For Canadians: Replacement Cost & Extended warranties

[bramfrank]

I just got my SE Plus and am wondering whether I should pop for an extended warranty and replacement cost insurance. And if I do, should I go with what the dealer is offering or go to the aftermarket?

I have owned just one Chrysler before now, always having had either Japanese, European or GM vehicles - the GMs always had manufacturer's extended warranties and I took my chances with the foreign cars - to my serious detriment in the case of a BMW.

The LHS was quite reliable until the dealer misdiagnosed a blown head gasket as a leaking water pump and then debnied there was a problem until the car overheated and cracked the head a week after they 'fixed' it. The third party warranty (PPP) had paid for the pump repair, but (not necessarily incorrectly) claimed that they pay once and that the issue was due to a dealer error. The dealer denied all responsibility and both went to great lengths to try and blame me for the problem in spite of the fact that the car was a low mileage unit had been exclusively serviced, more often than the schedule called for, and only by the servicing dealer. (Guess who I DIDN'T buy my Journey from?)

In the end I wound up in small claims court to get back the almost $4,000 I laid out putting my car back on the road - the judge made the dealer and the warranty company split the costs - but my complaint was really with the dealer, rather than the warranty company, strangely enough.

I tend to keep my vehicles a long time and I did do well financially with almost every plan I bought, though cars have gotten better lately.

Then there is replacement cost insurance . . . the dealer wants a LOT of money (almost $2K for 5 years) while my insurance company wants $900 - the insurance broker offers up to 7 years for an extra $500.

I figure that the longer you own a vehicle, the more likely it is to be involved in an event that will get it written off, or at the very least to require some non-trivial work to be done that would be nice to have done with new parts.

So, what is the collective opinion about these two insurance programs? And would you go with the dealer's or the 3rd party's offering in each case? The questions to answer:

Extended warranty,

- Yes or no?

If yes:

- Dealer or 3rd party?

- How long (years/kilometrage)?

- Deductible?

Replacement cost

- Yes or no?

If yes:

- Dealer or insurance company (dealer is a lot more expensive)?

- How long (5 or 7 years)?

There are no right or wrong answers, but I am looking for some perspective.

Thanks in advance

[dodgefan]

I just got my SE Plus and am wondering whether I should pop for an extended warranty and replacement cost insurance. And if I do, should I go with what the dealer is offering or go to the aftermarket?

I have owned just one Chrysler before now, always having had either Japanese, European or GM vehicles - the GMs always had manufacturer's extended warranties and I took my chances with the foreign cars - to my serious detriment in the case of a BMW.

The LHS was quite reliable until the dealer misdiagnosed a blown head gasket as a leaking water pump and then debnied there was a problem until the car overheated and cracked the head a week after they 'fixed' it. The third party warranty (PPP) had paid for the pump repair, but (not necessarily incorrectly) claimed that they pay once and that the issue was due to a dealer error. The dealer denied all responsibility and both went to great lengths to try and blame me for the problem in spite of the fact that the car was a low mileage unit had been exclusively serviced, more often than the schedule called for, and only by the servicing dealer. (Guess who I DIDN'T buy my Journey from?)

In the end I wound up in small claims court to get back the almost $4,000 I laid out putting my car back on the road - the judge made the dealer and the warranty company split the costs - but my complaint was really with the dealer, rather than the warranty company, strangely enough.

I tend to keep my vehicles a long time and I did do well financially with almost every plan I bought, though cars have gotten better lately.

Then there is replacement cost insurance . . . the dealer wants a LOT of money (almost $2K for 5 years) while my insurance company wants $900 - the insurance broker offers up to 7 years for an extra $500.

I figure that the longer you own a vehicle, the more likely it is to be involved in an event that will get it written off, or at the very least to require some non-trivial work to be done that would be nice to have done with new parts.

So, what is the collective opinion about these two insurance programs? And would you go with the dealer's or the 3rd party's offering in each case? The questions to answer:

Extended warranty,

- Yes or no?

If yes:

- Dealer or 3rd party?

- How long (years/kilometrage)?

- Deductible?

Replacement cost

- Yes or no?

If yes:

- Dealer or insurance company (dealer is a lot more expensive)?

- How long (5 or 7 years)?

There are no right or wrong answers, but I am looking for some perspective.

Thanks in advance

[dodgefan]

I did go with the extended warrany from the dealer. It was about $2200.00 which extended by 3yr 60 000 km bumper to bumper warranty to 5 yrs/100 000 bumper to bumper (GOLD PACKAGE). It also includes all oil changes and tire rotations for the 5 yrs AND if the car is in for service of any kind they will supply me with a car at no cost to me. If you plan on keeping the car for a long time, I'd suggest going with the extended warranty. For me with my R/T being fully loadedmy thought was if something goes after the inital warranty is done, any parts will likely be pretty expensive such as the touch screen, AWD etc.

For replacemnet insurance, my insurance company (TD) included full replacemnet cost of the current model year for the first 3 yrs at N/C. After that there will be a charge for it. If I recall correctly it would be approx $300.00 to keep that option after the 3 yrs at N/C.

Just my two cents, but I am very comfortable feeling fully covered for the ownership of my vehical. After a 100 000 km I trade them in anyways.

[drozz]

I did go with the extended warrany from the dealer. It was about $2200.00 which extended by 3yr 60 000 km bumper to bumper warranty to 5 yrs/100 000 bumper to bumper (GOLD PACKAGE). It also includes all oil changes and tire rotations for the 5 yrs AND if the car is in for service of any kind they will supply me with a car at no cost to me. If you plan on keeping the car for a long time, I'd suggest going with the extended warranty. For me with my R/T being fully loadedmy thought was if something goes after the inital warranty is done, any parts will likely be pretty expensive such as the touch screen, AWD etc.

For replacemnet insurance, my insurance company (TD) included full replacemnet cost of the current model year for the first 3 yrs at N/C. After that there will be a charge for it. If I recall correctly it would be approx $300.00 to keep that option after the 3 yrs at N/C.

Just my two cents, but I am very comfortable feeling fully covered for the ownership of my vehical. After a 100 000 km I trade them in anyways.

We took the extended warranty on our Crew as well. In the long run, the extra $$$ will be well worth it seeing as how many issue's i had with the breaks already lol. I didn't get any sweet deal that includes the oil change and tire work though, i wish they had offered me that lol.

[dodgefan]

We took the extended warranty on our Crew as well. In the long run, the extra $$$ will be well worth it seeing as how many issue's i had with the breaks already lol. I didn't get any sweet deal that includes the oil change and tire work though, i wish they had offered me that lol.

It was their "Gold Package", they had three to chose from. I'd have thought all dealer have the same packages avalible?

[bramfrank]

Given what we know about costing for extended warranties and replacement cost policies, I wonder if we couldn't set up a buyer's group (in Canada, as far as I'm concerned) and purchase a number of policies from one dealer who would make a small profit on each, but a reasonable overall amount.

I was thinking that we might be able to purchase them for about 60-65 cents on the dollar, given that the margins are 50%. A $2200 plan would go for $1,320-$1,430, giving the dealer between $220 and $330 in profit . . . 20%-30% markup, which is very fair for something they don't work to sell.

Anyone interested?

As long as your vehicle is under warranty you can buy in (though there is a surcharge for cars with more than 20,000km on them).

PM me with details of your vehicle - year, model, mileage and what plan you are interested in - I presume we'd be charging these plans to credit cards, which would make the money part simpler to deal with. It doesn;t even have to be a Journey - any Chrysler product likely qualifies.

The more people we have in the deal, the easier it will be to get the discounts to the lower end of the range.

Edited October 14, 2011 by bramfrank