Any of you have any experience with extended car warranties??

[passatdoc]

I drive a 1998 VW Passat with relatively low miles, about 127K (low for 13 years ownership....I think the national average is 1000/month). The car runs perfectly. Two major repairs have been water pump once and a leak in the power steering fluid system. Otherwise, all repairs have been routine maintenance: oil changes, timing belt change, fluid flushes, filters, etc. No major failures in powertrain, transmission, engine, radiator. No accidents other than fender benders with minor body work. I am happy with the way the car drives, it gets 35 mpg on freeways, and is the right size for my needs.

I received an e-mail for an extended warranty offer to cover powertrain and engine (mine are original). Does not cover routine maintenance. Because I had low miles and had followed all preventive maintenance intervals (which they read from the VIN), I was offered a five year, 100K mile warranty (five years would come first, I don't drive 20K/year) for $1900. If car is sold privately, warranty transfers. If car is totaled in accident, a prorated discount is given (if totaled at end of year two, 60% refund would apply).

I have 30 days to act on the offer. There is an exclusion for the first 90 days the warranty is in effect (excludes pre existing issues with car, but i have none). They require payment up front but you can make ten monthly payments at no interest charge, so it's basically $190/month for ten months, then it's all paid.

I checked the company (Access Warranty underwritten by Marathon Financial) with Better Business Bureau and it seems to have a good rating with few complaints. The car runs well, and I'd like to keep it 3-5 more years. Even if I bought a new car, I think I would keep this one as a spare, it's the best (most reliable) car I've ever owned. That said, the cost of a major repair (engine, head gasket, transmission, fluid systems etc) would be very high....once the power fluid system had a leak and the repair was close to $1000. I will still have to pay for routine servicing, but it seems like this may be a good way to control expenses for major system failures. The warranty has a zero deductible, so there would presumably be no out of pocket expense for a major engine or powertrain failure. The only major component not covered that I can think of would be the radiator (water pump is included).

What do you all think? My impression is that some major engine or powertrain issue is bound to occur in the next five years, so this is a way to control expenses. Does anyone have experience with this type of warranty on a car this old? Your opinions/input deeply appreciated.

 

[fordtech]

Unfortunately those aftermarket warranties often have more exclusions than they care to state when they are pitching the sale. Often we call in for approval for repairs on high mileage vehicles and they wont cover many common failed components due to the type of failure such a leak from a gasget or a failure due to a leak that was not corrected by the owner. I have had them refuse to pay for filter flushing an air conditioning system after a major fail for example. I have had them only install used components that they ship to us to install to save themselves on parts cost. Some of those parts they send to us look worse that the ones we take off.

I recommend putting money in a high yield money market certificate or other sound investment and save up for a major failure. If you take as good of care of your vehicle as you state it will have very low probability of a major failure. IMHO

 

[austinado16]

Kind of a betting game

I would probably pass. You've obviously got a good Passat because most of that era had engine and transmission failures already. Also, while the car has a lot of value to you, it doesn't in the used car market. So throwing $1,900 at it...on the bet that it will fail...might be sort of a waste of your money.

I'd say just keep servicing it properly ahd using OEM parts and synthetic oils, and you should get another 200,000mi out of it.

BTW, if you ever need a cheap source for OE parts, I've had good experience with www.autohausaz.com

 

[supersuds]

Agreed

That's right. It isn't a warranty, which comes free with a product; it's really an insurance policy. As with any insurance, you're betting the cost of the premium that you'll collect more than you pay in. However, the insurance companies have all of the data they need to know how much to charge, on average, to make money.

You seem to be thinking you're sure to make money on the deal. I wouldn't count on it. Would they be pushing to sell these policies if they weren't profitable?

It's a good general rule to only buy insurance for a risk you can't afford -- your house burns down, you cause an accident, you die and leave your dependents with no income.

 

[goatfarmer]

Most experts in the financial field recommend against extended warranties of any kind.

 

[ptcruiser51]

'01 Passat owner here

About 105K on the clock. I took the extended warranty from the dealer, and was glad I did. Water pump, alternator, and ABS failure all occured after the original warranty expired. All covered 100%, and they paid for rental from Enterprise because it was a two-day job (it always is with my dealer). Although I love my car, the dealer service SUCKS! I get 90% of repairs/maintenance done at an excellent mechanic shop near my job. Very good work and reasonable cost.

Took my car to the dealer for a headlight replacement when my mechanic was on vacation. Phone rings at 4pm, I'm assuming it's them calling to tell me car is ready. Oh no. "You need brakes, belts, transmission flush, etc." I brought this in for a HEADLIGHT, what are they doing looking at the brakes? By the way, they haven't even begun any repair while they've been looking for things to pump up the bill. Another unnecessary 2-day visit in the shop.

BTW, I nixed the rest of the repairs except the belts. Took car to my mechanic later, "You don't need brakes, these are fine!" I drove for another YEAR before he said it was time.

Crooks. Hate them/love my car.

 

[passatdoc]

The customer service at my VW dealer is excellent. VW bases their car deliveries (i.e. which cars the dealer receives to sell and keep their customers happy) not based on sales volume but based on customer satisfaction surveys. My dealer generally ranks number one in SoCal on these surveys (I get an e-mail survey from a research company in my e-mail after every service appt). They aren't cheap, but the nearest good VW mechanic is not within walking distance of my home as my VW dealer is, nor do they provide free loaners or a ride to work as the dealer does.

I still have 30 days to cancel the policy, and may do so based on what I've read here, however my concern was that most/all of my powertrain and engine is original. Original clutch and transmission, original engine. There was one expensive repair of the power steering system (covered under this policy should it happen again). If transmission or clutch fail, I'm looking at $1-2K in repairs.

I love this car, and even if I were to buy a new one in the next several years, I'd probably keep this one too since the trade-in value at this point is negligible, yet it may have higher value to the owner----because if the car has something catostophic (head gasket blows or whatever), you are FORCED to buy a new (or used) car in a hurry, rather than buy one when your financial plan says you are ready (or being able to wait for a sales special instead of buying on the spot). A used car that runs well, and does what the owner needs it to do, is worth more to the owner than the Blue Book value because it can defer the need to buy a successor car until the car suffers some very expensive failure. In this car's case, it's always been garaged, paint looks news (as does interior), and it gets 34 mpg on the freeway. The only way to beat that would be with a diesel or hybrid.

 

[austinado16]

Just a side note, that Pasat ABS failure is an ongoing issue with many of them. It's actually a failure of the solder joints on the printed circuit board. There is a guy on ebay with an excellent reputation for repairing them. You send you ABS Module to home (a part you can easily remove/install yourself) and in a couple days you get your component back, repaired. The Dealers will start throwing parts at the car, and $1500 later, you might have your ABS system repaired.

 

[whirlcool]

Back in the 70's I had a Cougar XR-7. Nice car. But the a/c didn't work right. I had it in the dealer many times and they kept saying it's working right when it wouldn't cool the car very well at all.

Finally took it to a a/c specialty shop. The said that there was a Ford Service Bulletin out on this problem. The factory service manual for the car said that the belt for the clutch should have 3/4" play. The service bulletin said that the correct amount of play should be 1/2". After they retensioned the belt, the a/c worked just fine. Now why didn't the dealer know this?

 

[hydralique]

Be Careful . . .

To not fall for the "internally lubricated parts" trap. Many aftermarket warranties cover primarily internally lubricated parts, and they'll show you a big list of these and what replacement could cost, items like crankshafts, main and rod bearings, camshafts, etc. The problem is that these parts rarely ever fail in a properly maintained modern car unless it has galactic mileage. The warranties don't cover items that often don't last the life of the car, like water pumps and alternators, window motors, a/c compressors, computers and sensors, etc., nor will they cover you if a non-covered item like a water pump fails and causes a failure in a normally covered item like a cylinder head. With an automatic VW you *might* get your money out of such a policy since the automatics often fail prematurely, but the manual transmissions generally hang in there well.

Austinado, have you ever tried Worldimpex or 1stVWparts? I've had good luck with both. 1stVWparts is actually a dealer in Washington, so they work on Pacific time and ground shipping is pretty quick to CA. Impex has a wider selection as they handle both OEM and non-OEM brands like Mahle and Bosch. I'll have to check into autohausaz, haven't heard of them until now.

 

[neptunebob]

I can only tell what our family experience was with warranties on Chevrolet. My parents always bought the extended warranty because the dealer was a friend of my dads (and as my brother says, like to rip off my dad). The issue we had was that the warranty did not cover any type of rubber seal. So when we had a transmission leak and required a lot of disassembly that was not covered and dad had to pay. The other time was when the "New Chevrolet" Impala wagon we had the differential fail because the weather was very cold and the oil in back turned into a gel and ruined the gears. Warranty weaseled out of that one too. So based on this I cannot really recommend them.

I have heard that VW are unreliable. What is the appeal of them? I don't mean to tell you what to do but would you consider perhaps a more reliable brand next time?

 

[austinado16]

VW's are excellent cars...

Sure, there are going to be problems with any model or car line, but VW's are a solid car with great feel and feedback.

Hydraulique, I haven't purchased from either of those vendors, although I have called World Impex in the past. I've got a couple local sources that get me OEM parts either the same day, or the next morning, so that's been very convenient over the years.

 

[passatdoc]

@neptunebob....car has been quite reliable. Only major repair was a power steering leak. Otherwise, for 12 1/2 years it's just been routine maintenance. Car drives smoothly and has never broken down. The only thing now broken on it is the rarely-used cruise control. A repair would be very labor intensive (remove steering wheel and column) and cost perhaps $500, so that is the only thing I've left unfixed.