Buy or not buy the ESP premium care plan

[Lewisra]

Do they include 1st day rental?

Peter

First day rental is $90 extra. In my case my dealer includes 1st day with any overnight repair.

 

[blwnsmoke]

With my 1st day rental, I get a car when I drop it off. Does not matter if it is staying overnight. I make an appt, drop it off at 8 am and take off in a rental.

If it the best option and I'd highly recommend the enhanced to rental so you can drive off in something other then a corolla or Nissan versa.

Also, when you compare esp pricing, make sure you compare feature for feature. The 1st day rental is standard with an ESP purchase so Joel quotes you with that option. All the discount sites remove that option and quote the cheapest possible price.

If you compare option for option, Joel is the cheapest.

 

[tmg19103]

Food for thought:

But breathe deep and think this through. A survey conducted by the Consumer Reports National Research Center in late 2013 found that 55 percent of owners who purchased an extended warranty hadn’t used it for repairs during the lifetime of the policy. And, on average, those who did use it spent hundreds more for the coverage than they saved in repair costs.

http://www.consumerreports.org/cro/...rth-buying-an-extended-car-warranty/index.htm

 

[wifes2011xlt]

Ever hear the phrase "the house always wins"? Kinda how I feel about extended warranties. Right or wrong, I just stay clear of them.

 

[blwnsmoke]

Food for thought:

But breathe deep and think this through. A survey conducted by the Consumer Reports National Research Center in late 2013 found that 55 percent of owners who purchased an extended warranty hadn’t used it for repairs during the lifetime of the policy. And, on average, those who did use it spent hundreds more for the coverage than they saved in repair costs.

http://www.consumerreports.org/cro/...rth-buying-an-extended-car-warranty/index.htm

They would not sell extended warrantees if they lost money overall. But for many, it is peace of mind. I don't like repair costs while making payments so I prefer to buy a warranty and be done with it. Once my vehicle is paid off, then repair costs are fine with me.

Also, you need to take into account what they are costing. I bet you when CR does this type of thing, they are using retail. When you can buy them at 40% off retail price then it is a lot easier to break even.

IF I make back 75% of my ESP, I call that a win for me because a rental car was included as well for each time I drop it off.

 

[tmg19103]

They would not sell extended warrantees if they lost money overall. But for many, it is peace of mind. I don't like repair costs while making payments so I prefer to buy a warranty and be done with it. Once my vehicle is paid off, then repair costs are fine with me.

Also, you need to take into account what they are costing. I bet you when CR does this type of thing, they are using retail. When you can buy them at 40% off retail price then it is a lot easier to break even.

IF I make back 75% of my ESP, I call that a win for me because a rental car was included as well for each time I drop it off.

I get it. My view is different because I always pay cash used for about 2.5 year old cars and never have payments, so a repair here or there is no biggie. Plus I have several cars for myself so a rental is not a concern. Knock on wood, but thankfully my past 4 vehicles would not have been worth getting an extended warranty. It's also easier to justify building it into a car payment.

 

[peterk9]

Food for thought:

But breathe deep and think this through. A survey conducted by the Consumer Reports National Research Center in late 2013 found that 55 percent of owners who purchased an extended warranty hadn’t used it for repairs during the lifetime of the policy. And, on average, those who did use it spent hundreds more for the coverage than they saved in repair costs.

http://www.consumerreports.org/cro/...rth-buying-an-extended-car-warranty/index.htm

I've had a total of 5 extended warranties through Toyota and Ford and the only claim was for a tire on a Highlander. Would I take out another on the next vehicle? Perhaps.
I look at it as a type of insurance that you may or may not need.
I also have had insurance for 42 years on the houses I lived in. Only had one minor claim. Would have been thousands of $$ ahead of the game with no insurance.

Peter

 

[tmg19103]

I've had a total of 5 extended warranties through Toyota and Ford and the only claim was for a tire on a Highlander. Would I take out another on the next vehicle? Perhaps.
I look at it as a type of insurance that you may or may not need.
I also have had insurance for 42 years on the houses I lived in. Only had one minor claim. Would have been thousands of $$ ahead of the game with no insurance.

Peter

Peter,

Have you ever owned a vehicle long enough to have the extended warranty kick in? I hope you have, but didn't you just have your previous Ex for a couple of years and hardly any miles? Won't that be the case when you trade your current MKT in for a Platinum Ex? Sorry, but that does not make any sense to me. I understand the insurance concept to a degree (though it is not the way I go and the comparison to complete loss insurance is not an equitable one) if you have the vehicle for 6 years, but that does not seem to be the case with you.

 

[peterk9]

Peter,

Have you ever owned a vehicle long enough to have the extended warranty kick in? I hope you have, but didn't you just have your previous Ex for a couple of years and hardly any of miles? Won't that be the case when you trade your current Merc in for a Platinum Ex? Sorry, but that does make any sense to me.

Your are correct in that the dealer took my 2011 Ex back after 3 years but I had a 4 year lease and took the 48 month ESP for that reason. I also had my Highlanders for 4 years so the ESP covered tehm for a year beyond the factory warranty. A friend of mine actually took over the lease on my 2009 Highlander with more than 2 years to go when I got the 2011 Ex. The extended warranty was part of the 'selling' point. The Lincoln has a factory 4 year warranty and my lease is only for 3 so I didn't buy an ESP for it.
Not sure what route I'll go if I get a 2018 Ex since it is a redesigned model. It also depends on what the dealer is asking for an ESP at that time. I know mine is negotiable.
Hey, it's only money. My financial advisor keeps telling me to spend it.

Peter

 

[Uaglio]

I've had a total of 5 extended warranties through Toyota and Ford and the only claim was for a tire on a Highlander. Would I take out another on the next vehicle? Perhaps.
I look at it as a type of insurance that you may or may not need.
I also have had insurance for 42 years on the houses I lived in. Only had one minor claim. Would have been thousands of $$ ahead of the game with no insurance.

Peter

You shouldn't look at it like insurance. You buy insurance to cover catastrophic risk (or at least financial risk that you can't afford). Your homeowner's premium is likely a tiny fraction of the value of your home, whereas the cost for an ESP is likely to be pretty darn near the expected cost of repairs over the life of the warranty. No one wants to be surprised by a $1,000 repair when not expected, but would you pay a $2,000 premium to cover $1,000 of risk? Homeowners on the other hand is a very good deal - you pay a few hundred or few thousand dollars a year to protect you against loss of hundreds of thousands, if not millions. It is unquestionably very well spent money to eliminate risk, regardless of whether you ever need to file a claim.

I've made a personal judgement that my expense over 8 years is likely to match or exceed my premium paid. Even if I fall short, how far off will I be - I paid about $1500 for an 8 year plan. If I incur $1,000 in repairs in the 3 years I own it out of warranty, I'm just $500 short on full recovery (aside from interest). I plan on keeping mine about 6 years, so I will have at least 2 years left when I sell. I also calculate that the additional resale price I can get when I sell with a comprehensive 2 year warranty will more than make up for any shortfall between premium paid and repair costs. (e.g., if I incur $1,000 in claims post-factory warranty, I just need to get $500 more for the car when I sell it to break even. That's easy.)

If you sell a car inside of the duration of the factory warranty, then an ESP is likely to have been a bad move.

 

[peterk9]

I understand what you're saying and fully expected a reply like that.
I lease all my vehicles so the only way to come out ahead is if the value of the vehicle is higher than the residual value in the contract. This has happened a couple times and the extra value was rolled into the next deal. BTW I only paid $1175 for the 48 month ESP on the Explorer. It's not like I'm strapped for $$.

Peter

 

[Uaglio]

I understand what you're saying and fully expected a reply like that.
I lease all my vehicles so the only way to come out ahead is if the value of the vehicle is higher than the residual value in the contract. This has happened a couple times and the extra value was rolled into the next deal. BTW I only paid $1175 for the 48 month ESP on the Explorer. It's not like I'm strapped for $$.

Peter

agreed that embedding an ESP definitely adds value because its transferable. You sound like the kind of person that takes very good care of their cars. So at lease-end you have additional value to leverage, provided you'd be technically prepared to buy the car out and then resell it to capture the value. Definitely a lot of different considerations (another is the quality of the coverage - Fords' highest level seems very good - other companies (e.g., my last Audi) disclaimed most of the electronics - the worst risk!)

Worst mistake people seem to make on these warranties seems to be falling victim to the dreaded hi-pressure post-sale add-on, buying it from a dealer at a huge mark-up, or rolling it into financing and not paying attention to what they've paid.