2001diesel

I have an 07 6.7 chassis that had a faulty turbo and some faulty emissions parts. This bill was 5500 for dodge to replace these parts. Needless to say I bought the extended warranty because I do not want to pay that after 36,000 miles. These new trucks are reliable but if anything goes wrong they are expensive to fix.

packard8

I'll second that. On the last two trucks I've bought the extended warranty and so far it has been "break even"... the covered repairs (one tranny, and A/C compressor, instrument cluster, clutch cyl etc) have been about the cost of the warranty.

For sure do a search on the price...there is a BIG markup in warranties. Google "Chrysler warranty" and you will find DC dealers who sell online for a lot less. I got an online quote and my local dealer matched it. $2100 for the DC max care 7 year 100K mile contract. Also look into the "diesel essentials" coupon for oil changes.... I got a book of 28 coupons (oil, filter, lube & wash) for $485. That's about $17.50 a pop and I can't buy the oil and filter for that price!

packard8

You should be able to get a printed copy of the coverage from your dealer. On my '06 it is 100K on the engine and related emissions components, 36/36 bumper to bumper (excluding brakes, clutch and other "service" items). It's the other things that can bite you... tranny, axles, suspension parts, electronics, A/C etc.

In my case, the extended warranty cost about 6% of the price of the truck. I plan to keep it for the next 6 years, so to me the "peace of mind" factor is worth that.

HOV

With an extended warranty, you're betting against yourself - basically that your truck will break down.

I prefer to hold on to my money and go for the sure thing - that my truck will be covered under a factory warranty that I already paid for in buying a new vehicle, and that I will earn interest on my money.

packard8

But what about AFTER your 36/36 factory warranty expires? If your tranny takes a dump @ 38K miles you'll be looking at a $2500+ repair bill...not likely, but it has happened.

Either way is a gamble. I"m betting against Chrysler (that I will need covered repairs in the next 6 years or 90K miles). You are betting that you won't.

Several years ago I had a Dodge van and the tranny went out @ 90K miles. The bill was $1300. I had bought the extended warranty for $900. The replacement trans cost me the $100 deductible and they paid for a rental car while mine was in the shop.......... works for me........

HOV

If my tranny takes a dump at 38K miles, I'll get a Goerend tranny for $1200 off (the cost of the extended warranty), and that new built tranny will have its own warranty.

For the tranny replacement for your van, you paid $900 + $100 = $1000 for a transmission that was worth $1300 - that kind of payoff is definitely not worth the gamble. I bet many have stories just like yours, where the warranty just barely paid for itself or even saved a little money, but there are a LOT more people out there who never used it at all and simply lost $1200. I know this is true because if it warranties actually benefitted the consumer more than the auto company, they wouldn't be sold.

A lot of people don't see warranties as an insurance policy, but that's what it is. How much is the comprehnsive policy for your truck? Mine's around $1,000/year [EDIT: the actual comprehensive component is only $260/year, the rest is other coverages, so I adjusted the figures below], and it insures me for the entire replacement cost of the vehicle, which would be around $45,000. Let's use simplified metrics to look at comprehensive insurance coverage for 3 years vs. an extended warranty:

Comprehensive coverage
Cost: $780 for 3 years
Max payout: $45,000 (assuming you completely wreck your truck)
Max payout dollar per cost of policy dollar: $57.69

Extended warranty coverage
Cost: $1,200 for 3 years
Max payout: $6,000 (assuming transmission and something else big takes a dump)
Max payout dollar per cost of policy dollar: $5

Your transmission coverage scenario
Cost: $900
Payout: $1,200
Payout/cost: $1.30

So... if you ever feel the odds are stacked against you in the insurance game, they're at least 10 times (and 57 times more in your case) more stacked against you in the warranty game!

packard8

A Goerend tranny is $3200 + shipping + install (around $4000, I'd guess). Maybe I was unlucky (or lucky), but on the van I also had an A/C compressor, water pump and dash cluster replaced under the ext warranty.

I agree completely that it is a profit making enterprise for the companies selling them (just as any type of home, life or auto insurance is). Compare your auto comp ins with home ins...my replacement cost is $400K and my ins is $1200/year (and a lot of that is liability). One thing to factor in (at least for me) is the peace of mind factor...I know that if 6 years from now @ 99K miles I have a major failure of the trans, axle, suspension, computer, HVAC etc it's on DC's dime. I pay about $300 a year to "feel covered", but to me it's worth it.

drewallen42

I laugh when someone takes a figure like 2K and says I'll keep my interest on the money paid. At $300 a year you might get enough to have dinner. Even with compounding it your still not making much money.

That's the great thing about the extended warranty. If you don't use it and your truck is great and wonderful you get a refund. If your tranny or a/c unit goes (both did) your in the money. I'd rather invest the $3K I saved by having the warranty and earn interest on it.

Also if you're only going to keep the car for a few years there is no need to purchase it.

I'm sure there are plenty of people out there who never purchased the warranty and never needed it. I've been the other person and am glad I have it.

Grit Dog

I've only had one vehicle in my life that had a factory warranty (save for the balance of the engine warranty on my Chevy).
My 01 Dodge 1500, I got a 7/100k Bumper to Bumper ext warranty, thankfully for free (by the dealer that repalced my rear axle the 2nd time when the truck was 1mo old!!).
I felt pretty smug and comfortable having the ext warranty. Sold the truck last yr w/ 120k mi on th odo and only had it in the shop 1 time for work in the 5yrs I owned it (except for 2 axles when it was brand new), and it was a minor problem, probably less than $200.
In my instance, I'm certainly glad I didn't have to pay for the warranty because I never would have gotten my money out of it.

HOV

You're right, $2000 is a tiny balance to invest and it won't earn much interest. But there are a lot of companies out there offering extended warranties for a lot of products, and if one were inclined to buy them, then the cost of that personal budgeting policy adds up as you purchase more and more extended warranties and protection plans, etc. My investment portfolio is humble, but it has been earning tons of value lately with the market upswing. Had I decided to buy extended warranties on the 3 new vehicles I've had since 2004 (eeeech, I have to stop that), computers, TV's, extra insurances via mail advertising, etc. then it would not have anywhere near the earning power it has now. Just saying "no" to extras like this and sticking to a basic investment strategy has had very tangible benefits for me.

Also, although the rate of return for Federal T-bills is generally considered the risk free rate and therefore the lowest opportunity cost, there are certainly much higher opportunity costs than that. Consider the business you could have started with that $2,000, or the IPO shares of Yahoo you could have bought, or the family vacation you could have taken that would have given you priceless memories... basically, most anything is better than giving more money to car salesmen.

Struggle

My warranty is going to end on my 04.5 and I am considering getting the factory extended warranty.

Here is my case, Since I am a auto mechanic I feel I have a better knowledge of how this works and cost involved. I know what to look for and can find problems as they most likely occur. Where as the general public is not aware of problems that may exist even though they have an extened warranty many do not use them based on not really knowing what is going on with thier vehicles.

My truck gets very little use (almost 3 years old and only has 15K) Last year the A/C quit blowing cold, took it in and they recharged it (low) and put dye in it. Did not use it much after that and now this year the A/C quit so back in and it blew the dye out of the compressor. New compressor and dryer and $650 in parts not including the labor (warranty at this time). Now figuring the A/C blend door breaking problems and the ujoint failures and ball joint failures I am willing to consider betting on the extened warranty will pay off for me. My truck has the 7/70 powertrain.

Also the lift pump problems the warranty would allow for the in tank conversion.

If I can extend my warranty out another 5 years I think it will pay and if it does not then I will be waiting for the check back. With the cost of parts now days I think it well worth considering if one is planing on keeping a vehicle during the full time the warranty was purchased.

We bought one for our 02 Chrysler T&C and it has broke even on the last repair and it is covered until late "08" and that warranty is non-chrysler but through the dealership we bought it at and has a 0 deductible.