[pro10is]

Buying an extended car warranty is always a gamble. You may use it and save a lot of money, or you may lose a lot of money on the premium. It all depends on chance.

Vehicle warranties are a highly profitable business for car manufacturers and other sellers. They are like any insurance policy, the price and terms are very carefully designed to ensure that the business is very profitable. This means that more people will lose money on them than they pay out. Just be sure to know that going in. Eyes wide open.

Pros:

• They can save you significant money if a major component such as an engine or transmission needs major work or replacement.
• They can save you money if a great deal of minor repairs are necessary over the course of the policy term.
• They can give you some peace of mind, even if they don't ever pay out. This is why a lot of people buy and like them.
• Warranties may be prorated, so if the vehicle is sold or totaled before the policy term is over, you will receive some of your premium back.

Cons:

• Routine maintenance is not usually covered. This rules out any return on them.
• The extended warranty business model requires that significantly more people must lose money on extended warranties than those who profit. This should not be surprising to anyone, this is how all insurance policies work. Insurance companies aren't in business to protect you, they're in business to make a lot of money. This informs you that your chances of profiting from one are not very good.
• You're basically pre-paying for future car repairs. The sum of these repairs must exceed the premium before you'll profit a dime. If this doesn't happen within the term limits, you may lose significant money which was exactly what you were trying to avoid by buying an extended warranty.
• If you put the same money aside and keep it invested, you probably won't have any significant financial problems if a major repair is needed, and if you're reasonably fortunate, you may save a lot over paying the premium if you don't need expensive repairs.
• The term limits protect you only when the vehicle is relatively new. You get no protection when you need it the most - when the vehicle is older or at high mileage. Once the policy term is over, you're back on your own.
• You're paying a lot of money to insure relatively very little money. For example, you may pay $3000 for a premium to insure the loss of about only $3000 - $6000 over the course of 3-5 years. Health, automobile, or home insurance protects you from the loss of hundreds of thousands or even a million or more for about the same overall costs in many cases. So, vehicle extended warranty policies are very expensive for relatively very little protection.

Most people will brag or mention that they love extended warranties online if they profit from one but few if any will mention online that they lost money. So know the facts and make up your own mind based upon your criteria.

If you get significant peace of mind from an extended warranty policy and can deal with the loss if you don't profit from it, then you should consider it. Also, consider it if your car has been troublesome, has a poor reliability reputation, or you use it in severe conditions such as off-road or heavy towing, or you don't take proper care of it.

Otherwise, consider just taking your chances in life as we all must do for virtually everything. You can't insure everything in your life from any and all financial loss and you shouldn't even try otherwise you'd be buying an insurance policy for everything, lol. When you buy any form of insurance always balance the cost against the risk to determine if an insurance policy is worth it.

 

[pro10is]

100000/10 yr for under $2000 zero deduct which covers many wear parts is substantially better than what you describe. Your overall analysis is correct. In my cae i am getting 7 yrs of added protection.

That is a very good price. Most extended warranties now range in the $3K or more territory.

 

[pro10is]

Extended Service Contracts are insurance...

That's exactly what I said:

They are like any insurance policy...

..the cost of just replacing one major component should there be a failure can easily exceed the cost of the contract these days with parts cost and labor...

That's also what I said:

They can save you significant money if a major component such as an engine or transmission needs major work or replacement.

The difference is that I also included the cons as well as the pros which also need to be carefully considered and weighed. It's only fair to consider both. Don't just list the pros without the cons, and there are significant cons.

 

[pro10is]

This was the subaru gold plus. It simply takes a bit of calling around. Plenty of forum posters have paid around this price (others did not know it was negotiable or did not wish to bother).

As I said, that is a decent price. However, the facts remain the same. Subaru or any other extended warranty seller is not in business to pay you more money than you pay them. The premium price will be carefully set to ensure that the seller makes a considerable profit which means significantly more people will lose money on them than will profit.

If you're ok with that and feel the pros outweigh the cons, then by all means do what you feel is best.

Again, I'm simply trying to provide all the information for people to make up their own minds.

 

[pro10is]

Except you said if you put that money aside and had a significant repair you'd be fine. I'd consider a significant repair to be $2k or more. In one repair you can be out that cash and not covered for the future.... positive returns on investment included.

It's fair to list just positives. Also, routine maintenance not included isn't a con, the alternative option does not include it either.

It's never fair to list only the pros without the cons. That is one-sided and incomplete. You might as well be an insurance salesman if you do that.

People need to know that routine maintenance is usually not included in case they thought it was a justification for spending the premium.

I didn't say someone would be "fine" putting money aside, that's simply another option worth considering and another gamble. People can both profit and lose money doing either.

Look folks, the OP asked for info about extended warranties. I'm quite certain he wanted the cons as well as the pros. He specifically titled the thread "Get an Extended Warranty or Not?". Every time I list the cons in threads like this, people who already purchased an extended warranty get upset and start criticizing me for doing so. Well sorry, there are cons, and anyone considering an extended warranty should carefully weigh both sides, not just blindly listen to anyone listing only the pros.

 

[pro10is]

Disclaimer, I don't have the extended warranty on my Ascent.

I'm not saying listing the cons is bad, its fine. It's good info. However, listing something as a con that is irrelevant to the service is in my opinion muddying the water.

I'm looking at instrument insurance for my son's string bass. Is it a con that the insurance doesn't include free tuning? Of course not, because it's irrelevant to the purchase of insurance.

Similar, when I had the yearly service plan on my HVAC at home it INCLUDES routine service, however it was not an extended warranty. Is that a con? Of course not, it's not an extended warranty plan.

You may think it's not a con that routine maintenance is not included, but I and probably many others would. That's just a personal opinion. I only included it for completeness, interpret it however you wish.

Personally, I would be much more inclined to purchase an extended warranty if I were more certain that I could use it and get at least some of my money back.

 

[pro10is]

You can cancel the gold plus plan anytime and get a pro rated refund.

Yes, I know that but there's not much point in buying a policy and then canceling it if I still own the car unless I decided that I made a bad decision to begin with. Pro-rated refunds are never great and usually in the issuer's favor. I would never want to rely on that as an exit plan. The longer you hold a policy, the more likely you'll need it, bailing out early is probably not a good strategy.

If I wanted to sell the car, I would need to determine if I could get more money selling it with the warranty as opposed to taking the pro-rated refund and selling it for less.

 

[pro10is]

Ir is a wonderful feature if and when you sell the vehicle or if is totaled.

You're right, so in all fairness, I'll edit my post and list it as a pro.

 

[pro10is]

OMG!! Such an abundance of information!! After reading all the input since I plan to sell my 2019, hopefully within the year and only having 30,000 miles on the vehicle, I'm having the tendency to NOT buy the extended warranty. However, is the vehicle unreliable (a reason maybe I should get the warranty?) I did have the battery replaced at 12,000 miles and the 2019 Ascent is listed on Consumer Reports list of not recommended used vehicles. I also had gasoline pouring out in line at the Costco gas pumps but that was due to a bad gasket the dealer installed on the fuel pump recall. Is 3 recalls in 3 years unreliable? If I were a guy, I'd probably know the answers to all this stuff. Thanks everyone for your input! I've learned a lot more about extended warranties. Now just need to make a decision. 😒

Personally, I don't think it's wise to purchase an extended warranty if you plan on selling the car within this year. Unless you have very major issues in the next few months, it's unlikely you will ever profit from it.

The battery is not a major concern nor is it a serious reliability issue. The solution to the Ascent battery issue is simply to replace it with a better aftermarket battery rather than another OEM one. Subaru has even been paying for aftermarket battery replacements.

Consumer Report's reliability rating for the Ascent has been much discussed here. Many believe it's inaccurate and unfair. See these posts for more information.

The gasket problem was a dealer induced issue and not related to the car's reliability.

Recalls should not be considered reliability issues. A recall means that the manufacturer has identified an issue and is assuming full responsibility for fixing it. Additionally, you may have received a letter from Subaru extending the warranty on your 2019 Ascent transmission to 100,000 miles. I did. That's one less major component to worry about.

 

[pro10is]

I think it's a no brainer to buy the extended warranty given the complexity of the vehicle and the thus far known issues that have arisen. The 2019 model year in particular has poor reliability ratings. As far as buying the extended warranty "this late into owning a 2019", all you really did was delay incurring the expense of the extended portion of the warranty until when it will actually be in effect, unless the price of the additional term of the warranty coverage is more expensive now than it would have been had you purchased the extended term when you bought the vehicle.

I've had zero issues that I could have used on an extended warranty with my 2019 Ascent that I purchased in September of 2018. The car has been highly reliable and runs like new. Based on this excellent performance, I expect no major issues with it until the time or mileage limits of an extended warranty would expire.

So, if I had purchased an extended warranty, I would be well on my way to losing every penny I paid for it. A lot of people will lose most or their entire investment on an extended warranty. Subaru knew that when they sold it even if the buyer didn't. It's also a no-brainer for Subaru to sell extended warranties.

 

[pro10is]

I feel compelled to say that a vehicle Extended Service Contract really isn't an investment. It's insurance. I've not had a claim on my homeowners insurance in over ten years and about the same on my auto insurance. That's probably in the neighborhood of $40+K in that time frame combined. That's really the choice here. Some folks want insurance. And yes, it may not actually pay out. Then again, it might. The nature of the beast.

I agree, "investment" was a very poor choice of words indeed. It is certainly no investment or an extremely poor and risky one.

I also feel compelled to again say that while your homeowner's, automobile, and health insurance can protect you from an unexpected loss of hundreds of thousands to over a million dollars, an extended warranty only protects you from the loss of a few thousand dollars at most. Something most anyone can afford. So you end up paying well over a thousand or more in an attempt to try to protect a few thousand.

We all need homeowners, automobile, and health insurance to ensure we don't go bankrupt. No one needs an extended warranty for that. A high-cost auto repair is simply a rare inconvenience.

Homeowner's, automobile, and health insurance are comparatively far more worth it and a much better buy, a bargain in fact, compared to extended warranties. Dollar for dollar, extended warranties are some of the worst insurance policies in terms of payback that anyone can purchase.

 

[pro10is]

risk aversion cost/benefit is an individual calculation

True enough. How wisely we use whatever limited money we earn over the course of our lifetime will ultimately determine whether we are poor, financially stable, or wealthy. That's why we all should carefully consider anything such as this and always strive to understand and weigh all the pros and cons. Then we can all decide for ourselves.

 

[pro10is]

packout said:
risk aversion cost/benefit is an individual calculation

^^ This....

I agree, which is why I listed both the pros and cons.

 

[pro10is]

One must also consider the fact that the Gold plus plan at 10/100000 extends 7 years past the original warranty, covers additional wear items and it extends 5 years 40,000 miles for the powertrain warranty...

Yes and no. The powertrain is where the most expensive problems can occur. Five extra years sounds nice but only an additional 40,000 miles is simply not enough for most people. Years rarely kill a powertrain, but milage sure can. The average US driver will accumulate around 143,000 miles in 10 years which is a lot more than the extended warranty covers. Half will accumulate even more miles. Therefore, the average driver's extended warranty will expire at around 7 years, not 10, even sooner for the half that drives more than average. If they drive less than average, they'll get more years of coverage, but are considerably less likely to need it. It's a catch 22 heavily in favor of the insurer. To get the full ten years, you must not drive more than 10,000 miles per year. At that low mileage, you're not as likely to need it. If you find an extended warranty with more than 100,000 miles on it, they usually then cut the years. I won't even go into the deductible options. This should inform you that there definitely is a well-researched actuary formula at work here.

This is the magic sauce that makes extended warranties highly profitable to the seller. They're absolutely certain that with their cleverly designed and highly researched term restrictions, premiums, and deductibles, they will profit significantly from them, which means that most buyers will lose money. This fact cannot be ignored. The odds are ever in their favor. Sure, some buyers will profit and say things like it was definitely worth it. However, the majority that lose money on them won't ever say a word.

I'm not against extended warranties, it might interest some to know that I own one for my 2021 RAM (but I got it for free). I'm glad I have it but I don't think I would have profited from it if I purchased it because it also covers only 100,000 miles. Drivetrains these days can easily go over 100,000 miles without any significant problems if properly cared for. My 13 year old 2010 Forester has over 180,000 miles and has never had any issues that I could have used with an extended warranty. Just brakes and exhaust. I had wheel bearings wear out, but that was well after 100,000 miles. Even then, it cost me only a few hundred.

I'm quite certain that with the mileage I now have on my Ascent, if I had bought an extended warranty for it, I would have most likely lost money on it after it expired. And then when I needed it the most, which is after 100,000 miles, it would be gone and I'd be back on my own.

Again, I'm not against extended warranties at all, I've listed all of both the pros and cons I know about them after very careful and thorough research and decades of experience. And, unlike some others here, I'm not going to tell you about only the good without mentioning the bad. Anyone considering one deserves to know as much about them as possible before deciding and go into it eyes wide open knowing all the facts. If you then decide to buy one, then win or lose, at least you made a highly informed decision.

 

[pro10is]

Eh? That isn't quite right...

I'm pretty sure a new transmission is WELL beyond that price, and multiple claims can far exceed "a couple thousand dollars"

I said a few thousand dollars. That will cover the cost of a new transmission which is around $1,800 to $3,700 unless you're getting ripped off. This does not even include the "secret warranty" that Subaru and other manufacturers often kick in when a transmission goes before 100,000 miles. They'll often kick in half and sometimes cover all of it.

If you have multiple major expenses with any car, then you have a lemon. This is rare. It's never happened to me in the 45 years I've been buying vehicles. It can happen and it does, but I don't think it's a valid justification to purchase an extended warrenty. Most people would sell a car before incurring more than one or two major repairs.

You're cherry-picking my words now and ignoring the big picture.

 

[pro10is]

It's very

I'm not sure that number washes...I've heard as high as $6K for the transmission for the Ascent if out of warranty.

That would be a rip-off. Research the cost of a transmission replacement online.

 

[pro10is]

I think it's very odd that my comments are being cherry-picked and challenged (mostly by those who own and/or favor an extended warranty), yet no one but me is challenging those who are recommending extended warranties without mentioning any of the considerable downsides. What's up with that? Aren't forum discussions ideally supposed to be well balanced?

I listed both the pros and cons, no one else did.

Go back and read this entire thread and tell me if you think it would be a balanced, fair, and fully informed assessment to the OP or anyone else concerning extended warranties without any of my comments.

 

[pro10is]

I agree with Jim below and for engines, depending on which crate if needed, it can be substantially more. in any case, this is all about individual choice based on the information they have reviewed at the time of decision. Not all multiple repairs qualify for lemon. We have had multiple posters note their challenges with different issues on their units. Lemon maybe in the most common understanding, but not lemon in the legal sense and hense outside of any compensation without warranty coverage.

If you or anyone else here disagrees with my list of extended warranty pros and cons, then please list your own set of them. Just be fair and complete about it and list both.

 

[pro10is]

too much in the weeds. Most readers will have already gotten the points made.

The cherry-picking is the part that's in the weeds. The big picture is about the overall pros and cons, or to quote the OP's thread title "Get an Extended Warranty or Not?". This is what this thread should be about.

If anyone doesn't agree with my list of pros and cons, then instead of picking at mine, please go back to the original question and fairly list your own for the sake of completeness and fairness to the OP and others who are interested. Thank you.

 

[pro10is]

It wasn't cherry picking. Stating the warranty only protects from a few thousand in repairs is pretty false. It actually protects from unlimited costs in repairs (unless fine print says otherwise).

Like noted earlier by many, it is a gamble if you will actually leverage and use it, but the protection is most certainly there if/when you need it.

If this were a discussion about the home or car "warranty" scam calls, sure. But this is pretty dang close to extending your factory bumper-to-bumper warranty, which is drastically different and offers a LOT more than what I think is being given credit.

And we're right back into the weeds. Yes, you're cherry-picking and looking for any possible implausible flaw in any of my comments in an attempt to invalidate all of them. That doesn't work, it's called reductio ad absurdum, look it up. Any single argument does not invalidate the overall assessment much if at all. You need to address everything I said or at least the majority of it to invalidate it.

For the vast majority of people, the warranty is designed to protect you from the loss of a few thousand dollars, not an "unlimited" amount. It would be an extremely worst-case and extremely rare scenario for it to cover much more, and then you can bet the warranty denials might start and/or your warranty might be dropped just as many insurance companies might do when they think you're a very bad risk. Anyone expecting more than a few thousand dollars of protection from these warranties is likely being unrealistic. I would estimate that after $5-6K of coverage and/or one major repair, you're likely to start getting some major pushback and a lot of investigation. As most people know, there are a lot of ways they can challenge or deny excessive coverage.

Despite any single, individual argument with any of my specific points, none of you have yet to disprove my overall assessment. Just picking at one or two things I've listed doesn't matter much if at all. And once again, I've listed both the pros and cons. Oddly, no one seems to have a problem with any of the pros I listed, and they covered most of the counterpoints made.

Again, this thread is not about me or you, it's about the OP's question. Please list your own pros and cons if you don't like mine. Just be fair and complete.