Why Extended Warranties Suck; Never Buy Them
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- Опубликовано: 18 мар 2017
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I got the extended Toyota plan for about $1500 and they have covered almost $4000 in repairs. Literally every repair I've needed has been covered.
But that's toyota so it's expected haha!
Probably the most famous extended warranty story is from RUclipsr Doug DeMuro. You can look up the video, I think he paid something like $3900 for a six year bumper to bumper warranty on a used Range Rover, they ended up paying over $10k in repairs within the first three years.
I've had the same experience with Hyunda and Nissan. I've come out on the plus side on all the extended warranties I've bought.
Thank you so much... If you're purchasing an older vehicle over 150k miles with an already expired warranty and they're staying you can purchase an extended warranty which covers drivetrain, electrical, routine maintenance, oil, tire rotation, balance, basically everything for 3 years I don't see how that's a bad idea when if it was purchased brand new it would cost 85k+ Sounds like a good deal to me
ToyotaCare rocks. This guy is a doofus.
I recently bought a car, and the whole experience was pretty painless until I got to their finance guy who tried to pitch the extended warranty. He had his own passive aggressive way of trying to make you feel dumb for not getting it, but I knew that statistically they were going to make more money on it than I would save, but thankfully I stuck to my guns. It still irritates me when I think about it though!
My Car Life WOW!!! I had the same experience! Good job with sticking to your guns
It has been said that the car dealer makes more money in the finance dept. than on the actual sale of the car.
I hate the whole car buying experience. I hate everything about it. Right up there with root canals and prostate exams.
My Car Life next time tell the finance guy at the very beginning that you are only buying the car. period. nothing more at all. tell him if he tries pitching any add on at all that you are walking. works every time.
Yep! I purchase a certifed used Accord. The price was good, but the Finance guy almost got me too. Lucky I got of if it.
I do what is in my best interest, I can not care any less whether the seller makes a profit off me. If I worried about someone making a profit off of me I'd go crazy and never buy anything.
worried about someone making a profit is a form of greed ... If no one made a profit no one would be in business
Its never in your best interest to buy an extended warranty for the same reason its always in the best interest of your seller to pitch one. Stuff like this is why I quit going to Best Buy.
@@scarpfish I never said it was in my best interest to buy an extended warranty. I said I do what's in my best interest.
True. My extended warranty covers a lot and I'm not confident enough to go to ghetto mechanics trying to save a few bucks when my extended warranty for me car literally covers bumper to bumper including tires! Idk maybe I'm dumb but its more convenient for me to repair at the dealer than anywhere else. Any other type of warranty I rarely pay for. I have a 2 year warranty for my Nintendo switch and nothing happened to it, so when I got my brother his switch, I didnt get the warranty
That doesn't justify throwing ones money away. I know what you're saying but it doesn't hold much weight.
I use to work at Best Buy and they would always tell me how I need to push these warranties. I never did.
I kept getting sold an extended warranty from a company I never even hrd of for my car. Never responded to them. They eventually went away.
I was the same way, I use to work in the Electronics and Appliance department at a Kmart, and they always told me to push for sale of warranties. I never would unless the customer absolutely wanted one.
GamerNRetro really? So the warrantys aren't even needed?!?
Yes, that is because you let the dealership sell your information (I don't blame you - they can be very demanding even threatening to not sell you the car if you refuse to sign). It's one of the forms they have you sign. They call it a information security or privacy form but it basically means they will sell every bit of information you supply them. It's not required to be signed, but most dealerships will force you to sign or they won't sell you the car. They will claim it is mandatory from the government to make sure no terrorist buys a vehicle. If you are insistent on not filling it out and they are invested in getting you the car, they will forget about the form, but I would say 99% of people get conned into filling it out.
I bought a $12 cheap wired keyboard and mouse from Best Buy the other day. They asked if I wanted an extended warranty for another $4.
It was $12!
When you try to use the warranty, they try to weasel out of it, or the condition is such a narrow set of circumstances that you probably won't qualify anyway.
Dwayne Green never once had this experience. Every time I need to use my warranty the dealer automatically uses it...this is on both of my vehicles--a GMC truck, and a Subaru.
Exactly. When you compound that "weaseling" issue for people who attempt to use them with the mathematical statistics showing how incredibly profitable (hence mostly unused by the buyer) these warranties are for the seller, you then have the "double whammy" reason why you should never buy the extended warranty.
my boss just told me he went through the same thing, He went to have his car fixed and the mechanic told him the warranty wont cover it. He said he spend more than an hour fighting with them over it and he had to pay out of pocket.
@@j.s.3414 Agreed I have had the experience ironically on the same manufactures lol
@@acool6401 i think i follow you but im not completely sure? can u break it down pls b4 i go buy this car today
We bought a Nissan Murano from CarMax a few years ago. I was hesitant to do it, but the wife convinced me to get the best warranty. (It was basically the same as having no “copay” and the 11 major systems were covered by CarMax.) Over the time we had that car, the A/C system failed at least 4 times and they took care of it completely, per the warranty. I know he’s speaking with respect to statistics and all that but there is also the psychological utility of having an extended warranty to consider; particularly when you purchase previously owned vehicles.
Agreed
The peace of mind of having is worth it in my humble opinion.
Trust me! You want to get an extended warranty on Nissan Altimas and Sentras because they are garbage when it comes to A/C systems and CVT Transmissions. I got horror stories from 2013 and 2014 after purchasing from two different Nissan dealers.
Well how much was your extended warranty? And How much was the AC fix? If you paid $1000 for the warranty and the AC fix cost $200, you would’ve been better off paying it for yourself. Not sure where you got ahead
@@abhishekhotti255 I don’t understand why you posted this, except to be asinine or argumentative. The assumptions you’re making are based on figures you fabricated. The reason I shared was because the cost of the extended warranty was significantly less than the multiple repair costs. It got to the point where our customer service experience at the shop suffered because they were tired of losing so much money honoring our warranty. If it was my experience that it wasn’t worth it, then I would’ve posted that.
I used to work at Best Buy and I was very good at selling "Service Plans" (warranties) on TV's and Computers. And I was the best in the region at selling Financing. A customer who was much smarter than me told me "selling TV's on credit is evil and you shouldn't do that" and I would say "no problem, I'm not forcing your hand; if you think you can't pay off this TV in its 18 months no-interest period, then please don't finance it" (trying to play to his ego). That sentence sold him the financing and proves why I was the best at it…
.
Boy has my mindset changed since then (I was 19 and that was ten years ago), thanks partly to Dave Ramsey! The same tactics I used back then to sell financing were the same "lies" I told myself while racking up credit card debt over the next several years. Never again!
I once bought a stuffed bear at Toys R Us. Yes they tried to sell me a warranty.
Well, those toddlers can be pretty rough on stuffed animals, and such.😂
😂😂😂😂😂😂😂
What car repair cost only $200????? U can't get out of a dealership for less then $500
You are absolutely right. Apower window repair is $750 dollars an engine is 5K this guy is giving bad advice on this one.
Who charges a window repair for 750??? Do it yourself for less than 400.
What snacks cost only $2?????? U can't get out of a *MOVIE THEATER* for less than $7!!! (says the idiot who goes to the movie theater to stock up on snacks for home). Check out your local NAPA/OReillys/Autozone and ask some DIYers (customers who you will find in those places, generally work on minor stuff themselves and so they know when a shop is being unreasonable) for some really dependable shops in the area. I can guarantee someone will know a local shop in the area who will do just as good as the dealership for a fraction of the cost. And in some cases, well...One shop owned by a national chain told me "you need an air cabin filter replacement" I looked at the invoice: they wanted 75 for the job (20 for labor and 55 for the part). Problem? I changed it myself about 2 months ago, the part cost $8 and the job took about 5 minutes for a young-ish woman with no car tools!
That being said, if I had an engine or a transmission go out...that would not be something that I would feel comfortable DIYing...and if I was buying a used part, I would invest in an extended warranty if one was available. STILL WOULDN'T GO TO A DEALER!--signed, the gal who bought a used CVT transmission from Automotix with a extended warranty and had a Mr. Transmission with good reviews install it. Cost me a little over 2K.
A tire plug maybe? hahahaha
I am an hvac repairman, I always tell people to get the extended warranty, because I have seen it pay off over and over again. And no, I do not get a dime in commission.
Probably bc you would be out of a job without the warranty companies
Thank you Dave for sharing this with everyone.
I self insure. I take $100/month for the first years to cover any repairs. Then I add $25/month from then on. By the time you need money for a repair you have thousands in that account. If you never need it you can use it as a down payment on your next vehicle.
When a salesperson pressures me to buy an extended warranty, I always ask them "Are you selling me a piece of junk that I NEED an extended warranty? I'm sorry, maybe I should look elsewhere." That typically shuts them up.
I have used the warranty from Lowe's on some big ticket items and I am quite pleased with it.
Many, many years ago, I went to buy a portable CD player (yes, a long time ago). It was about $30. The kind of thing that if it lasts a year I would have thought I had gotten my money's worth. The salesperson helping me went into a big speech in how I needed to protect my "investment." The warranty cost more than the CD player!
A boombox!!!
who the hell buys a warranty that costs more than the item
They lie to you when you buy it. They say everything covered but when something does break they find a fine print to deny the claim.
I had a Ford warranty that covered the engine, blew one cylinder by having a spark plug blow through it, dealership said yes that is covered but because the sparkplug caused the issue then that is not covered. Good luck...
wow thats some bs. still like them fords?? betcha u drive a tundra lol.
You also have to look how much actual time and mileage the extended warrantee adds. Is it from the time original warrantee expires or from when the car was new. That was a trick the Dodge dealership tried to pull on me.
A lot of factors come into play with car warranties. I would only purchase from the manufacturer backed warranty not 3rd party. It also depends on the dealership and service advisor you take your car to. The warranty I have covers a lot but getting the approval for the work to done could be a problem. The techs don’t like to do warranty work because it does not pay well so they will hit you with the excuse your car is fine can’t find the issue.
I have been told this from the service advisor I used at Honda. He fought for me a few times when work needed to be done because the techs kept saying everything is fine. My service advisor would get in the car himself and tell them that’s BS how don’t you feel that weird shifting and he would go to the service manager.
So a lot of issues come in to play with extended warranties. I got about $1200 worth of works done the car so far. Just has my starter replaced yesterday no charge.
I used to work for a mid-level retailer and we were pressured to sell extended warranties as well. They told us it added value for the customer, yeah right! This was mainly on outdoor power equipment and tools. First, I can nearly guarantee the employee trying to sell you it wouldn't buy it himself. I, nor any of my fellow employees ever bought them. If the product did break, it was usually outside the extended warranty. When the customer called to get work done on, say, a lawn mower, the company holding the warranty would send them to Timbuktu repair shop who would do a shoddy job or just give them the run around.
Paid $2,000-$2,500 on an extended warranty on a Dodge 1500. The driveshaft dislodged itself at 65MPH and tore into my axle housing. The extended warranty covered every bit of the $6,500 service bill. That’s a savings of $4000+ dollars.
Be wise with what you are going to invest into, including extended warranties. SOME, not all, are worth their investment.
I have never bought a car extended warranty until I bought a 2022 Dodge ram 1500
Was it within the standard warranty time or the extended warranty time?
@@Sylvershade Extended warranty time.
Dodge’s always have electrical issues. After 2, I no longer purchase that make.
I used to work for a construction company, and the boss used to buy extended warranties on his pickups. That would be the only time it actually seemed reasonable for it (we used to pull trailers and building supplies and tools) it was worth it when we had to put a new transmission in a 2 year old truck. I wouldnt buy it on a personal vehicle though
Awesome videos..Always learn from your content.....Thank You!!
Had an extended warranty and they replaced an ac evaporator but would not pay for a receiver dryer and expansion valve stating those were maintenance items and are not allowed. I had a second claim for a broken CV shaft, the warranty company said that the CV shaft was covered under my manufacturer’s power train warranty, I had to fax a page from my owners manual to convince them that CV shafts are covered under the extended warranty, they finally agreed. I’ll never buy an extended warranty again.
I agree 100%. They wouldn't be pushing them hard if they lost money. It's pretty rare that something fails anymore and if it does it's within the factory warranty (or outside of the extended warranty).
Shout out to my Honda finance guy! We battle about warranties for 2 and 1/2 hours and he was offering me a warranty they offer their employees and I still said no.
If you battled for 2 1/2 hours and got nothing in the end YOU lost! 2 1/2 hrs? You kidding me??
I got limited lifetime warranties on my engine, powertrain and transmission with my purchase. As long as I show proof of continuous routine maintenance I'm good.
It's a 14' Honda Civic used. I bought it for 16k with only 12.5k miles on it. Clean title. It was a steal!!! I considered getting an 3rd party insurance once I hit 100k. But these cars can last well beyond that.
Robert James thing is with powertrain warranties they cover only the internals and such. If the fluids are kept changed and you don't beat on it, those will usually outlast the car itself. And limited probably means it pays for less and less as the drivetrain gets more miles so that $2000 repair that may be covered in full today will only be covered for $100 a few years from now.
Robert Bell If that's true. That is depressing.
2.5 hours. how about 2.5 seconds of nnnoooooooo. cants get that time of your life back
Dave is very right about these extended warranties. Over the course of my adult life, now exceeding 50 years, I am so far ahead by not buying warranties on anything, that I can afford to sustain a big total loss on some big ticket item, and still be way ahead. I tend to keep vehicles for a decade or more. Dave is also right that, if you can't afford to save $50-$100 a month for maintenance of a car, you can't afford to own a car. What you are doing by buying an extended warranty, is allowing a middleman to insert himself into your life and pump money out of your pocket.
One time we actually used a Sams Club 3-year extended warranty THREE times for the life of a desktop
BUT
It took around a MONTH for it to get fixed each time! One year after we got it, HP told us there was a problem with the motherboard and offered their own extended 1-year warranty. Within a year, our computer stopped working and HP took their sweet time replacing the board.
A year later, same problem again! This time Sams Club fixed it, and they also took a month to fix it. Next year...
AGAIN.
Yes we got our money's worth out of the warranty, but taking 3 total months of computer usage was not worth it!
Back then I could've spent just as much having a private computer shop fix it with a better model motherboard, not to mention I know how to replace it myself now.
Warranties guaranty peace of mind but that was furthest emotion from my mind during all that!
Bought a dodge journey in 2015. Paid $3000 for the lifetime warranty... they have covered over $20,000 in repairs over the last 8 years... once again, Dave is not in touch with reality because he has money in the bank to just go buy a new one... MOST of us DONT!
You’re literally a one in a million scenario.
Most new car warranties cover a car for about three years. After that time, there should be sufficient wrecked cars to pull parts off of. For this strategy, it is best to buy common cars where there would be a fair supply of wrecked cars, and knowledgeable mechanics to work on them. Also, less expensive common cars tend to have less expensive replacement parts if you purchase the parts new.
Great video and informative!
I am on baby step 1 and I just paid off my first chunk of credit which was a $3,000 loan from my brother. Guess what it was for? It was to rebuild an engine on a 2016 Camaro because one of the Pistons cracked out of warranty at 66,000 miles. I laughed when he said $180. I know my situation is not the norm but to rebuild my engine Chevrolet quoted me $9,000. So I just ended up doing it myself with a buddy over the course of 2 months which consumed all of my time for those two months and still cost me $3, 000. now I will admit there's a lot of things I could have done to completely avoid that situation but at the end of the day I was only 6000 miles past the point where they would have rebuilt it under warranty and if I had an extended warranty I would have never had to do it myself.
You're caught up doing silly stuff.
I remember hearing a story about my grandfather, that he was asked if he wanted to purchase the extended warranty for the product. He asked them if it was a good product, they said the best. He then said well why do I need the extended warranty? He didn't buy the warranty, He was on the Ramsey plan before Dave was born...
Wth is the Ramsey Plan?
@@kzukiodenthechad7205 The video you are watching.
Excellent video. Explained perfectly. Thank you sir 🙏
I spent 1500 on a warranty for my subaru. If you factor in the interest it's more like 2000 and there is STILL a 100 deductible when you have anything repaired.
warranties sucks ,I paid 7 years extended warranty on my car and I have leaking and they say now is no cover with the warranty .....what ? yeap u pay warranty and a the end is no cover for nothing ....same happened with my PS4 and my old TV no more warranties for me naaaaa
Tony MTA yeah, I stopped buying warranties for this reason - I have never ever had one paid out for anything. "oh that's a manufacturing fault you'll have to contact the manufacturers yourself and they should fix it for free", "oh we don't cover that exact problem that you're having".
always go with a FACTORY warranty thru whoever makes the car...not some third party company ..they usually deny every claim.
ture @working Shlub
Yeah, I stopped buying warranties based on the probability alone. The only time it a warranty actually worked out was 5 years ago when my Geek Squad warranty was still valid for another month. BY A MONTH. I paid $100 for an $800 flat screen. Sweet deal, right? Yep. But I basically lucked out. Warranties are generally a waste of money. What's $1000 gonna Matter after a year?
Tony MTA seals and gaskets or leaks is going go be wear and tear unless u buy the warranty when the car has less than 50k on it. people need to do research. I have one and less than a year already paid 1k. I still have r gears if cov and my payments are 99 a month. only have 12 more to go.
In my case the extended warrantee paid off when I had a Garmin GPS system that kept breaking down every 6 months or so. I had it replaced for free 4 or 5 times.
Not really for free if you paid for the extended warranty
I bought a 2015 Jeep Wrangler that had 110,000 on it in 2018. Yes, 110,000 were put on it in 3 years and it was not a rental car, an individual owned it. I bought a 3 year, 36,000 mile bumper to bumper warranty and it paid for itself in 5 months. Now, a year and a half after I bought it I have had $9,350 worth of repairs done and I paid $1,900 for the warranty. It did work for me.
I'll have to disagree with you sir. I use to think like you, I bought a $2000 TV from BestBuy and I passed on the extended warranty, eighteen months later the tv stopped working. The manufacturer warranty was only for 12 month. The extended warranty would of been $350 for 5 years. I've been quoted $529 to have it fixed. And remember there's no guaranty it won't break again. So, for now I have the most expensive paper weight. Live and learn.
I bought squaretrade warranty for my $1000 laptop purchase. It's was about 18% of the purchase price. 2 year accident plan with a $70 deductible. I did it, because a cup of coffee on a motherboard usually means bye be computer and it usually never works the same again. In hinds sight though, I probably wouldn't do it again. I sell my phones and laptops about 2 years after they're new since after that, the depreciation drops like a rock.
Love your videos!
About 30 years ago, a friend of mine bought an extended warranty on the conversion van he bought. He tried to make a few yeats later and he got burned. The warranty was not issued by General Motors, but a third party warrantor. The warrantor went out of business and my friend had zero coverage.
30 years ago......lol
Great advice. Thank you
I agree with Dave on this. For new items that already have a limited warranty, I never buy an extended warranty and I feel I have come out way ahead over the years. Instead of getting an extended warranty, keep that money in the bank, and make a separate column in your checkbook or savings account to reserve that money for future repairs. It adds up after a while for each item you don't get an extended warranty on. You'll have quite a sum saved and that money doesn't expire like a warranty. If you need a repair, take if from that fund. If you don't need a repair your fund keeps growing and you get to keep that money.
Do you know what that “limited” coverage means ? It means it covers defects only. Defects typically happen within the first year of a vehicles life. So anything after a year is most likely due to wear and tear and those limited manufacture and limited power trains warranty’s it comes with only covers defects. So you basically have no coverage after a year
When do any manufacture warranty really help when we have problems , esp tv purchase if it breaks down ¿ that’s why we have to resort to buy ext warranty right ¿
I used to work at Best Buy, and yes he’s 100 spot on!
My personal philosophy is to only buy insurance on the things you cannot afford to lose. Having fire insurance on a house would definitely be one given that buying a home is typically a one-time purchase until retirement. Meanwhile, buying extended warranty on a humidifier (which I almost did) would be pointless. Plus you have to deal with the warranty people when something breaks and many times they say "sorry, that's not covered."
Extended warranties usually cover things that don't break. Lol or will cover something for 2 years when the average time of it breaking is 2.5 years. Usually you find that things end up breaking right after the warranty is up. Or for cars in the fine print they say that they don't cover things that are average maintenance and only cover things that you hardly ever replace. Such as break pads not being covered etc. I saved $2000 because my dad is a mechanic and explained this to me before I bought.
Extended warranties on major appliances make sense though. It may be about 10% of the cost of the appliance itself, however, if something goes wrong, it pays for itself. You're also paying for peace-of-mind. Think of extended warranty on appliances as insurance. Of course you expect the insurance company to make money because not everyone who buys insurance will use it. But it's shared risk. For example, a $3000 fridge warrantied for 5 years is $299. Now, imagine worse case scenerio, your fridge has to be replaced within the 5 years... Do you have another $3000 handy? That would be catastrophic to your finances. However, $299 for peace-of-mind, may be a worthwhile investment.
I bought a $2.00 extended warranty on a juicer for an extra 3 years past the manufacturers warranty and it blew up after the 1 year mark so it paid off.
I've boughten those too, I mean for an extra $2 .. why not.
I bought a 2011 Jeep Patriot warranty for `$800 probably saved thousands over the seven years, including transmission rebuild (5M), linkage, and suspension work,etc.
I used to work as a service adviser in a car dealership, and from my experience the warranty isn't worth the paper they are written on, it seemed for every twenty people that came in with extended warranties, only one persons repairs would actually be covered.
Bought one with my Nissan and it covered the transmission and replament of both seats saved me about 5k
You probably worked for a shitty dealership
I get a LOT of Auto Warranty scammers calling me on the phone.
1. I'm on the Do Not Call List
2. They're ALL Scammers.
I generally waste five minutes of their time, give wrong Credit Card numbers, and THEN tell them they don't know who their Daddy is-and hang up. But-today-I bought an air horn from the sporting goods store, and Blasted Ole "Demetrius" on the phone.
Dave hasn't seen any videos of Doug DeMuro's CarMax Range Rover. He bought a 2006 Range Rover at CarMax in 2012. It cost 26k and the warranty was 4k. It was a 6 year 60000 mile bumper to bumper warranty, and by the time the warranty was up, it paid out around 16k which means CarMax lost 12k on the warranty and paid out well over what the vehicle was worth at the end which topped out around 9k. This happened because he bought a notoriously unreliable vehicle that was expensive to repair and for some reason the warranty was being sold at an absolute steal. He was getting a 6 year old Range Rover with a 6 year warranty, meaning that it would still be covered at 12 years old and around 120000 miles, and that the vehicle never had a warranty for that long before. Not when it was brand new, and not when it was certified pre-owned. Not hard to connect the dots and have a pretty good idea that the warranty is going to pay out more than what it cost to buy.
This doesn't mean that you should always get a CarMax warranty though. If you're getting a reliable used car like a Honda or Toyota, it is probably unnecessary. But if you're buying an unreliable luxury car like a Range Rover, then it's probably worth considering.
BMW= BUY MORE WARRANTY!
Dimitry M the worst mechanical experience I have ever had!
I’m looking to buy extended BMW warranty, do you know where I should buy the warranty and what kind do you suggest? thanks
LK systemization sell that bimmer not matter what warranty you get it only covers leaks from the engine or transmission, check engine light and maybe some other few things. Not worth it for someone that needs to save money. If you have a lot of money then go for it. I buy them cheap, enjoy them then sell them for more and I know how to work on them so I save $ at the end.
BMW= Break My Wallet
@@MyNobleThoughts get a carmax bumper to bumper warranty, it will cover anything. Just ask Doug DeMuro
This Gentleman spoken the truth. God bless you. People need to be smarten up
That sounds great on paper but he’s using averages . When it happens to you it’s not the same in the real world . Wait till your transmission goes after the manufacturers warranty . See if it costs 187 . You will be on the hook for three times the cost of the warranty
I had an extended warranty i paid for, not financed on my honda. I had a total replacement of the power steering system and a window motor. It worked out for me. Paid $1500 and the bill for parts and labor was $2900
Thank you Dave!
I was hassled over and over to get glass coverage for my auto policy. I worked out it is about $200 a year extra. I straight up said to the guy "look, replacing a windshield is about $200. Do you really think I will need to replace the windshield more often then once a year" he still tries to convince me to get it. Then it's auto club membership, about $300 a year. "Look man, that's the price of THREE tows a year. In the last 15 years of owning cars I have had to get a tow maybe 5 times. That's NINE times more cost effective to just PAY for the tows." Even IF free replacement tires came with the membership, which they don't, it still wouldn't be worth it.
good point lol, i'm going to go look through my glass coverage now too
rustyscrapper Glass coverage is usually with comprehensive coverage which covers theft and vandalism. So look into that further.
It's because glass and you could math. Nice job! Oh, and have a great New Year Bro.
I did not get the extended warranty on my last toyota Corolla and it went 7 years without a single promblem. It was totaled while parked so I just got another newer one and now I was questioning myself about it since the finance guy kind of made me worried. I asked him if they sold me junk (the car only 2 years old) He said no, I'm not saying that. I refused.. I put away some money just incase.
Well my extended warranty for my used pick up was $2300. 6 month after I bought it the ac when out which was $1800 when they replaced it then the door handle came off with parts and labor came out to $400 (they have to replace all 4) then the ac broke again and they installed a brand new system which came out to $1900. I'm still only in the second year of the 4 year warranty. Bottom line warranty on used cars is very much needed
Same Kid fully agree, without a warranty protection do not drive it, especially BMW Mercedes.
Statistically, no. Not worth it. There are examples it’ll be worth it tho
I am going to assume you have a GM.
I agree for a used car.
I purchase a extended warranty and I’m so happy I did. I paid $6000. for three years warranty. One month after purchasing the vehicle I had to get over $10,000. Of work done. I would recommend warranties if you are buying a use car. Especially BMW, Mercedes-Benz any type of foreign used car.
Damnit I just accepted a sales position at Best Buy...I think I'm too ethical to be salesman..
lol...you are not a salesman at BB you are a clerk.
Some people feel better knowing they have a warranty. They are not finance wizards, but don't feel bad for selling something that gives your customer a piece of mind.
I KNOW I AM
Almost 13 years ago my husband and I were buying a Ford escape and the finance guy kept trying to push us to get the extended warranty on the car. We kept telling him no. Finally my husband had to raise his voice and the guy finally stopped pushing. It's insane.
I got tricked into one of these for my used car because I didn't read...they never used the word warranty. I'm still mad because I would be done paying it off were it not for the warranty
T. Ayech not having used a warranty doesn't mean not having the need to use it. Most people buy warranties without fully understanding its concept, much less knowing what's covered. If more people were aware of what's covered more people would use them
I disagree. I just used the extended warranty I bought for $40 on my TV three years ago when it died last month. I got a $1000 cheque, bought a $500 new 4G TV and went on vacation with the rest!!!
There’s always an exception. You came out good, but most other people don’t. It’s like winning money on a scratch off. Most lose money, few ever win money. So why would you buy one in the first place if statistically you will lose money?
Smart phones on average are about $800-$1,000. New car tires $300-$500. Electronics about $800-$1,000. Car accident deductible is $500. Emergencies don't have to be emergencies if you already have the money for them. DR's starter Emergency Fund of $1,000 should cover most of these life emergencies.
Purchased a extended warranty from Cadillac for a 2015 Escalade bought the car with 93K miles and added 3yrs/36K miles of additional coverage with the Platinum warranty . Cost was around 4K. Bought the car in 12/18 and what do you know the front struts and motor on the driver side running board have all gone bad . Dealer told me without the warranty my price to fix all this was $2500 dollars but since I had the warranty I had to pay $100 dollars . I'm glad I got the warranty I'm already $2500 in in repairs on a $4000 warranty and I still got 30,000 miles of driving left to do on the warranty .
I've purchased an extended warranty once, on a fridge I purchased. The fridge was like $500 and the warranty was $40 or $50. Not a horrible deal and the only reason I even went with it was because any more appliances are made to brake. At the time I figured that there is probably like a 20% chance of the fridge breaking with something and 10% added cost wasn't to bad. I did end up having to use it (don't remember what for) but saying that. I don't buy them any more. The cost to savings seemed to work out at the time, I think it was one of those VERY few times that they under estimated the costs/profit margin.
I paid 800 for an aftermarket warranty. Just one of the repairs. Was $850. Dont listen to this guy. Do your own research.
Nick Krenn where did you buy from ?
@@markb8670 Mercury.
You can always do your research and see which products are the most durable
Thanks for been here for us
When I bought a car, the guy put the screws to me for 30 minutes to buy the extended warranty. The longer I put it off the more the price came down. In the end I would not buy it because I Googled the name of the company that was selling it and they had terrible reviews. I don't think I need it anyway.
Im cancelling my home warranty today. My a/c went out in the middle of July the company they gave me was out of business. And it took 4 days to finally get someone out here. The other problem is they out band aids on things instead of really fixing them. Been spending $60 a month that's money spent elsewhere.
We wound up getting a car with a real bad transmission and our ford extended warranty paid out 6 times just do some research on what your buying you might need that warranty!
I worked at Best Buy for 8 years and we were forced to push the greatly overpriced Service Plans. Employees were expected to buy them for our own purchases and gifts that we gave to others. Not a huge problem because we never had to pay the retail price. Back then BBY employee pricing was cost + 10%. We could get a $160 laptop Service Plan for under $20.00, and sometimes Management would lower the price by the cost of the service plan. I once got a SP for a vacuum for under $4.00. Customers would have paid $40.00.
This pricing also applies to Cables. The markup is nearly 1000% on all cables and accessories.
About Best Buy,
That is not true...
1. At Best Buy, extended warranties are not so that a comission could be made to the Sales Consultant. No one in Best Buy is on comission.
2. Phone cases, unless are rechargable battery covers, there is no extended warranty offered (which 95% of covers are not to recharge a battery).
I love your video Dave and you have really helped me grow financially but please make sure what you said has been fact checked.
God bless sir!
I almost always get the extended warranty on electronic items at Best Buy and appliances at Sears. It seems like most electronics have about a two year lifespan. I have used it on Kindle (twice), wireless headset, other items. At Best Buy, at the end of two years, I usually end up with an upgrade to the original because rarely is the same item available two years later. Verizon insurance on my phone pays off too because phones are made so cheaply. My car extended warranty has already paid for itself.
I completely agree. If you look at the data and numbers regarding the failure rate of consumer electronics it is extremely high. BestBuy actually quit offering extended warranties beyond two years so that tells you a lot right there.
Should start making better life decisions bruh
i`ve never been burnt on an extended warranty, bought a canon printer and it crapped itself on the last day of the extended warranty and they replaced it with 12months warranty on top of the new one
bought a lg tv with 3yr warranty and then bought an extra 4yrs extended warranty, it crapped itself 3 times within the extended warranty period and was fixed each time
bought a sony bravia recently with the same deal as the lg and the dealer will replace it with a new one within the warranty exteded period so i`ll always go with the extended warraty
I live in australia so maybe this is a US thing
EDIT if we`re talking cars then its run with the warranty on the car but the dealership I used (main not used) will offer a warranty at no extra cost, provided you keep using them, for the life of the vehicle. After the warranty runs out I just use my local repair shop that is part of family so I kow I won't get dicked around
My inherited GE washing machine (top loader) has lasted almost forty years. When I did a load a few months ago, there was a bunch of water on the floor. I babysat the thing, and, sure enough, it spilled a waterfall soon after starting the cycle. The repairman said that the outer tub was rusted through: "Buy a NEW one." I can afford a washer, but it p*sses me off that they have this planned obsolescence. If that tub was made of stainless-or even galvanized-steel, this would NOT have happened. Plastic tubs can pick up odors. I bought some tools and will try and do a tub-job myself, if ever get around to it.
Warranties are a waste of money unless you you have a problem and can't afford to fix it. If you are the one with the problem, then the warranty is a good idea.
I never buy an extended warranty because they only cover the first months or years you own the thing which is when it’s new and not likely to break. I need the warranty for when the thing is older and more likely to break. Since the extended warranty never covers the thing when it is more likely to break, it never seemed like a good idea to me anyway. So I never get one. Dave, with me, you are preaching to the choir 😀
We bought a Bissel carpet cleaner about 20 years ago and paid extra for a lifetime warranty. Two years ago it broke. We had kept all the paperwork and proof of purchase. We took it back and claimed a new one. After a few days to verify all our paperwork we got a call and took delivery of a brand new carpet cleaner. Not all warranties are worth it for sure,but some are. I'd go with a car manufacturers extended warranty most of the time, far less so with household appliances that are pretty cheap to replace from cash.
except apple. buy apple warranty. i took my MacBook pro in at end of the 3 year warranty and they repaired more stuff than the cost of the warranty with fast turnaround. new panel due to 1 pixel gone, new battery, new speakers
That's because it's 3 years old lol
Thats because you waaaay over paid in the first place. U could have gotten 2-3 comparable non-apple comp for the same price n still had a new one each year.
I typically never buy extended warranties. The exception is the tire damage warranty because I typically have to replace at least one tire per set over the years so I come out ahead. The other exception being the full no questions asked replacement warranty for $10 or $20 at Best Buy for personal electronic items that I know will live a hard life... ie mp3 players I use for exercise. Every one I've bought had been used and they give you the purchase price as a gift card, which allows you to upgrade to better tech at the same price due to technical cost lowering over time. That works for me.
Glad I saw this, before returning the item and repurchasing to add the warranty!
i have extended warranty on my used truck from dealer i came ahead i won dealer lost . i paid 3500 for extended warranty i gained 6000 from my extended warranty.
Just bought a new Toyota Corolla. Finance office was trying to make me feel stupid for not purchasing the extended warranty professing that new cars have over 600 computer chips and thousands of moving parts. I simply said : I trust the product, I'm good.
I had an extended warranty on a used car that wound up having a lot of issues. I had my engine and transmission replaced by that warranty. My dad also has a Jeep that they sold with a lifetime warranty and they’ve more than made up their money. We’ve made up our money on warranties and more so. And for me, that extra is worth the “just in case.” But just because Ive had good experiences, my anecdotal evidence doesn’t mean they’re a good idea in general
I agree with Dave with regards to the math. But in my case I am facing a $7500 engine replacement charge on a car that 90,000 miles on it.
Exactly I’m being quoted 4500 just to get to the water pump..but you have to take apart the engine mines well fix other stuff while there!
Thank you for this straight Forward answer about extended warranties
Paid $2000 for an extended warranty. After the new car warranty expired I had to have a shift solenoid changed out. The shift solenoid was about $200 but the labor to put it in was over $2,000. And that was not the only repairs I've had to have on that vehicle. It paid for itself about two times over. Had a truck that I also bought a warranty on. The warranty company spent over $13,000 repairing that vehicle after the manufacturer's warranty. I live by them. Think about how much money you spend in regular car insurance. If you don't get into a wreck is it a waste of money? Is a warranty the same thing? It's either an assessed risk or Peace of mind? If you have to use it you'll be glad you had it, especially with today's cars with all the electronics, sensors, touch screens and more.
Not sure if my situation is relatable, but I own a forestry company and bought a ford raptor in 2013, I purchased a $5000 Endurance 10 year unlimited mile warranty with a $300 deductible when the truck was brand new online. Since then I had blown 2 engines, bottomed out my suspension 3 times, and put 250,000 miles mostly off-road on it. Best financial decision I had ever made. Then again, I did buy the warranty because I knew the truck was going to be driven fast off-road and abused. Best thing about extended warranty is that unlike insurance, your premiums will never go up, and the company cannot cancel your policy unless they go out of business.
I Worked at Sears over 6 years ago. I bought a $3500 display fridge for $1600 spent $500 for a Repair agreement. Get the fridge delivered and it has a leak. Call service, they say it need to be replaced. Get a brand new $3500 fridge. Sometimes it just pays to get it. The problem with advice is it isn't black and white. I'd hate to know what would have happened if I didn't get the repair agreement. Yes I have been burned before, but in the long run I've come out ahead.
I bought a $60 extended service plan for my wife's engagement ring and now the $500 setting is getting replaced free. Seems worth it to me in this case.
Dantastic they are going to steal the diamond and give you a fake and look at magnifying glasses
Extended warranties are a gamble, sometimes they pay off sometimes they don't. I've had extended warranties that ended up saving me a lot of money and I've had some that I never needed and were a waste of money.
sometimes they benefit just not on cars many can repair themselves just as many homeowners do their own repairs
That’s the only time I’ve paid for one, but it was a life time deal. Includes free re-sizing and cleaning for the ring as well.
Exactly. It’s like any insurance, it’s worth it when you need to use it, and if you never have to use it, that’s great too
I got an extended warranty on my latest television. The sale's guy was so desperate to sell me the TV, he included the extended warranty for free. No problem, this was like eight 8 years ago. I bought this TV from Best Buy in Canada, eh. I never "buy" an extended warranty. Just bought a new laptop, I dropped the old one and broke it. They offered me an extended warranty. I asked, "Does it cover when I drop it on a concrete floor?" Of course not and I politely declined, eh.
At the company I worked for they made 82% return on the extended warranties.
So I work at a certain store that requieres the sales associates to pitch the extended warranty on almost everything. Fear is a helluva motivator, let me tell you. These items don't break, they're built like tanks mostly. That "what if this happens" mentality is what gets them every time. One time I pitched it to someone and they immediately said no, so i said "ah, so you watched that Dave Ramsey video too?" but apparently they didn't get the joke. If it breaks, it breaks, buy a new one.
Well, it was my good luck charm. We bought a 2012 GMC Yukon in dec. 2017, the engine gave up in June. Paid my $200 deductible and got a new 6.2 v8 in our ride. If not for the warranty.....woulda been around 10k. Pays off sometimes. Just saying
I agree; however, I believe his point is that if you purchase the extended warranty on every car you ever own, the statistical probability that multiple engines would blow up in your lifetime is low to NIL. Statistically, over the course of 70 years you'll own a vehicle, the dealership still comes out ahead. Or to put it another way, if you buy 20 televisions in your lifetime and you buy the extended warranty every time, even if a TV is replaced by those warranties 1, 2, even 3 or more times, Best Buy still charged you far more during your life than they paid out in replacement.
Warrenties ain't for everyone.
Some are like paying for repairs in advance.
I always make out with mine because I'll always need a Warrenty.
Especially for my tools
Obviously you'll need a warranty if your buying GMC
@@robertomartinez-martinez5668 really
@@smw372002able no im just playing but get a toyota or honda if its to be financially secured, less maintance and more reliable and all out cheaper
Dave really like your show, however I have to disagree on a vsa for a car. It is not a bad idea to put a $1500 warranty for a 8year 120k on a 40k car. Shop rate is 120 an hour, if you have to replace a starter in 8 years your 70% there plus any electrical issue that goes with it
Have you ever actually tried to use that warranty for something as hard to diagnose as electrical? Assuming it's a dealership (hence the outrageous 120/hr), they aren't actually paying their staff a lot for warranty work (ask the insiders). Sooooo, what makes you think a young-ish guy who is paid a flat rate (meaning he gets paid for half an hour to do a diagnostic regardless of whether it takes 5 minutes or an hour) is going to take take the time to figure out what wire/connector/part is actually loose/clogged/weak/dead/etc? And assuming that you get that angelic technician who is willing to take an hour to figure out a problem that he only gets paid 30 minutes to figure out.....and do that job at "warranty work" prices *cough* Oh come on, you know that he's going to try to upsell you something you don't need right away, so that he can at least get a real job from the fake one you just gave him! It's better to pay the technicians rather than the uncaring corporate company selling a warranty. You WILL get better work.
Starter is easy to replace of you have any mechanical skills. Even a local mobile mechanic will do much cheaper than any dealer.
The only warranty I opted for at best buy was 2 years for 6 bucks on a decent pair of headphones because I go through them every couple of months. They get snagged on stuff all the time at work and the sound goes out.
Doug DeMuro says one of his favorite cars is a Range Rover. He bought it from car max bc he could buy an extended warranty. It cost him 3,600 but replaced 20k of parts.
Recently, I did the same thing but they increased the price to 10k. Still bought it for the peace of mind, plus, I really do expect to use it on the air suspension which is 8k and will wear out.
Edit: warranty is 6 years for 125k mikes and is bumper to bumper with 0 deductible.
I used to work at Staples and they always talked about these. They were so unethical and the 3rd party companies as the extended warrenty didn't really do anything to begin with.. So disgusting!. One of the reasons why I quit.. Not to mention "Think of each customer as money with legs walking in the door". Nasty!