Should you purchase a extended warranty?

[Jim]

Yes, good post @DHudson, and thank you for that.

I've shopped warranties (both RV and Auto) but I've never been able to find enough comfort to make the purchase Either the BBB had a less than favorable report or I can't wrap my mind around all the parts that they do, or do not, warranty. Not being a diesel mechanic, I don't know if the part that is most likely to fail is on the list or not. And there is often verbiage that denies coverage of a part if another parts failure was the cause of the failure. After an hour or so of trying to determine what all this actually means, I back up and go do something else.

 

[donzoh1]

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.

Nice points here. I'm wondering if anyone knows the expected payout rate on these. I know with many extended warranties, the average is below ten percent. In other words, if you spend 1000 dollars on one, you will realize 100 dollars in benefits, on average. Of course, if the warranty company or manufacturer has gone out of business, you'll get zero.

 

[Skipper N Martha Bishop]

When it comes to Vehicles I'm a Ford guy. When I buy I know how log I intend to keep the vehicle. If I'm going past the factory warranty I will get an extended service plan that Ford offers and no after market. I also took one out on our Travel Trailer we bought in May of 2020.

 

[DKRITTER]

We are almost no extended warranties at all, but we did for the Motorhome.

We bought a 6 year old DutchStar and decided to treat it like an insurance policy (hopefully you don't need it).

I'm glad we did, in 2 years we have almost recapped the expense and have repaired several things we might not have if it were out of pocket.

 

[Alex&Teresa]

I would think if you are buying a used unit you may want to consider it but buying new, I had a quote of $6-$7000 for a 7 year plan. I just don't see having to spend that kind of dough on repairs in the first 7 years of ownership.

 

[Jireh Financial]

I would think if you are buying a used unit you may want to consider it but buying new, I had a quote of $6-$7000 for a 7 year plan. I just don't see having to spend that kind of dough on repairs in the first 7 years of ownership.

WOW. I guess at that price it would be tough to do. My company sells service contracts and getting to that amount is tough. Pricing is often based on amount spent as well so that does come into play. SOMETIMES F & I people try to make a huge whack on a sale instead of helping the buyer get coverage. My theory is to help the buyer get needed coverage instead of the huge payday. If you are still interested in coverage, I have a couple great companies we represent. I would just need some basic unit info like year, make and model, and general amount spent. That would be the amount after TT&L but before any down payments.
If you would rather send that info on a private conversation, that's fine too. I would be glad to send you a quote.
Thank you,
Ken

 

[Gilly]

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 definitely agree. Going through this right now with Transwest of Belton Missouri. We did buy the service contract thinking how very expensive it is to work on these motorhomes. Keep in mind this is a used unit. We had Transwest perform an inspection to establish a baseline and they had to do a Missouri Motor Vehicle Inspection too. The motorhome was all over the road coming back to Omaha. I took it to Freightliner and they found all of the bushings in the sway bar were shot. So here we are with the dealer taking no responsibility and the service contract people denying the claim.

 

[Jireh Financial]

Reading a couple things here to comment on -
"ALSO AND VERY IMPORTANT, NO OTHER DEALER HAS TO HONOR THAT AFTERMARKET WARRANTY!"
This is only true if the service contract that is sold is funded directly by the dealer. Some would call that "Self Insurance". In that case the dealer works out of his own pool of money. In other cases, like ALL the companies we represent, dealers accept the coverage nation wide. They are all national companies. There is ZERO limit to the dealers that can participate. Also, dealers are paid at the posted retail rate (with the ones we sell) so what do they have to lose?
The main reason repairs are denied is that something is attempting to be covered under the plan that is not covered. The second reason is that the company is not called first. You should always get a copy of the covered and not covered items BEFORE buying anything. Even with the factory warranty work that has been done on our MH, my dealer got an authorization BEFORE the work was performed. One repair in particular took some time for the failure to occur on the lot.
We have long relationships with the companies we represent. Yes I am a true believer, I did buy a service contract with our new motorhome from one of the companies we represent.
This is a good topic. Yes, automotive, RV and marine contracts are all a bit different.
Holler if we can help.
Thank you
Ken

 

[DHudson]

Even with the factory warranty work that has been done on our MH, my dealer got an authorization BEFORE the work was performed.
Ken

I can not tell you how many times customer brought me a repair invoice that said repair "whatever" and ask to be reimbursed when I was a Service Manager.
No phone calls, no preauthorization, nothing. Many times the repair was in the same town as we were. Then, the customer gets made at me because I can not get the repair cover. Different story if they are traveling and have a repair done on the week end. STILL, need GOOD documentation of repairs..
Three C"s "Complaint", "Cause", & "Correction"

You should always get a copy of the covered and not covered items BEFORE buying anything.

Absolutely. To me, there are 2 kinds of policies.
1) One that has a list of items that are "NOT" covered, and if not list, should be covered.
2) The other, has a list of "Covered" items and if not covered, "will not" cover anything else..

I don't know if the RV world has a policy like the "#1" policy, but they tend to be "much" easier to work with. General Motors GMPP Major Guard policy comes to mind.
Again "EITHER" one requires authorization BEFORE any work is performed.
And understand that the customer is responsible for the diagnosis cost if the repair is denied by the Service Contract company.

 

[SaltyVetAdventures]

One thing that is worth considering...extended warranty is worthless if you are waiting months just to get your RV in for service, like what is happening now. ?‍