I just bought a certified 2013 Volt that came with a 12,000 mile, 1 year bumper to bumper warranty and passed on the option to extend it to 6 years for an additional $2,500. Assuming I still can, do you think I should purchase the extension? It has 38k on it now and also has 100,000 mile power train warranty. The 6 year bumper to bumper extension would go to 125,000 miles.
countach711
The first question would be who is providing the service plan. GM? Ally? Some other entity?
You might want to contact another dealer and get a second quote. Any dealer can sell a GM service plan and most can also sell you a GMPP plan. There are a lot of options, one of which might work better for you than others.
You might want to contact another dealer and get a second quote. Any dealer can sell a GM service plan and most can also sell you a GMPP plan. There are a lot of options, one of which might work better for you than others.
For that price, probably not. Mine came with a GMPP extended through 111K from the original owner. She included documentation of her original purchase and it was about 1/2 what you were offered at. $2500 can take care of a LOT of problems that aren't already going to be covered through the voltec and powertrain warranties.
I bought an extended warranty on my 2013 for about the same price - perhaps a little less - it is a zero deductible warranty through Zurich (purchased at the dealership at the same time as purchasing the vehicle). I have already had repairs at 68,000 miles that have recovered around 1/2 of what I have paid for the warranty, and still have another 20,000 miles to go under warranty as the vehicle is currently at 80,000 miles on the ODO. I consider the cost of the warranty worth it for the piece of mind and it truly was a hassle free process when it came time to use the warranty. Others will likely disagree and say put the money in the bank instead for a rainy day car fund, but it is an individual choice.
Financially speaking, no. Money wasted.
If you want the warm & fuzzy, go ahead. If you do, only go with the GM warranty, ignore third party warranties as they often lead to dispute issues, etc.
If you want the warm & fuzzy, go ahead. If you do, only go with the GM warranty, ignore third party warranties as they often lead to dispute issues, etc.
Extended warranties are such a crapshoot. You are basically betting you will incur at least $X,xxx in repairs not covered under other warranties. So you are hoping your car breaks down so that you get your money's worth from shelling out the extended warranty money.
I relate cashing in on an extended warranty you paid for to the feeling of when you win some stuffed animal from a crane game. Feel great right at the moment it drops into the prize bin, then are left with an empty feeling, going "......great, now what do I do with this piece of crap I'll never use?".
I relate cashing in on an extended warranty you paid for to the feeling of when you win some stuffed animal from a crane game. Feel great right at the moment it drops into the prize bin, then are left with an empty feeling, going "......great, now what do I do with this piece of crap I'll never use?".
Extended warranties, financing, and leasing are the dealer's biggest money makers. Put the cash in the back, add to it monthly and if a repair needs to happen, you've got the cash for it. And whatever you decide don't compound things to make it worse by financing your extended warranty.
The whole purpose of warranties are to mathematically make money because cars fail at a lower rate than you are paying. Just watch, if you don't get a warranty, there will be dozens of companies calling and mailing you fliers with your last opportunity to extend your warranty. If you happen to talk to one on the phone, they are almost as bad as collection agencies in trying to take your money. That alone is reason to run.
The whole purpose of warranties are to mathematically make money because cars fail at a lower rate than you are paying. Just watch, if you don't get a warranty, there will be dozens of companies calling and mailing you fliers with your last opportunity to extend your warranty. If you happen to talk to one on the phone, they are almost as bad as collection agencies in trying to take your money. That alone is reason to run.
When I think about extended warranties, I think about how the warranty has to be priced based on the following factors (this is what I am paying for):
1) The expected cost of covered repairs, on average, for this kind of vehicle.
2) The administrative overhead of the company that underwrites the warranty and processes the claims (basically a share of the salaries of everyone who works at the company, etc.).
3) A profit margin for this company in addition to the above.
The sum of those 3 things is the price of the warranty. But only the wholesale cost. So add these things:
4) The dealership that sells it to you has to mark it up to make it a profitable product for them to sell.
5) The individual salesman gets a commission to motivate him to badger you into buying it.
Those last two items might double the wholesale cost of the warranty.
Out of those 5 things, only item 1 directly benefits me. And that thing might be just a small fraction of the total price I am paying.
So for me, it makes sense to decline the warranty and invest the money instead.
But obviously that is a risk, because a couple of major covered repairs could pay for the warranty. On average, that will not happen to the typical owner, but it could happen to any individual. So you have to be willing to take the risk. But I believe that while that might happen to me once, it probably will not happen to me every time I buy a car. So if I put the $2500 in an investment account every time I buy a car throughout my life, then I should still be ahead in the end even if some of my cars are lemons.
Another factor is that I happen to take very good care of my cars. I drive them gently, maintain them well and keep them in like new condition, even after many years. Some people seem to have consistent terrible luck with cars and turn them into beaters much more quickly. Maybe a warranty makes more sense for people who have "bad luck" with cars.
One final note about extended warranties: My sister was once talked into an extended warranty on a Honda that she was buying. She bought it at the dealership at the same time as the car. Years went by and then the car's timing belt broke, so she tried to make a claim. What she discovered was that the company behind the warranty had since gone out of business, so she was just flat out of luck. Money thrown away. I had a similar thing happen to me on an piece of consumer electronics bought at Circuit City. Extended warranties do not completely eliminate risk.
1) The expected cost of covered repairs, on average, for this kind of vehicle.
2) The administrative overhead of the company that underwrites the warranty and processes the claims (basically a share of the salaries of everyone who works at the company, etc.).
3) A profit margin for this company in addition to the above.
The sum of those 3 things is the price of the warranty. But only the wholesale cost. So add these things:
4) The dealership that sells it to you has to mark it up to make it a profitable product for them to sell.
5) The individual salesman gets a commission to motivate him to badger you into buying it.
Those last two items might double the wholesale cost of the warranty.
Out of those 5 things, only item 1 directly benefits me. And that thing might be just a small fraction of the total price I am paying.
So for me, it makes sense to decline the warranty and invest the money instead.
But obviously that is a risk, because a couple of major covered repairs could pay for the warranty. On average, that will not happen to the typical owner, but it could happen to any individual. So you have to be willing to take the risk. But I believe that while that might happen to me once, it probably will not happen to me every time I buy a car. So if I put the $2500 in an investment account every time I buy a car throughout my life, then I should still be ahead in the end even if some of my cars are lemons.
Another factor is that I happen to take very good care of my cars. I drive them gently, maintain them well and keep them in like new condition, even after many years. Some people seem to have consistent terrible luck with cars and turn them into beaters much more quickly. Maybe a warranty makes more sense for people who have "bad luck" with cars.
One final note about extended warranties: My sister was once talked into an extended warranty on a Honda that she was buying. She bought it at the dealership at the same time as the car. Years went by and then the car's timing belt broke, so she tried to make a claim. What she discovered was that the company behind the warranty had since gone out of business, so she was just flat out of luck. Money thrown away. I had a similar thing happen to me on an piece of consumer electronics bought at Circuit City. Extended warranties do not completely eliminate risk.
I hate fighting claims with warranty companies/contracts. Put equivalent cash aside; nobody disputes cash.
On a side note: I was particularly annoyed that the finance guy at the GM Dealership tried to wiggle in an extended warranty by misleading me. Fortunately my wife caught the clause and we had it struck off before we incurred any extra charges in the sale. Grr.
On a side note: I was particularly annoyed that the finance guy at the GM Dealership tried to wiggle in an extended warranty by misleading me. Fortunately my wife caught the clause and we had it struck off before we incurred any extra charges in the sale. Grr.
Insurance policies only make sense for low probability catastrophic events. You buy home owners insurance because the annual premium is manageable but the cost of replacing your house if it burns down isn't, the fact that you are likely never to collect anything near the amount you pay in premiums isn't an issue, you would rather your house didn't burn down in the first place but if it does you will be able to replace it. You don't buy oil change insurance because the probability of changing your oil is unity so insurance would just raise your costs while providing no benefit. Extended warranties are much closer to the oil change model then the fire insurance model. When cars age they breakdown, it's a certainty. Extended warranties are priced to cover those costs plus a substantial profit. Over the course of your life you will generally come out ahead if you never buy extended warranties. On any individual car you might lose but in the long term you win by not buying extended warranties. When a car reaches the point where the repair costs become excessive it's time for a new car, most extended warranties will have run out by that time anyway so they don't help.
Since its past 36k miles you can't get a GMPP but only some other 3rd party warranty which is probably not as good.
Hi all,
I am waiting for my 2017 Volt. I agreed to buy the bumper-to-bumper extended warranty (GM warranty). Now after reading all your comments I am confused. I financed the warranty as well. It will cost me $26 biweekly for 7 years or $4732 total. Because this car has too many electronic components I am worried that things can go wrong easily. Am I worrying too much? Since I did not get the car yet I think I can go back and cancel the warranty. The battery comes with 6 year warranty.
Thanks,
Sam
I am waiting for my 2017 Volt. I agreed to buy the bumper-to-bumper extended warranty (GM warranty). Now after reading all your comments I am confused. I financed the warranty as well. It will cost me $26 biweekly for 7 years or $4732 total. Because this car has too many electronic components I am worried that things can go wrong easily. Am I worrying too much? Since I did not get the car yet I think I can go back and cancel the warranty. The battery comes with 6 year warranty.
Thanks,
Sam
thanks for all the reply's, it sounds like my first instinct was the right one, to pass. I'm a bit of a gambler anyway and with 38k already on the clock I figure most of the major stuff that could have happened probably already has. I assume the batteries are covered by the drive train portion of the warranty?
The battery/drive warranty covers a lot. And it's most of the expensive stuff including computers that run the drivetrain.
I probably wouldn't buy an extended warranty on a $15k car for $2.5k. I did buy one once on a Chevy that I knew had brake issues. All issues covered under warranty a year later for much less than I paid. However, in general, I don't buy extended warranties especially when they are over 10% of the price of the item I want covered. I sure as heck don't pay interest on them.
Homeowner's warranty on a house is crap. Trying to get service is a PITA. And then they try to repair a 10-yr-old appliance rather than replacing it.
Just budget for repairs. It's cheaper in the long run usually.
I probably wouldn't buy an extended warranty on a $15k car for $2.5k. I did buy one once on a Chevy that I knew had brake issues. All issues covered under warranty a year later for much less than I paid. However, in general, I don't buy extended warranties especially when they are over 10% of the price of the item I want covered. I sure as heck don't pay interest on them.
Homeowner's warranty on a house is crap. Trying to get service is a PITA. And then they try to repair a 10-yr-old appliance rather than replacing it.
Just budget for repairs. It's cheaper in the long run usually.
We purchased a GM extended warranty for our 2014 Volt. We said no to the salesman at first, and he quickly offered the same warranty for several hundred dollars less. I think we paid $2200. Two weeks later, our Volt had serious electrical problems. We dropped it off at a dealership and they kept it for two weeks, having to contact Ford to get help figuring our how to remove and replace a module of some sort. They had one trained Volt mechanic, but this was beyond his ability. If this had happened today, and we had not purchased the warranty, I could imagine the cost being well over $2000 for the repairs.
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