Should you purchase a extended warranty?

[DHudson]

I see a lot of people asking about whether or not to purchase a “Extended Warranty” on their Travel Trailer or Motorhome. I would also apply this to your next car or truck purchase.

As a former Service Manager at a New Car Dealership for over 25 years, I thought I would give you some insight to “Extended Warranties”, at least from the New and used car world. I would think RV’s would follow suit.

It can be very difficult at times to determine if the warranty the dealer is offering is a “FACTORY “issued policy or if it is a “AFTERMARKRT” policy. The dealer will say “It’s just like the Factory warranty. NOT!!

There are 2 kinds of extended warranties a dealer can offer (again this is the automotive world). I imagine the RV world is very similar.

The first is a extended warranty offered from the manufacturer. These are backed by the manufacturer at their franchised dealers. The dealers do not make as much profit off of these warranties as they do with “Aftermarket” warranties. And I would think that if you are a authorized franchised dealer, you “have” to perform warranty work and honor the “Factory Extended Warranty”.



The second type of “Extended Warranty” ( it's not actually a warranty) or “Service Contract” sold by dealers (New and Used) is offered by a company NOT associated with the Manufacture. The dealers stands to make a lot more profit off these types of warranties and usually has incentives if they can keep their warranty expense rate under a certain percentage.

ALSO AND VERY IMPORTANT, NO OTHER DEALER HAS TO HONOR THAT AFTERMARKET WARRANTY!

It is entirely up to the dealer or repair facility.

SOME aftermarket polices will only allow repairs be done at their approved shops.

Many dealers will not accept these polices because they refuse to go through the steps to get a preapproval before performing the work. The Extended Warranty provider may require a adjuster to inspect the vehicle BEFORE work is performed and required documentation of maintenance services. They will require a proper diagnosis and estimate of repairs BEFORE authorizing the repairs. They also will only authorize a certain amount of time to do a repair. (Example, 1.5 hours of labor time to replace a wheel bearing). Not saying they can do it quicker or take longer, that is what they will pay time wise for the job x the $ labor rate.

IE: 1.5hr X $75.00 = $112.50 Plus parts

They will also only allow so much mark up on the parts.

Both of these last statements are true of Factory warranties as well.

Many dealers will not abide by these rules and think they should be paid whatever they ask for.

Many also will not seek “Preapproval” for the repairs and then the warranty company refuses the repair.

These Warranty companies are a “for profit” company, and simply cannot do that.

Can extended warranty companies be ok? Yes

Are there horrible Extended Warranty companies. Absolutely!

Most are in the middle somewhere.

IF you have your vehicle repaired and YOU pay for the repair with intentions of being reimbursed, be prepared to have the claim denied unless it was preapproved, going through all the proper steps.. IF that was done, I would think the shop would accept payment by credit card. Though I’ve worked for dealers that would not let me do that.

Would I buy a “Factory Extended Warranty”? Possibly. Depends on what it covered for how long. And how much it cost.

Would I buy a “Aftermarket Extended Warranty”? NO. They usually look for a way to “Decline” the repairs. They are all about making money, not having a “satisfied” customer. I am sure there are exceptions.



The last thing I will say is:

With a “Factory” issued extended warranty, not only do you have the Dealer that should have your best interest at hand, IF you need more input or support, you have the Manufacture that may back you up and offer to make things right.

With a “Aftermarket” policy, if your dealer will not make it right, you are on your own.

 

[JRS]

Nice post! Personally never purchase any extended warranty programs.

 

[redbaron]

I am not aware of any factory extended warranty programs. I would personally be very open to a newmar factory warranty extension, but doubt I could afford it.

 

[JRS]

I am not aware of any factory extended warranty programs. I would personally be very open to a newmar factory warranty extension, but doubt I could afford it.

The only one I can think of is for the Freightliner Chassis. Hope I'm not making a mistake by not getting it.....

 

[redbaron]

The only one I can think of is for the Freightliner Chassis. Hope I'm not making a mistake by not getting it.....

I did get that one. It was cheap, and since it was a mfg warranty, I felt good about it.

 

[sanda]

I shop around before buying the extended factory warranty. I've done this on my new ram trucks. My dealer offered me the warranty for 3900.00. I shopped via internet and could buy the exact factory warranty for 1900.00 On closing the deal I showed the difference in the price and they agreed (after their extensive research) to match the price.
This warranty was full bumper to bumper for a total of 8 years or 85000 miles. I don't usually buy warranties but I couldn't pass this one up.

 

[Jireh Financial]

My company offers Service Contracts. WE try to price them affordable and we represent a couple very solid companies.
Let me know if we can help.
Thank you,
Ken

 

[Lzumc2008]

I see a lot of people asking about whether or not to purchase a “Extended Warranty” on their Travel Trailer or Motorhome. I would also apply this to your next car or truck purchase.

As a former Service Manager at a New Car Dealership for over 25 years, I thought I would give you some insight to “Extended Warranties”, at least from the New and used car world. I would think RV’s would follow suit.

It can be very difficult at times to determine if the warranty the dealer is offering is a “FACTORY “issued policy or if it is a “AFTERMARKRT” policy. The dealer will say “It’s just like the Factory warranty. NOT!!

There are 2 kinds of extended warranties a dealer can offer (again this is the automotive world). I imagine the RV world is very similar.

The first is a extended warranty offered from the manufacturer. These are backed by the manufacturer at their franchised dealers. The dealers do not make as much profit off of these warranties as they do with “Aftermarket” warranties. And I would think that if you are a authorized franchised dealer, you “have” to perform warranty work and honor the “Factory Extended Warranty”.



The second type of “Extended Warranty” ( it's not actually a warranty) or “Service Contract” sold by dealers (New and Used) is offered by a company NOT associated with the Manufacture. The dealers stands to make a lot more profit off these types of warranties and usually has incentives if they can keep their warranty expense rate under a certain percentage.

ALSO AND VERY IMPORTANT, NO OTHER DEALER HAS TO HONOR THAT AFTERMARKET WARRANTY!

It is entirely up to the dealer or repair facility.

SOME aftermarket polices will only allow repairs be done at their approved shops.

Many dealers will not accept these polices because they refuse to go through the steps to get a preapproval before performing the work. The Extended Warranty provider may require a adjuster to inspect the vehicle BEFORE work is performed and required documentation of maintenance services. They will require a proper diagnosis and estimate of repairs BEFORE authorizing the repairs. They also will only authorize a certain amount of time to do a repair. (Example, 1.5 hours of labor time to replace a wheel bearing). Not saying they can do it quicker or take longer, that is what they will pay time wise for the job x the $ labor rate.

IE: 1.5hr X $75.00 = $112.50 Plus parts

They will also only allow so much mark up on the parts.

Both of these last statements are true of Factory warranties as well.

Many dealers will not abide by these rules and think they should be paid whatever they ask for.

Many also will not seek “Preapproval” for the repairs and then the warranty company refuses the repair.

These Warranty companies are a “for profit” company, and simply cannot do that.

Can extended warranty companies be ok? Yes

Are there horrible Extended Warranty companies. Absolutely!

Most are in the middle somewhere.

IF you have your vehicle repaired and YOU pay for the repair with intentions of being reimbursed, be prepared to have the claim denied unless it was preapproved, going through all the proper steps.. IF that was done, I would think the shop would accept payment by credit card. Though I’ve worked for dealers that would not let me do that.

Would I buy a “Factory Extended Warranty”? Possibly. Depends on what it covered for how long. And how much it cost.

Would I buy a “Aftermarket Extended Warranty”? NO. They usually look for a way to “Decline” the repairs. They are all about making money, not having a “satisfied” customer. I am sure there are exceptions.



The last thing I will say is:

With a “Factory” issued extended warranty, not only do you have the Dealer that should have your best interest at hand, IF you need more input or support, you have the Manufacture that may back you up and offer to make things right.

With a “Aftermarket” policy, if your dealer will not make it right, you are on your own.

I bought a new RV with a service package. How do I buy factory extended warranty after this current one is about to expire in 5 years? Will Freedom elite RV company or camping world contact me?

 

[Jireh Financial]

I bought a new RV with a service package. How do I buy factory extended warranty after this current one is about to expire in 5 years? Will Freedom elite RV company or camping world contact me?

That would generally be the plan in a perfect world. Better idea to set yourself some sort of reminder 6 - 8 months out from your expiration date. Sometimes dealership people change and follow up might slip a bit. That is not meant as a slam but just the reality.
Remember, many of the features between Auto and RV plans are different. There are hundreds of auto service contract companies. Not near as many in the RV and Marine industries.
Let me know if we can help.
Ken

 

[DHudson]

I bought a new RV with a service package. How do I buy factory extended warranty after this current one is about to expire in 5 years? Will Freedom elite RV company or camping world contact me?

It would be very unusual to be able to buy a "factory warranty" AFTER the initial purchase on a automobile. Sometimes you can, but not very often. Again, I am from the Automobile world, not RV's. I really am not sure that RV Manufactures offer a extended warranty. Just know that most "automobile" extended "Service Contracts" have specific items they cover, IF it is not listed, it is not covered, so read the contract very carefully. AND they require detailed maintenance records. Most of the companies I dealt with looked for a reason to deny a claim rather than approve a claim. OF COURSE the shop that is repairing your RV has A LOT to do with a claim getting paid or not. How they present / document the claim has l a lot to do with getting a claim approved or rejected.
I'm not saying there are not good companies out there, but they a vastly different than dealing with a manufacture when you need a repair. Extended service contracts are pretty cut and dry as to what they cover and how they will approve the repair.