New Car Extended Warranties

So I’m buying a new car-- a Honda Civic Hybrid. There’s really not very much data on the reliability of these cars, but the Civic is very, very reliable.

The dealer wants to sell me the extended warranty, which is $1800 for 6 year, 100,000 miles and a $50 deductible. I tell him I’m going to go do some research and I’ll let him know by Tuesday. The research says to make sure it’s a HondaCare warranty, not a third-party warranty, and that the deductible is per visit, not per repair. It also appears that I can wait and buy an extended warranty at any time before my factory warranty is up.

It looks like I can buy an extended warranty online from a dealer in RI. It’s HondaCare, it’s $0 deductible, and 8 years 120,000 miles for $940. It’s good at any Honda dealer, including my local one. Check it out at http://myhondawarranty.com.

So half the price? What’s the catch? I assume that’s where my dealer is trying to make his money. Is there any drawback to waiting a year or two on the factory warranty and seeing if the car seems to need frequent service?

The catch is that dealers consider extended warranties like any other vehicle option (leather, CD player, premium wheels, etc). It’s all about mark-up. You can almost always negotiate the extended warranty price. I am willing to bet that if you went in with that evidence of the price for that warranty through another dealer, your dealer will come down in price. He will see it as obviously you are interested in a warranty since you went and did research on your own, and he can either make a little money if he comes down to something you are happy with, or zero money if you purchase elsewhere.

You can always buy the warranty while your vehicle is still in warranty, but some extended warranties become more expensive to purchase as the vehicle gets close to when the standard warranty expires. Usually you can go online to the warranty calculators and just enter higher miles to see if the price changes.

Since you are getting a hybrid, pay very close attention to the warranty relating to the batteries. Some extended warranties, even if they are from the manufacturer, cover battery replacement differently than you would expect. Some consider them a “wearable” item like brake pads, and don’t cover them at all.

Good advice on the batteries. Checked it online:

I have a Hybrid vehicle. Will Honda Care cover my Hybrid’s IMA Batteries?

Yes. A Honda Care service contract will extend the length of your Hybrid’s IMA batteries.

I don’t know about the one from my dealer.

I’d go to your dealer and ask him to match it, if nothing else.

Absolutely. That’s what I did, and they dropped the price immediately.

It’s just another case in the car-buying process of not getting something unless you ask for it…

Greetings:
The question I’d be asking is whether the warranty is even worth it at half the price. While the hybrids haven’t been around long enough to have deep data, Honda is generally quite good on reliability. I’ve got a 2001 civic with about 75K miles on it, and the only things I’ve had to get done on it are regular maintenance things, like oil changes, replacing the tires, and replacing the brake pads.

You’ll have regular insurance for catastrophic failures, like running it off the road into a ditch, so what’s going to cost $800 to fix? How much are the batteries if they do fail?

Best,
Michael.

On a modern car, what DOESN’T cost $800 to fix?

As you already know:

You can buy the Honda Extended Warranty after the purchase.
You don’t have to buy it right then.
You can buy the warranty from a dealer in another state.

It’s amazing how much you can save.

There’s a guy in Maryland who does a really good job selling them. I’ll see if I can find his information.

But what about that study that showed a Hummer is cheaper than a hybrid for 100k miles lifetime?

Buying an extended warranty is about peice of mind. You have to decide if dishing out a grand for one is worth it to you not to have to worry about problems that may arise.

Many also include road-side assistance and car rental coverage for repairs for a few days, and even hotel costs if you are down while traveling from home. If you travel a lot, or have a spouse that is rather “dead battery” prone, or don’t have a spare car to drive in the event yours has to go into the shop, that can really save you a good amount of grief.

This is entirely dependent on the price of gas and the model of Hummer, but at current prices you’re probably right. Still, you’ve got to ask yourself one question: “Do I feel lucky?” Well, do you pump often enough to amortize the hybrid premium? Also, think of the downsides: City folk shooting you dirty looks, hippies firebombing you, and the nightmare of parking that thing. On the other hand, you’ll be in far better shape to outrun that giant wave of water that will eventually engulf us, not to mention all of those hungry, displaced polar bears that precede it.

So here’s my solution for saving money while keeping a ride that’s big enough for showing off your 22 inch wheels: Used Hummer H2 + PhotoShopped TerraPass sticker to ward off naysayers, askance-lookers and tut-tutters. Only Ed Begley, Jr. will know the difference.

On average, the Civic Hybrid is about $3000 more than a similarly equipped Civic. You get a one-time tax credit of $2100 for buying one. The first 60,000 sold get that much, after that, less. They’ve sold a whole bunch more Priuses than Civic Hybrids, so the tax credit for a Prius is only $700.

So, will I save more than $900 in gas over 100,000 miles? I have a 50 mile commute every day, so I’m pretty sure I will. Hence the hybrid over the Hummer.

BTW, it looks like I’m going to wait at least a year for the extended warranty. Thanks, all.

Ah, my favorite part of car buying.

Before the sale: “You should buy this car, it’s incredibly reliable and you’ll never be in the shop.”

After the sale: “You should buy an extended warranty, you never know what will happen with this car.”

I just got a Ford Escape Hybrid, and went through the same thing.

We bought a Dodge Grand Caravan a couple of years back and when I heard extended warranty I heard ‘blah, blah, undercoat, blah’ and said no to everything. Then as we’ve needed service we have discovered every little hole in their coverage - and how when it comes to service their basic attitude is ‘no extended warranty? Then FUCK YOU!’

So we spent a fair amount of time going through the details and prices of things with the guy at the dealership and came to some pretty decent terms overall. Things that made sense based on my usage and mileage.

But as they say, it is all negotiable …

I’m on my 4th Honda currently. I’ve had two non-routine problems in over 15 years of Honda ownership. Both were covered due to factory recalls. My experience with them has been amazing.

I’ve never purchased their extended warranty, but I’ve also not owned one of their hybrids. Good choice on the Civic, one of the best cars anywhere for it’s price.

All personal experience I’ve had with car extended warranties is that they are a joke. I was at a dealership once and witnessed a service advisor telling someone that that the extended warranty didn’t cover a very expensive problem, which means they are not as inclusive as the regular warranty. My mother has bought them twice on used cars and been screwed over by the dealership on both occassions.

Sarkus: It depends on the extended warranty. By and large an extended warranty from the manufacturer will be rock solid, but an extended warranty from a third party is much more iffy.

Yesterday when I was getting the financing finalized, they faxed the P&S to my credit union and, lo and behold, the extended warranty was included!

When I left it with Marlon (the biz manager) I said I’d do some research and get back to him if I wanted it. I supposed this translated to, “I want it, unless I tell you otherwise.”

So I called Marlon, and I asked him if the warranty was good at any dealer. He said yes. So I said that meant that I could buy it at any dealer and he would honor it. This time it was a more wary yes. So then I said I had found it from a dealer in RI, 8 years, 120,000 miles for $940 and could he beat that?

He sputtered and said it must be a Memorial Day promotion, so I pulled it up again on the computer on the day after Memorial Day and said, “Nope. It’s still there. Oh yeah, and there’s no deductible. Can you beat that?”

He said he would “have to research that” and I gave him the website and told him to go there right now. He said he didn’t have internet access (which was a lie, as our salesman let us look up our insurance agency’s address while we were there).

I told him to take it off the bill.

Last night when I went in with the checks, I had to wait a half hour to do all the signing (I had my DS, so I didn’t give a flying fuck), and then Marlon wouldn’t let me into his office, he brought all the papers out into the public waiting area for me to sign.

I took this to mean that I had made a very good deal. When the biz manager treats you like shit, I figure it’s because he isn’t making enough money off of you.

Arise!!!

So it’s almost four years later and I wanted to get the latest thinking on extended warranties.

It’s almost three years to the day that I bought my 2007 S40 from the dealer, and I had to bring it in this week to get the radio fixed. I wanted to get it done before the three year anniversary because I had thought my warranty was good till then, but the guys at the dealership looked my car up on the computer and said that my warranty was actually good for four years, which means I’m covered till February 2012. Still, extended warranties are on my mind.

I see all these ads for third-party warranties, but I’m getting the sense that you should stick with your manufacturer and get the extended warranty from them.

So far, I’ve had to take my S40 in a couple of times (aside from regular 7,500 service). First was because the battery couldn’t hold a charge. Thankfully, it was the battery and not the charging system. And this week, because the radio chip had to be replaced. Still, nice to walk out of both situations not having to pay a dime.

I passed on an extended warranty offers on my last 2 cars, the amount of repairs they both required was less than $400 each after the 36k warrenty ended.

So in the long run I am still ahead.