Auto Service Agreement

[sweetpetutie]

After a lot of looking around, I found a car I really like and the deal was pretty much worked out until I started reading reviews of the dealership on line. I typically don't place too much value onto people's reviews because they could be related, ticked off or who knows what without providing a useful review at all, but the bad outweighed the good in too many different websites not to put more thought into the decision. The car manufacturer has a great warranty but I didn't go as far as the finance person so I'm not sure how much that would be, but with reviews related to the unresponsiveness and rudeness of their service department, I think I'd prefer getting a service warranty with another dealership. Does anyone know if these are available outside of the dealership where you buy the car? The dealerships seem to have such little inventory now that it's difficult finding everything you want in a car without traveling for miles around. Thanks

 

[Chasey_Lane]

Every time I purchase a vehicle I get mail relating to extended warranties, not originally offered by the dealer. They are usually cheaper. You can try to haggle the price of the warranty with the finance person.

 

[ProfMoneyWise]

You did not ask but . . . pay cash for your vehicle. Do not use borrowed money to pay on a depreciating item. Cars go down in value every day. Friend of mine's Grandfather was known to say, "if you have $5 and need a car then you buy a $5 car."

As for your question I am assuming you are talking about an extended warranty which picks up after the manufacturer's part is done? If yes, an extended warranty sounds like a good thing to have but it's best to stay away.

The worst thing about an extended warranty is that it is overpriced. In fact, about half of what you pay goes to the salesperson's commission. So a lot of the money you hand over doesn't even go toward the purpose of the warranty, which is to pay for things that go wrong with the car over the contract period.

The smart move to make would be to set aside half of what you would pay for the warranty, and use that money to handle any car repairs that might come up. Not only is this more efficient, but you won't be out of luck if the service company goes bankrupt (which has happened).

For the dealer, it is more important than ever to sell an extended warranty when they sell a car. The National Auto Dealers Association says that the average car dealer is losing money on the sale of each new car, so tacking on the warranty is crucial for them to make money.

Unfortunately, more people are buying it. Ten years ago, according to the NADA, 23.5% of people who bought a new car bought extended warranty plans. That figure has risen to 34.4% in the first half of this year.

Recently, Consumer Reports surveyed 8,000 of its readers about warranties and discovered that 65% of them spent significantly more for the new car warranty than they got back in repair savings. That means, with no debt and an emergency fund, you can afford to fix what goes wrong with your vehicle without buying this rip-off.

 

[aps45819]

As for your question I am assuming you are talking about an extended warranty which picks up after the manufacturer's part is done? If yes, an extended warranty sounds like a good thing to have but it's best to stay away.

The worst thing about an extended warranty is that it is overpriced. In fact, about half of what you pay goes to the salesperson's commission.
Recently, Consumer Reports surveyed 8,000 of its readers about warranties and discovered that 65% of them spent significantly more for the new car warranty than they got back in repair savings.

An extended warranty is a major rip off.

 

[Chasey_Lane]

An extended warranty is a major rip off.

I've used one before many times. It ended up paying for itself and then some.

 

[glhs837]

For the dealer, it is more important than ever to sell an extended warranty when they sell a car. The National Auto Dealers Association says that the average car dealer is losing money on the sale of each new car, so tacking on the warranty is crucial for them to make money.

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Sorry, Prof, but I aint buying that one. Those guys are hardly the unbiased source for information about this. As for who you get the warranty from, the factory warranty, that has no bearing on where you get service.

Say, for instance, you buy a car from Park Dodge. for the term of the factory warranty, you can get that vehicle covered under warranty from any Chrysler/Jeep/Dodge dealer. Thats warranty repair, though, not service warranty. Which is what I think you are talking about.

Meaning "Pay $500 up front, and we cover service for the length of the factory warranty" is that what you are talking about, because those are indeed dealer specific.