Extended Service Plan????


Old 05-14-18, 12:21 PM
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Extended Service Plan????

A dealer sent me an offer for an extended service plan on my 5 year old CX9 with 80,000 miles. It covers "everything" for 60,000 miles for $3,000.

Although the company has an A+ rating from BBB, there are a lot of complaints. They say that what ever goes wrong, the company attributes the problem to either a pre-existing condition or to a seal failure, neither of which are covered.

I don't know much about cars, but isn't just about everything likely to go wrong after 80,000 miles due to one of those?

The CX9 has a permanently lubricated tranfer power unit that Mazda has extended the warranty on to 90,000 miles. There is no way to change the oil, so it turns to sludge and breaks. If that happened at 92,000 miles, mightn't they say it failed because of 80,000 miles of wear from before the service plan?
Wouldn't almost anything be like that?

Any opinions would be appreciated.
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Old 05-14-18, 12:24 PM
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Personally I think you are better off putting the monthly premium money in the bank and using it for repairs if/when they happen.
Old 05-14-18, 02:25 PM
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I'm with Mark. Look at it this way: If the company didn't make money selling those contracts, they wouldn't be in business. If it's a third party offer, then not only is the warranty company going to make money, but the dealership who sells it to you will get a cut as well. In other words, they take in a lot more money than they pay out. Just pay as you go on repairs.
Old 05-14-18, 03:03 PM
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I don't mind letting them make money on me; I would just hate to have them tell me my $2,000 repair wasn't covered because it was pre-existing; I think I would kill someone.

I bought an extended warranty on my 2011 Subaru and never claimed a nickel. That was just fine. Actually I bought it online for 50% of what the local dealer was asking; so yeah, there is a lot of profit in them.

I really wanted to do this, but it probably is just asking for trouble.
Old 05-14-18, 03:34 PM
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If a car today doesn't make it to 200.000 miles then there is a fundamental issue that no warranty will resolve.

Keep the maintenance up to date, and invest that money in some good stocks.

I have never, ever purchased an extended warranty on a car, an appliance, a piece of electronics or a home and to date I have never felt that it would have benefited.

As mentioned they are there to make money by setting up roadblocks or insuring something that doesn't need to be insured,
Old 05-14-18, 03:47 PM
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One of the finical guys on radio said it you can't afford the repair and dealer is offering only get one from manufacture,. Do not get one from some company dealer says is good.
My company almost forced us to sell warranty's. I always told customer you are better off putting money i bank and pay for repairs yourself.
Old 05-15-18, 06:03 AM
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Like marq I'm not inclined to purchase extended warranties. BUT, I will say that if the price is right I will. Used to be extended warranties for smaller consumer goods were WAY overpriced - like $20 for an item with a list price of $75; not cost-effective. More recently the stores selling them I think realized they would sell many more warranties by lowering the price. So, yes, if I buy a $600 TV and the extended warranty is $15.95 or some such, then yeah I may go for it. Best example is our son, who loves his portable DVD player. When he wears one out (beyond warranty period) we always add the warranty on the new unit. Have used the plan(s) several times on units.

I think about 10% of replacement cost is my limit. I just pulled some of my electronics receipts and one of them is for a soundbar we added to the TV in our parent cave. The bar was $98 and the extended replacement plan was $9. I can handle that. Using the 10% rule I don't think I would pay more than about $500 for the extended vehicle warranty in the OP.
Old 05-15-18, 06:43 AM
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An extended service plan is an insurance policy to cover a catastrophic expense.
The companies that sell the plans make good money doing it because, in general, the expenses are less than the premiums.
I "insure" myself by having some ready money set aside in easily accessible investments.
If you do not have that rainy day fund then you may need the extended service policy
Old 05-22-18, 01:40 PM
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The issue of preexisting condition is a problem, it is not easy to baseline this to make a subsequent assessment. Looks like lots of room to avoid a claim, and lots of fraud potential for people to sign on knowing there are problems.

Might be worth clarifying in their written documentation what protocol they use to determine if there was a pre-existing issue.

Usually pre-existing will include items where a recall or technical service bulletin was in place. So in your transmission example, they would not likely cover that.

Also, no insurance covers "everything". Radios, nav systems many body trim pieces, glass etc. are not covered. Wear items are not covered.

Once you realize how little is covered, the cost benefit usually favours not insuring.

The CX9 is a good vehicle. Get a new battery, change all the fluids, get wheels balanced, steering aligned, change some belts, whatever is in your owners manual for a major service, and have the car inspected thoroughly, and you are good to go. That's the better use of some of your $3,000.

FYI, a new rebuilt transmission unit costs about $3,000, before labour. But you can get a good used unit with a couple of years warranty for about $500.

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