Last post on Oct 03, 2013 at 9:11 AM
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#3141 of 3172 Re: 84-months? [ken117]
by Kirstie@Edmunds HOST
Mar 06, 2013 (2:03 pm)
True, it can be a good solution as long as you honestly think your cash-flow issue is short-term, AND as long as you have the discipline to pay extra each month once the cash is available. Otherwise, the additional years of interest and lack of progress in paying off principal can be a real shocker, especially if the owner wishes to trade-in prior to paying off.
Last time I paid cash, but otherwise, I usually take out a 5-year loan with payments I know I can comfortably afford, even if I have a (not totally drastic) change in income. I then pay $50-100 extra each month. That plan fits my comfort level better than a shorter-term loan.
#3142 of 3172 2010 Saab 9-5 Aero
Mar 13, 2013 (11:56 am)
I am looking at the following two choices for a vehicle service contract on my 2010 Saab that does not have a factory warranty due to Saabs bankruptcy.
My 2 options are:
1. Saab Secure Warranty backed by Allstate Dealer Services (administered by Pablo Creek)
2. Service Shield backed by Amtrust Financial (administered by Royal Administration Services)
Both of these plans that I am looking at are exclusionary (OEM-type) policies. # 2 is somewhat cheaper than # 1.
What are your thoughts?
#3143 of 3172 Re: I asked [akangl]
Mar 13, 2013 (2:39 pm)
I am just adding to your question; don't have an answer. I have a Nissan Altima that is about 30 months old with about 14,000 miles on it. I am wondering if I can get an extended warranty or not. I am still undecided about it. I notice most people say if you have a Honda or Toyota they are really reliable. What about an Altima?
#3144 of 3172 Re: 84-months? [kirstie_h]
Mar 14, 2013 (3:58 am)
One thing about an extended service contract is you pay the money and it is gone. On the other hand, without an extended service contract, you still have the money. Of course you may have to pay the money in the future if a covered event actually occurs but, with many of today's vehicles, you will more than likely not have to pay it.
An extended service contract is very expensive insurance. Extended service contracts are written to protect the provider and the small print is, as intended, difficult for most to understand.
What really bothers me about such contracts is the amount of profit a dealer makes. For example an extended service contract for which a buyer pays $2k might actually cost the dealer $800 or so. People should ask themselves if they really think paying a dealer over a thousand dollars is a good deal?
#3145 of 3172 Re: warranty apr [fordfocus574]
Mar 14, 2013 (4:10 am)
Actually, this might be illegal. Remember dealers do not provide financing. Lending institutions provide the financing. No lending institution requires a purchase of an extended warranty.
Lending institutions will provide the dealer with the interest rate for which a buyer qualifies and will also provide the maximum amount of the loan they will finance. Often times this amount is more than the price of the vehicle.
The less honest dealers will often inflate the interest rate or pad the loan by including costly add-ons to get as close as possible to the maximum amount the lending institution will finance.
Those less than honest dealers will receive a portion of any additional payment resulting from such a padded interest rate as additional profit. This appears to be what they did to you.
Clearly, in the worse case you qualified for a five percent interest rate. Since that is high in today's market my bet is this five percent was inflated by the dealer and you actually qualify for a lower rate.
At a minumum you might want to go to Capital One Auto Finance on line and apply for a loan to see what they will offer you. Since you have already bought, Capital One has refinancing options. As a benefit, if you refinance the dealer will lose the profit it thinks it made on your financing.
Personally I would have run from this dealer as fast as possible. There are far too many red flags.
#3146 of 3172 Re: 84-months? [texases]
Mar 15, 2013 (11:10 pm)
If you can cut a good deal, sure. 84-months is just 7 years.
#3147 of 3172 Re: 84-months? [buya]
Mar 16, 2013 (2:21 pm)
"Just 7 years". Most of which the buyer is upside down, owing more than the car is worth. Better to buy a car on can afford in 3 years, keep it for 7, and pocket the savings.
Can an 84-mo loan work? Sure, but the folks with the financial discipline to do it know they'd be better off with a shorter loan. Most 84 month loans are to let folks buy more car than they should. Any financial bump in the road and they're in the ditch.
#3149 of 3172 Re: 84-months? [jmardi]
Mar 21, 2013 (7:35 am)
The problem with 3rd party warranties is that many are worthless, with bankrupt companies and refused claims too common. How to tell the 'good' ones from the 'bad' ones? Who knows!
Here's a good article in Car and Driver describing the problems:
Problems with warranties
#3150 of 3172 Re: 84-months? [jmardi]
Mar 22, 2013 (3:46 am)
If a buyer is worried about the reliablity of a vehicle to the point they think they require a costly extended service contract, perhaps they should not buy the vehicle. Rather, buy a vehicle with a stellar reliability record. As a further benefit those vehicles will have a higher resale value.
A third party extended service contract is like a bad gamble, even worse. People should consider those old US Fidelis commercials pitched by Rusty Wallace and research how people found the actual experience of dealing with Rusty and US Fidelis.
The reality is an extended service contract is rarely a good decision. For a limited number of people there may be a benefit. However, for the majority money spent on such a warranty is money wasted. There is a reason most independent experts, not those with ties to dealers, advise against such contracts.
If a person really wants an extended service contract, they should only buy it from the manufacturer. Any other source represents an unacceptable risk and most likely a waste of money.