extended warranty: how to negotiate price down

[KLS]

I'm about to buy a new car and regardless of what I buy, I'm trying to
determine whether to go for the manufacturer's extended warranty. One
offer is for $1,500 for 7 years or 100k miles (kicks in after regular
warranty expires), no deductible at the dealer I buy from, and $50 at
other dealers for warranty repairs. Nearly everything is covered
except for routine maintenance items (oil changes, brakes, tires),
etc. What's the SOP on negotiating the price on these? 10% off?
More?

 

[Carl 1 Lucky Texan]

I'm about to buy a new car and regardless of what I buy, I'm trying to
determine whether to go for the manufacturer's extended warranty. One
offer is for $1,500 for 7 years or 100k miles (kicks in after regular
warranty expires), no deductible at the dealer I buy from, and $50 at
other dealers for warranty repairs. Nearly everything is covered
except for routine maintenance items (oil changes, brakes, tires),
etc. What's the SOP on negotiating the price on these? 10% off?
More?

Most extended warranties have 50% profit built in. It's like any
insurance. There is a risk/benefit calculation you must make for
yourself. I'd suggest an alternative might be to use the funds for the
ex warr and start a 'car fund'. Open an account, put that money in - try
to add $20 regularly, if you keep the car after its paid off - continue
making car payments to yourself in that account. When you need to make a
major repair, or trade into another new car, there will be some funds
there to help.

2 things to be aware of. Usually best to avoid 3rd party warranties. But
you seem to know that.
Also, some folks have founde better pricing through on-line dealers such
as www.subarugenuineparts.com and others.

And if you live in the South especially, confirm the warranty will cover
the A/C system. In the past, many warranties were not very inclusive.


Carl

 

[Frank]

Most extended warranties have 50% profit built in. It's like any
insurance. There is a risk/benefit calculation you must make for
yourself. I'd suggest an alternative might be to use the funds for the
ex warr and start a 'car fund'. Open an account, put that money in - try
to add $20 regularly, if you keep the car after its paid off - continue
making car payments to yourself in that account. When you need to make a
major repair, or trade into another new car, there will be some funds
there to help.

Dittos.
I never buy these warranties. Subaru is always pestering me with offers.
Figure the more they pester, the higher the profit

Frank

 

[Howard]

I'm about to buy a new car and regardless of what I buy, I'm trying to
determine whether to go for the manufacturer's extended warranty. One
offer is for $1,500 for 7 years or 100k miles (kicks in after regular
warranty expires), no deductible at the dealer I buy from, and $50 at
other dealers for warranty repairs. Nearly everything is covered
except for routine maintenance items (oil changes, brakes, tires),
etc. What's the SOP on negotiating the price on these? 10% off?
More?

If you make purchase of the car contingent on it you should be able to get
it for $100 over dealer cost. They are sold through parts departments (like
floor mats or trailer hitches) and the dealer has little overhead in the
warranty, just needs to complete the paperwork and submit it. The problem is
determining the dealer cost. There are some dealer parts departments that
sell the warranties online but they are becoming fewer. I imagine this is
because of pressure from Subaru NA and other dealers. Also as another poster
pointed out only go for manufacturer's warranty not any 3d party one. The
usefulness of the warranty for a Subaru I can't comment on. With two Ford
products I purchased the warrantees paid for themselves between year 3 and 5
of ownership. Also be aware that the warranty is 7 years from day of
purchase not from when basic warranty expires. Good luck

 

[Bonehenge (B A R R Y)]

I'm about to buy a new car and regardless of what I buy, I'm trying to
determine whether to go for the manufacturer's extended warranty.

Why not toss $10 a fill-up into a money market account during the
manufacturer's warranty period?

If you need an expensive repair, you'll have the money. If not, you
get to keep it! Statistically, you'll have a few thousand bucks when
you replace the car.

Places like Vanguard will let you open the account with as little as
$50, with a monthly deposit plan.

Extended warranties are simply expensive, specialized insurance, with
lots of built-in profit for the seller, and lots of hassle for you.

 

[Paul Pluzhnikov]

Extended warranties are simply expensive, specialized insurance

That is generally true.

However, if OP is financing the car, there may be another
consideration: the lender may offer a discount if you buy extended
warranty. When I bough my OBW, the cost of extended warranty came
to $0 over the life of the loan (IIRC), once the discount was
factored in.

Cheers,

 

[Bonehenge (B A R R Y)]

That is generally true.

However, if OP is financing the car, there may be another
consideration: the lender may offer a discount if you buy extended
warranty. When I bough my OBW, the cost of extended warranty came
to $0 over the life of the loan (IIRC), once the discount was
factored in.

Very interesting!

Who was the lender?

 

[Paul Pluzhnikov]

Very interesting!
Who was the lender?

Wells-Fargo Auto Finance.

I suppose it's possible that the "Finance Guy" at the dealership was
pulling my leg, and that I could have somehow gotten the discounted
rate even without the extended warranty. But the terms (before
discount) were better than what my bank offered, so I didn't have
much space for negotiation (are the loan terms negotiable at all,
when you are about to sign the loan docs at the dealer?)

Cheers,

 

[Bonehenge (B A R R Y)]

I suppose it's possible that the "Finance Guy" at the dealership was
pulling my leg, and that I could have somehow gotten the discounted
rate even without the extended warranty. But the terms (before
discount) were better than what my bank offered, so I didn't have
much space for negotiation

Maybe, maybe not.

Either way, it sounds like you did good. It also sounds like a
seriously creative F&I guy. <G>

 

[Todd H.]

I'm about to buy a new car and regardless of what I buy, I'm trying to
determine whether to go for the manufacturer's extended warranty.

Dont'. If you'd like one, buy it later. Any subaru dealer can sell
them, and some dealers sorta specialize in them and discount them
heavily versus other dealers.

Some dealers don't negotiate on these, and most don't get anywhere
close to the dealers who do.

Search the archives at groups.google.com on my posts on extended
warranties for soem of the dealerships that discount these heavily,
the two types of warranties that are sold, and the various deductible
levels available.

For what it's worth all my car's problems sadly started just 7k miles
after the 100k/0ded exclusionary policy expired, so mine didn't end up
saving me money. YMMV, though. I'm sure as heck glad I didn't spend
a ton on that warranty though.




Best Regards,

 

[alex]

I'm about to buy a new car and regardless of what I buy, I'm trying to
determine whether to go for the manufacturer's extended warranty. One
offer is for $1,500 for 7 years or 100k miles (kicks in after regular
warranty expires), no deductible at the dealer I buy from, and $50 at
other dealers for warranty repairs. Nearly everything is covered
except for routine maintenance items (oil changes, brakes, tires),
etc. What's the SOP on negotiating the price on these? 10% off?
More?

I would skip the warranty. In any case you almost certainly have until
the expiration of the mfr warranty to decide on whether to purchase an
extended one, so you have 3 years to decide. Ask the sales at the
dealership -- they should tell the truth to a direct "yes" or "no"
question.

If you do decide to buy one: third party ext warranties are generally a
bad idea, with possible exception of AAA (which I heard are better:
good coverage, valid in any of the shops on their "recommended" list,
which are plentiful, and do not require submitting claims).

Disclaimer: I have never owned an extended warranty.

 

[Carl 1 Lucky Texan]

I would skip the warranty. In any case you almost certainly have until
the expiration of the mfr warranty to decide on whether to purchase an
extended one, so you have 3 years to decide. Ask the sales at the
dealership -- they should tell the truth to a direct "yes" or "no"
question.

If you do decide to buy one: third party ext warranties are generally a
bad idea, with possible exception of AAA (which I heard are better:
good coverage, valid in any of the shops on their "recommended" list,
which are plentiful, and do not require submitting claims).

Disclaimer: I have never owned an extended warranty.

One more possibly interesting product. In the past, Geico offered a 3rd
party waranty that had a mileage limit but unlimited time. If it took
you 15 years to get to 100K (or whatever) you were covered the entire time.
All the other comments still apply - that is, the Geico product is
likely designed to bring in a lot of profit for them. (plus,
availability varied by State IIRC)

fyi

Carl