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HMS Beagle

Napa, California

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Posted: 10/09/21 09:42am Link  |  Print  |  Notify Moderator

The "extended warrantee" is definitely a for profit business, but much different than selling the truck or camper. There is many times the profit in selling the warrantee than in selling the truck. Many dealerships are happy to give you the truck at their true cost if you will just buy the warrantee. The proof of this is in how diligently and forcefully the sales people pursue the warrantee sale.

Also, there are extended warrantees offered by the manufacturer and those offered by a third party. While both are overpriced, the 3rd party ones make it their business not to pay claims - after all, claims come right out of their bottom line. It is a little different for the manufacturer, as they have a brand and a customer to protect. I've bought only two 3rd party warrantees on products, both proved to be worthless when needed.

Finally, if you pay the retail price for these you are paying 2x or 3x too much. For automobiles, the exact same manufacturers warrantee is often available from a different dealership for far less. I rarely buy these, but the repair costs on a new diesel truck where even small problems can result in a "cab off" repair are a consideration, so I bought the longest one offered. After negotiating with the dealer who sold me the truck, I got it down to around $5K. But I walked and purchased the same Ford warrantee from a dealer 3000 miles away for $1800. I'm sure they made money on it.


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Grit dog

Black Diamond, WA

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Posted: 10/09/21 10:00am Link  |  Print  |  Notify Moderator

Unobtanium wrote:

noteven wrote:

Future scientists studying the Age of Petroleum Man will know about a subset of the population known as Face in a Screen All the Time Man.

They will have reasoned out the effects this had on the Human Attention Span before AI implants and how humans used to forget to do things, forget to process things, forget what they read about how bad some business was...

what am I blabbing on about again?


LOL....the state park we're currently in filled to the gills last evening with those face in a screen folks. New rigs which had to be the largest they could find or jump in debt over, sitting around a fire in a cloud of smoke because they do not know how to build one, with the entire family having their noses buried in phones for hours upon hours.


This coming from a guy who is a very frequent poster here on an Internet forum……lol


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toedtoes

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Posted: 10/09/21 03:08pm Link  |  Print  |  Notify Moderator

To me, the difference between insurance and a warranty is that insurance will pay out for injuries (yours or someone else's). A warranty only pays out for damages to your vehicle/home.

I know very few people who have bought extended warranties and had them break even.

The problem is a lot like gambling. You may win big today - put in $20 and get back $10,000. But when you add up all the money put in over time versus what you got out and it isn't such a big win after all.


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valhalla360

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Posted: 10/10/21 01:30am Link  |  Print  |  Notify Moderator

RetiredRealtorRick wrote:


So you don't think auto & health insurance are profit-driven industries??? LMAO!


It's the difference between getting a mortgage from a bank and going to a loan shark...

Both are intending to make a profit.

One is abusive and uncontrolled...but as a salesman, they are great.


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RetiredRealtorRick

St. Augustine Beach, FL

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Posted: 10/10/21 06:22am Link  |  Print  |  Notify Moderator

valhalla360 wrote:

RetiredRealtorRick wrote:


So you don't think auto & health insurance are profit-driven industries??? LMAO!


It's the difference between getting a mortgage from a bank and going to a loan shark...

Both are intending to make a profit.

One is abusive and uncontrolled...but as a salesman, they are great.


OK, let's compare it to getting a mortgage from a bank. Sure, SOME of the aspects of mortgage lending are strictly controlled, but others are not. As a Realtor, in the not-too-distant past I have helped buyers negotiate things like 'origination' fees, and it made a big difference in their out-of-pocket expenses. Even a 1% negotiated drop in an origination fee on a $500,000 oceanfront condo adds up to $5000. That's $5000 that they would have paid unnecessarily. Much the same concept as a a markup on an extended service contract, right? Only difference would be that the buyer at least stands a chance of an extended service contract paying off for him -- but paying it out in an excessive origination fee on a mortgage . . . not so much.


. . . never confuse education with intelligence

Bedlam

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Posted: 10/10/21 09:55am Link  |  Print  |  Notify Moderator

My belief is that to purchase an extended warranty, you do do not have confidence in the durability of the product you purchased. As others pointed out, companies are out there to make profit and will set the cost higher than payout. You will always be betting against "the house" odds and be better to bank that money yourself.


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Grit dog

Black Diamond, WA

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Posted: 10/10/21 10:04am Link  |  Print  |  Notify Moderator

Bedlam wrote:

My belief is that to purchase an extended warranty, you do do not have confidence in the durability of the product you purchased. As others pointed out, companies are out there to make profit and will set the cost higher than payout. You will always be betting against "the house" odds and be better to bank that money yourself.


That’s half (or some portion) of the extended warranty buyers rationale. The bigger part, I think, is folks who don’t have confidence in themselves or the want or knowledge to do their own repairs.
And when you add up shop rates for repairs, it doesn’t take a lot to lower the “house” odds if someone is 100% bound to shop rates for all repairs.

RetiredRealtorRick

St. Augustine Beach, FL

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Posted: 10/10/21 06:45pm Link  |  Print  |  Notify Moderator

Grit dog wrote:

Bedlam wrote:

My belief is that to purchase an extended warranty, you do do not have confidence in the durability of the product you purchased. As others pointed out, companies are out there to make profit and will set the cost higher than payout. You will always be betting against "the house" odds and be better to bank that money yourself.


That’s half (or some portion) of the extended warranty buyers rationale. The bigger part, I think, is folks who don’t have confidence in themselves or the want or knowledge to do their own repairs.
And when you add up shop rates for repairs, it doesn’t take a lot to lower the “house” odds if someone is 100% bound to shop rates for all repairs.


I have NO confidence in myself should I need a new engine or a transmission rebuild.

I should be ashamed of myself, I know.

[emoticon]

Bedlam

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Posted: 10/10/21 09:34pm Link  |  Print  |  Notify Moderator

So the question I have is why someone would buy something with questionable reliability and then have to bandaid the purchase with an extended warranty. At least in my view, I would look at purchasing something that worried me less about failure.

Grit dog

Black Diamond, WA

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Posted: 10/10/21 09:55pm Link  |  Print  |  Notify Moderator

RetiredRealtorRick wrote:

Grit dog wrote:

Bedlam wrote:

My belief is that to purchase an extended warranty, you do do not have confidence in the durability of the product you purchased. As others pointed out, companies are out there to make profit and will set the cost higher than payout. You will always be betting against "the house" odds and be better to bank that money yourself.


That’s half (or some portion) of the extended warranty buyers rationale. The bigger part, I think, is folks who don’t have confidence in themselves or the want or knowledge to do their own repairs.
And when you add up shop rates for repairs, it doesn’t take a lot to lower the “house” odds if someone is 100% bound to shop rates for all repairs.


I have NO confidence in myself should I need a new engine or a transmission rebuild.

I should be ashamed of myself, I know.

[emoticon]

Nice oversimplification.

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