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There are relatively few car warranty programs that actually pay out reliably when a claim is submitted. Ally (often sold through big dealerships in the finance dept) and Freedom Warranty come to mind.
One thing I can say from firsthand experience is that dealers are often given additional options (higher mileage limits, longer coverage terms) than you can buy yourself directly. It's not always an apples-to-apples markup scam.
They wouldn't be selling it if they made 0 dollars. Probably not worth it if you buy a Honda or Toyota, but if you're into Land Rovers, consider it prudent cost control.
Hey, do you think these companies go into business to lose money?
No?
Well, then, how do you think they make their profits?
I'll let you in on a little secret. They intend to take in more (in ”premiums”) than they pay out.
insurance is for things that could truly impoverish you, like your house burning down, having to undergo two years of cancer treatment, or being at fault in a car accident that cripples someone for life. It's not for small expenses that you should be covering out of your short term savings.
The exact reason I left commercial underwriting after a few years-
Insurance companies are in the business to not pay claims whenever possible or to pay as little as they can when a claim is filed.
Left a bad taste in my mouth and I never regretted leaving the insurance business.
With homeowners insurance about the only time you want to file a claim is if the house burns down- any other claim will usually raise your rates and never file a claim for water. Then you will have a "mold issue" if someone sees that on your CLUE report.
There are relatively few car warranty programs that actually pay out reliably when a claim is submitted. Ally (often sold through big dealerships in the finance dept) and Freedom Warranty come to mind.
One thing I can say from firsthand experience is that dealers are often given additional options (higher mileage limits, longer coverage terms) than you can buy yourself directly. It's not always an apples-to-apples markup scam.
They wouldn't be selling it if they made 0 dollars. Probably not worth it if you buy a Honda or Toyota, but if you're into Land Rovers, consider it prudent cost control.
Good point about the land rover however I'm being they have some exclusion language to weasel out of covering them. My suggestion if you have to have a land Rover lease it. Then you don't have to take the hit selling it when the warranty runs out.
I can relate from the repair shop owner's side of these "warranties".
In over 30 years of these policies bought by many people, I've only gotten very small partial pay-outs from them on major engine & transmission repairs.
For the most part, their exclusions for coverage render significant loss coverage down to almost none, if any, coverage.
I've had cars towed into the shop with blown engines and the insurer was only willing to pay for a minor item in the engine that caused the rest of the engine to fail. Same with transmissions ... getting a complete repair wasn't going to happen, they always found a reason why that only a small item was covered under their warranty.
I got to a point where I told my customers up front that I wouldn't deal with these outfits. Just a waste of my time trying to explain to the adjusters why and how the failure happened and get them to cover the appropriate scope of repairs. If the customer was relying upon the warranty outfit to cover the cost of repairs, it was better for me to decline to get involved. As well, the few times that they did pay a nominal portion of a major repair bill, it took weeks to get paid and I had no leverage with the warranty company ... their customer was already down the road with the vehicle. Yes, I could have filed a mechanic's lien on the vehicle and pursued that if the bill wasn't paid in full ... but it never was worth the time/effort/energy/expense to do so.
Also a repair shop owner here. A couple years back I was in the hospital for a knee replacement. With lots of time on my hands, my laptop and the ability to log into the shop PCs I helped the boys at the shop with internet and voicemail marketing. A lady who owned a Honda told me she had an extended warranty that was REALLY GOOD, always paid with no hassle, her friends used the same company etc... Silly me, I broke policy and told her i would work with the company to get her alternator replaced. Although book time was a little more it probably took my stepson 45 minutes to change the alternator. Three way haggling between me, the customer and the sleaze bag warranty company took over two hours. That's two hours we did not get paid for so fortunate I was in a hospital bed with time on my hands. In the end the lady was pissed off because the warranty company paid so little. She did not bring us any other business but I heard from her recently needing something else with her warranty plan. I told her politely I knew better last time and will never make this same mistake again.
I don't have Carshield, but my brother had it. When the engine in his truck died, he took it to a mechanic, thinking that Carshield would cover it. They denied the claim, saying the engine over heated, which caused the failure. They said if he wanted the mechanic to conduct further investigation (running a scope into the engine) into why the engine overheated, then it might be something that is covered, but if not covered he would have to pay the additional cost of the mechanic to scope it out to determine the failure. He cancelled his Carshield coverage shortly after that.
As for other extended warranties, my son bought a used car from a Chevy dealership, and bought the extended warranty. His experiences were similar to those of my brother. The car developed a persistent oil leak - not covered. After several trips back to the dealer, and attempts (and charges) for them to try to resolve the issue, they ended up saying it would cost him over $1,000 out of pocket to fix it. The catalytic convertor went bad on the car as well; of course not covered. Just about nothing he took the car in for repair for was covered by the extended warranty. I will never buy and extended warranty.
That catalytic converter should have been factory warranteed for 80k miles anyway.
I don't see the point in getting it unless you drive a car that's prone to $1,000 repairs. How often do you have to take your car in for repairs I have a truck that I've had for 9 years. It needed an alternator about 2 years ago, and had the drivetrain problem about 6 years ago. Since I was a mechanic I changed the alternator myself so $150 for an alternator, in about an hour's worth of work. And then the drivetrain problem was a little more than I wanted to do in my driveway so I paid somebody $600 to fix it that $750 over 6 years. How much would monthly payments into carshield be? I'm betting more than $750 over 6 years.
I think they mostly operate on that fear of taking your car to a mechanic and they say it's a $4,000 repair. If that happens to you no matter what the first mechanic says get a second opinion.
I blew a head gasket in one of my cars years ago and it was before I was a mechanic and I really didn't know it was wrong so I took it to somebody and they wanted 7200 to fix it. They wanted to replace the entire engine. Vehicle wasn't worth that much. So I went out and got a second opinion before just jumping the car and found somebody that wanted to replace the head which is fine the head was warped and charged me $1,500 for it.
A lot of shops out there just wanted to have more work than necessary so they can get paid.
There is a sweet spot that entices people to buy them. Let's say it is a used car selling for $10-$15K in great shape bu thigh mileage. You don't want to end up with a transmission fix costing $5000. This is a tipping point. You can't refuse the repair and total a perfectly nice car but you are getting dangerously close to the value of the car.
There is a sweet spot that entices people to buy them. Let's say it is a used car selling for $10-$15K in great shape bu thigh mileage. You don't want to end up with a transmission fix costing $5000. This is a tipping point. You can't refuse the repair and total a perfectly nice car but you are getting dangerously close to the value of the car.
I would still take my chances you may or may not have to pay for a $5,000 transmission if you pay for a car shield you're paying for that no matter what.
I see it as money for repair versus money for nothing. Chances are they would weasel out of that anyway.
I would still take my chances you may or may not have to pay for a $5,000 transmission if you pay for a car shield you're paying for that no matter what.
I see it as money for repair versus money for nothing. Chances are they would weasel out of that anyway.
Isn't this what the insurance game is? People want to pay $100 in premium and collect $1000 in claims. The insurance company hopes to pay $100 in claims and collect $1000 in premiums. They are both gambling. The insurance I bought cost $2000 for 3 years. I would have never bought it if it was $5000.
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