Mopar extended warranty - yea or nay?

[arx237]

Assume nothing will go wrong. Sound financial advice.

Home insurance? Are you stupid? If you think your home is going to suddenly (insert unlikely but possible catastrophe here) you should have bought a better home!

What a bunch of dumbasses. Here’s a motivational video from my trusty library of life lessons and wisdom The Simpsons.

I am not entirely sure you understood the question here.

Good rant though. I like the cliffhanger of expecting a video then BAM!...
nothing.

 

[60_Driver]

I am not entirely sure you understood the question here.

Good rant though. I like the cliffhanger of expecting a video then BAM!...
nothing.

I loved OG Simpsons, too. I was excited to see what clip was about to lead me to a financial and vehicular epiphany.

 

[60_Driver]

Rams come with an insurance policy in the form of a factory warranty. This, I had hoped, was just a spirited debate about buying a completely optional, voluntary, but costly EXTRA insurance.

But as others have pointed out to me, this should have been a simple yes, no, maybe vote and comments should have been turned off.

I legitimately appreciate the heavily biased opinions about buying or not buying extended warranties. We all want to beleive we made the right choice, that’s human and I get that.

I think there is a lot to be gained from hearing about others’ experiences here. I’d just appreciate it more if we could do it without taking unnecessary shots at people who don’t agree with us.

 

[JABAR357]

In 2013 I purchased the MAX Care Lifetime Unlimited Mileage insurance from Chrysler, FCA , Stellantis and found out they will not cover parts after 150K miles. I keep my vehicles in top notch condition and no less than 10 years. I bought aftermarket insurance for my other vehicles as well as my 2022 Ram. I can get the Vehicles serviced just about anywhere. I work for the Company and will never by the Factory Extended warranty again.

 

[Dave01]

In 2013 I purchased the MAX Care Lifetime Unlimited Mileage insurance from Chrysler, FCA , Stellantis and found out they will not cover parts after 150K miles. I keep my vehicles in top notch condition and no less than 10 years. I bought aftermarket insurance for my other vehicles as well as my 2022 Ram. I can get the Vehicles serviced just about anywhere. I work for the Company and will never by the Factory Extended warranty again.

So obviously I can talk to a dealer or go on the RAM website for the factory warranty details, but where is the best place to look at pricing and options on aftermarket insurance?

 

[ClawSS]

I like Ziegler for an idea of pricing.

 

[truckin-on]

My strategy is to ALWAYS buy the 8yr/100k transferrable MaxCare. The first thing that goes wrong with the truck will likely set you back more than the cost of the coverage. And it's a tremendous benefit if you sell the truck before the warranty runs out, as for a nominal price ($50?) the new owner can transfer the coverage and have the truck continue to be covered bumper-to-bumper. I usually try to sell the vehicle with ~1 yr left on the the coverage. This only works if you sell private, dealer trade-in can't transfer the warranty, so it has zero value then.

I've had it on my past two Rams, and on my Pacifica, and it's more than paid for itself on all the vehicles. You can't imagine the parts cost of some things. My truck had the radio/nav brick during an update - the part cost nearly $4000! But it was covered under the MaxCare.

 

[Dave01]

My strategy is to ALWAYS buy the 8yr/100k transferrable MaxCare. The first thing that goes wrong with the truck will likely set you back more than the cost of the coverage. And it's a tremendous benefit if you sell the truck before the warranty runs out, as for a nominal price ($50?) the new owner can transfer the coverage and have the truck continue to be covered bumper-to-bumper. I usually try to sell the vehicle with ~1 yr left on the the coverage. This only works if you sell private, dealer trade-in can't transfer the warranty, so it has zero value then.

I've had it on my past two Rams, and on my Pacifica, and it's more than paid for itself on all the vehicles. You can't imagine the parts cost of some things. My truck had the radio/nav brick during an update - the part cost nearly $4000! But it was covered under the MaxCare.

That won't work for me, I put 25-27K miles a year on.

 

[Pressure_welder]

I think this poll will vary hugely as everyone has their own scenerio when it comes to buying vehicles. Some purchase for a long term investment and will drive it for 10+ years or more so i could 100% see purchasing extended warranty. Some keep 2-3 years and move it within the factory warranty while the vehicle still maintains a high value, ext warranty would make zero sense. For me max i keep a truck is 3-3.5 yrs or at that 60-70,000km mark and trade on, completely different topic but when the numbers make sense we move it. If ram came out with a no charge diesel tomorrow id order a 23 and i havent even recieved my 22 5500 yet. We did however keep my wifes durango rt after lease and added ext warranty on it for obvious reasons. So many variables to consider!

 

[jebruns]

My strategy is to ALWAYS buy the 8yr/100k transferrable MaxCare. The first thing that goes wrong with the truck will likely set you back more than the cost of the coverage. And it's a tremendous benefit if you sell the truck before the warranty runs out, as for a nominal price ($50?) the new owner can transfer the coverage and have the truck continue to be covered bumper-to-bumper. I usually try to sell the vehicle with ~1 yr left on the the coverage. This only works if you sell private, dealer trade-in can't transfer the warranty, so it has zero value then.

I've had it on my past two Rams, and on my Pacifica, and it's more than paid for itself on all the vehicles. You can't imagine the parts cost of some things. My truck had the radio/nav brick during an update - the part cost nearly $4000! But it was covered under the MaxCare.

The extended warranty is not bumper-to-bumper. There are a LOT of things that 3/36 B2B warranty covers that the extended was does not. Not saying don't buy it. I have it on my truck also. But I think it's a common misconception that extends the B2B warranty when it actually does not.

Also, if you trade a truck prior to the extended warranty running out, you can get a partial refund.

 

[Riddick]

If you prefer dealers to perform all your maintenance then I think the extended warranty should definitely be considered. However, for the DIY individuals out there I really don't think the warranty is worth it. The majority of dealers look for anything and everything to deny your warranty claim. If the dealer did not do all of your maintenance you better make sure you have documentation that it was done and all approved oils, fluids and filters were used. Additionally, getting your vehicle into the dealer is a crap shoot, in most cases you have to wait 3-4 weeks just to get your vehicle looked at. Then it will take a few more weeks until they get the part and can get you back in to have the work done. With that said for big repairs I will take my vehicles in for warranty but if I can fix it in a day for a few dollars I will do the work myself.

 

[Docwagon1776]

I worked for an extended warranty company during my "real job" years. When you buy a warranty, you are paying for:

Actual cost of expected repairs per actuarial charts
Underwriter's costs
Underwriter's profits
Administrator's costs
Administrator's profits
Retailer's costs
Retailer's profits

Note that with some OEM warranties, underwriting and administration is done by the same entity, but not always.

Warranty companies often get better rates on repairs then "regular customers" do, so cost of repairs for you is often higher than for the warranty company. This is, again, dependent on the specific warranty and provider.

If you self-insure, you pay for:
Cost of repairs

Extended warranties are similar to slot machines. Long term, you will lose. The longer you play (more warranties you buy) the more sure you are to lose. Quite literally, slot machines may out more. Something like 97% of the money that goes in a slot comes back out of it, depending on what state you are in. Actuarial costs is usually about 10%-ish of the warranty cost, so some 90% of money that goes in that slot stays in the machine.

Only insure for losses that would be catastrophic. You get health insurance because the cost of a kidney transplant or cancer treatment is almost certainly well outside of your financial ability. You insure your house because losing your house and a good chunk of your wordly possessions is financially devastating, especially if you have a large debt on a now non-existent asset. If a transmission or uconnect screen is financially devastating to you, you probably need to evalute more about your finances than if you should buy a warranty.

So, in normal times I would strongly advise against buying any extended warranty. I would advise to put the money in a CD ladder or other safe investment and let it sit there to pay for any repairs that crop up. HOWEVER, with inflation the way it is now and likely in the future, buying a warranty at today's money to insure tomorrow repair costs does tilt the odds a bit more in the customer's favor again. Not enough for it to likely be a win, but better odds.

Finally, warranties are only as good as the company that backs them. If they fold up shop, your warranty is gone. If they play games and deny claims routinely, you've got to deal with that. I can tell you first hand that when a problem pops up that exceeds the actuarial expectations, some companies start pressuring administrators to deny claims on weaker and weaker grounds.

 

[Dave01]

Great post Docwagon.

As I said above, sometimes a factor in the warranty is peace of mind, which doesn't fit into an equation as well as other factors.

I was at a dealer for an oil change this morning, a young lady waiting as well. They came out and told her one of her headlights (I think LED) was out, the replacement was $319 because they had to remove a bunch of stuff to get at it (bumper?). She was shocked, I felt bad for her. Not sure if this would be covered under a warranty, I doubt it, but my bigger point is the way a big bill a few years in the future can affect someone. She held off on the fix so I hope someone at home can do it as I'd hate to see her driving around with 1 headlight.

Laddering CD's with the maybe $2,000 someone has by not buying a warranty .... line up 100 people, maybe 1 will do that, the rest will leave it in the checking account and possibly/probably spend it on .... life.

 

[Docwagon1776]

Great post Docwagon.

As I said above, sometimes a factor in the warranty is peace of mind, which doesn't fit into an equation as well as other factors.

I was at a dealer for an oil change this morning, a young lady waiting as well. They came out and told her one of her headlights (I think LED) was out, the replacement was $319 because they had to remove a bunch of stuff to get at it (bumper?). She was shocked, I felt bad for her. Not sure if this would be covered under a warranty, I doubt it, but my bigger point is the way a big bill a few years in the future can affect someone. She held off on the fix so I hope someone at home can do it as I'd hate to see her driving around with 1 headlight.

Laddering CD's with the maybe $2,000 someone has by not buying a warranty .... line up 100 people, maybe 1 will do that, the rest will leave it in the checking account and possibly/probably spend it on .... life.

Maybe. But that 1 in 100 has actual peace of mind, because nothing is peace of mind like ready cash. I don't need anyone's permission to do the repair, I don't have to fight with anyone about if the failure is covered, I don't have to only use certain mechanics, I don't have to use only certain parts, I can modify as I see fit, etc. If you (generic you, not you in particular) lack financial discipline and don't care to pay others to assume your risks, then warranty peace of mind is likely the best option remaining to you. If you're willing to be disciplined, you'll have more money and more peace of mind in the long run.


I've been poor, like living in a literal shack in the woods with no running water sort of poor, and I've been "affluent", as the marketing demographics label me. I prefer the second. I didn't get here by winning the lottery or by getting some exceptionally high paying job. I just didn't buy into keeping up with the Jones, especially when it came time to buy a home, wasting money on things that don't matter, etc. I lived a pretty ascetic lifestyle for a few years to get my feet under me, worked 3 jobs for awhile, busted my ass in other words, and now I can pay cash for my Power Wagon, travel abroad once or twice a year, and carry no debt other than my mortgage which makes no sense to pay off. All while raising a family on one salary and saving for an early retirement. Finacial knowledge and discipline are power.

So, again, everyone is in a different place, but my recommendation is still to avoid extended warranties. Learn to save, self insure, have more money long term.

 

[jetrinka]

How about an option for "didn't buy it and glad I didn't"

 

[techman]

Docwagon....

Thank you!

 

[60_Driver]

Maybe. But that 1 in 100 has actual peace of mind, because nothing is peace of mind like ready cash.

Great couple posts & perspective. Thank you!

 

[60_Driver]

How about an option for "didn't buy it and glad I didn't"

Good call. Just added it. The results will be a skewed as the vote closes in 2 days.

 

[jebruns]

Maybe. But that 1 in 100 has actual peace of mind, because nothing is peace of mind like ready cash. I don't need anyone's permission to do the repair, I don't have to fight with anyone about if the failure is covered, I don't have to only use certain mechanics, I don't have to use only certain parts, I can modify as I see fit, etc. If you (generic you, not you in particular) lack financial discipline and don't care to pay others to assume your risks, then warranty peace of mind is likely the best option remaining to you. If you're willing to be disciplined, you'll have more money and more peace of mind in the long run.


I've been poor, like living in a literal shack in the woods with no running water sort of poor, and I've been "affluent", as the marketing demographics label me. I prefer the second. I didn't get here by winning the lottery or by getting some exceptionally high paying job. I just didn't buy into keeping up with the Jones, especially when it came time to buy a home, wasting money on things that don't matter, etc. I lived a pretty ascetic lifestyle for a few years to get my feet under me, worked 3 jobs for awhile, busted my ass in other words, and now I can pay cash for my Power Wagon, travel abroad once or twice a year, and carry no debt other than my mortgage which makes no sense to pay off. All while raising a family on one salary and saving for an early retirement. Finacial knowledge and discipline are power.

So, again, everyone is in a different place, but my recommendation is still to avoid extended warranties. Learn to save, self insure, have more money long term.

Great story, and congrats. But just having money does not mean you shouldn't buy the extended warranty. I paid for my ext warranty on my new truck with cash. It is less than .001 percent of what my wife and I have accumulated over the years. Seemed like a small price to pay for the peace of mind. I can't modify the drivetrain even if I hadn't gotten it, since the Cummins has a 5 year/100K warranty on it anyway.

And implying that only 1 in 100 get use of the ext warranty is disingenuous, IMO. There is no question these are profit makers for the companies that sell them, but they do pay off for a lot of folks.

 

[Docwagon1776]

Great story, and congrats. But just having money does not mean you shouldn't buy the extended warranty. I paid for my ext warranty on my new truck with cash. It is less than .001 percent of what my wife and I have accumulated over the years. Seemed like a small price to pay for the peace of mind. I can't modify the drivetrain even if I hadn't gotten it, since the Cummins has a 5 year/100K warranty on it anyway.

And implying that only 1 in 100 get use of the ext warranty is disingenuous, IMO. There is no question these are profit makers for the companies that sell them, but they do pay off for a lot of folks.

Well, you're either fabulously wealthy, got a really fantastic deal on a warranty, or are bad at math. If you bought a warranty for $1000 and that represents .001 percent of your accumulated wealth, you have $100 million dollars.

The 1 in 100 was a reply to "only 1 in 100 will save the money" in the post I quoted. Expected pay outs were roughly 3-10% expected rate when I was in the industry. Remember slot machines pay out about 97%. Is that still 'peace of mind' for a non-catastrophic financial risk?

Do you also buy a 'home warranty' for all of your appliances, plumbing, HVAC, etc? Or do you accept those risks and self-insure?

I currently have 4 vehicles. I'm almost certainly to lose vs "the house" buying warranties for all of them. Long term, so is everyone else. It's expensive 'peace of mind' to bet the vehicle is going to have a covered failure between the end of the factory warranty and the end of the extended warranty, particularly if you have the discipline to save. Cash in the bank for any unexpected expense is true peace of mind over someone else covering a very specific risk at a low rate of return.