180 for my lifetime service contract (list price at the time was about $3500) and it's covered at least $4500 in parts and labor to-date for some tech items that needed attention as well as a water pump that prematurely failed. Since I'll be in this vehicle for another 3+ years at least, I'm comfortable with that. It's really the tech things that drove me to this, in addition to knowing that I was going to blow out my OEM warranty in only two years because of mileage. My vehicle has an air suspension, numerous electronic features for comfort and safety, etc., and individually, they are expensive if they need repair or replacement. I'm more comfortable with $100 per incident in that respect. But that's me. Nobody should do anything unless it's the right choice for them.

Many dealers do not, BTW, have loaners anymore...but that's not material to this discussion. I only mentioned that because it was an example of a contract benefit that might be available during the original OEM warranty period.

I'll also reiterate again, that I'll never even remotely consider a 3rd party service contract on a vehicle. It's it's not from the manufacturer, I'm not interested.

[Carlos Alvarez]

We had a third-party contract on our 3/4 ton diesel. Paid for a transmission and a major AC job, as well as a couple of minor things. Huge win ($2500 contract, $8k in work). It also covered "first day" rental vehicle insurance in a like vehicle, so we could ask for another 3/4 ton diesel or a car or whatever really. Basically drive in and leave with another car, nothing to think about. Replaced that with a Jeep, and had the lifetime warranty with Chrysler. Never needed it, and when the Jeep was totaled, we got a pro-rated refund. But it would have added first-day rental vehicle coverage and a few other things over the factory warranty, so running concurrently isn't a total ripoff. The BMW had a BMW add-on warranty which in retrospect was a bad idea and I should have gone third-party. It was just so expensive. But with BMW, you literally just call them and they come bring you a car and take yours if there's a major issue, or drop it off and leave in another BMW. The injectors failed and they picked it up, left us a near-new BMW in the driveway. So the contract once again paid off, though a third-party contract would have done so also for half the cost.

We have another Jeep now, and a couple months to decide on the service contract. I'm pretty sure I won't get one.