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Smart Shopper Extended Warranties
2870 messages, Last post on Nov 23, 2009 at 4:56 PM
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Edmunds article: Third-Party Extended Warranty Scams
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Not saying that all TPA's are better than the factory, but I know for a fact there are a few that are better and offer more benefit. Don't be fooled by the fact that "Mitsubishi, Kia, or Mazda" is at the top of the contract, 99% of the times, the administration and claims adjudication is done by a contracted 3rd party. They just answer the phones on behalf of the factory! Warranty Gold is backed by a Risk Retention Group. These companies are not regulated by any government agency....NONE. That is what NWIC is, a Risk Retention Company. The majority of dealers use Reputable companies, (CNA, JM&A, Protective, Universal Underwriters, APCO) these companies have Fully insured liability policies backing the obligations of the agreement. EXACTLY like the factory plans. These programs have to be filed and approved by each state department of insurance. They all have federally protected "Guaranty Funds" if they become insolvent, which pays all claims for the consumer. (Example, Reliance insurance 1998) You keep quoting the example of Warranty Gold/Capital Assurance, these companies have no liability policies backing performance, they have stop loss or excess of loss protection, which means the TPA not the insurance company is holding the funds for future claims. The bottom line, many manufacturer plans, and reputable insurance products exist, the customers should research these products and find out about the company they are being presented. The examples I used above all have AM BEST ratings of A- or Better, and are endorsed by GM,FORD, and Chrysler Financial Corporations. NWIC lost its endorsement in NOV because of it's insolvency. People who finance car loans and supplemental products are actually smart! Why would you not borrow 1000-$2000 at 0% interest rather than take $1000 of your hard earned money and set it aside for 5 years and ABSOLUTELY NOT TOUCH IT. Most people on a budget can't do it or afford to do it, that's why it makes sense! $1000 at 5% for 5 years is only $1276. Most major repairs occur past 36/36 (ie. A/C, engine, trans, or drive axles) and average $1800 - $2600, and that's using today's money! It doesn't make sense! You can make an argument that the "warranty gold's" of the world ruin this type of product and everyone should run for the hills. Truth is, the majority of people who buy New and Used cars need some form of protection when the Factory warranty runs out. Last year nearly 7 million service agreements/contracts were sold in the US. This is spread both between Factory and Independents.... If these products are so unscrupulous and always screw the customers, why has the federal/State/and local governments allowed them to be sold for nearly 30 years? My advice to a conusmer would be to research the company that backs/insures the product. Only buy coverage and terms that will suit your personal needs. Shop around to get the best deal! Most often, its at the dealer you buy from, they have millions of dollars riding on their reputation, and future viability because of CSI. The likelihood of a customer getting screwed is less and less because of resources like this chat room and websites....
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Why not just buy Toyota quality and forget about extended warranties? Will the many lengthy extended warranties bankrupt Kia, Hyundai, Dodge, Jeep, and Chrysler when their vehicles fall apart long before the 100,000 or 70,000 miles? One possible scenario is that the disgruntled owners will get too annoyed with the frequent trips in to get one of these vehicles repaired that they will decide to dump the unreliable brand and get a Toyota where they do not need the extended warranty. Of what value is an extended warranty if a person is spending too many valuable hours taking their vehicle to the dealer to get it fixed?
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your enthusiasm for Toyota products, and hope you've never had any trouble with yours, bear in mind that Toyota is the brand I see more (in my lemon law cases) than any other Japanese brand. autoxpert - my screen name is zueslewis, taken from my first e-mail address (ever), which was named after my German Shepard (now passed), my best buddy for 12 years. I, unlike you, have no "God" complex. I deal with warranty/manufacturer liabilty every day. I could care less if the GMPP CEO writes checks out of his own account to cover repairs, my issue is who is liable, not who is backing the money. Only the manufacturer can be held liable for any aspects of warranty (in legal terms) on a vehicle. With a private company sponsoring a service contract, they have NO liability under the law to honor the "warranty" of the actual vehicle, which is described as "warranty of merchantability" - that is the concept under which breach of warranty cases are prosecuted - as violations of both the Uniform Commercial Code and the Unfair Trade Practices Act. Aside from the legal issues pertaining to private service contracts, there are many more issues that should sway an educated consumer away from private companies, like pre-authorization requirements, pre-payment for repairs in many cases, a week or more waiting on a adjuster to inspect the vehicle before parts can even be ordered, etc. There are several more disadvantages, if you'd like me to explain further. If it is your sole purpose to come here a try to sell private warranties like a travelling vacuum cleaner salesman, this is not the place to do it. Also, there is no need to attempt to discredit me or anyone else. I've sold over 7,000 extended service contracts (factory and private), administered them as a service manager, and now I've investigated their breaches as a consumer fraud investigator. Your facts are very skewed, and your attitude is hostile - both are unnecessary. |
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Do you see more Toyotas than any other Japanese brands because there are so many more Toyota vehicles sold in the USA than any other Japanese brand? Which Toyota models seem to be more prone to have a lemon (Tundra, ECHO, Tacoma, etc )? Do Toyota problems tend to be major mechanical like engine / transmission or accessories like power windows, power door locks, radios, etc.? Thanks for your assistance. |
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Toyota definitely produces lots of vehicles, but so does Honda, and I very rarely see Honda vehicles at all. Most of the problems are not from trucks (I've only seen one Tundra, and that was owner neglect, case got nixed; 2 Tacomas for engine management issues; and 1 Rav4 for fuel system problems). Mostly, I see Camrys, Siennas and Previas (older, but lower-miled Previas) for engine management system problems, usually dealing with the engines acting up and multiple PCM and sensor replacements (usually causes drivability problems). |
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| I purchased a '99 Aurora last summer still under factory warranty. After researching that car, on Edmunds board, the consensus from the owners was that a good extended warranty would pay off for this vehicle. 30 days before my factory warranty expired I purchased an exclusionary plan that lists what is excluded - vs. one that lists what is included. I paid $1289 for this piece of mind. Two weeks ago, I encountered a $546 electrical problem that Warrantybynet promptly paid by credit card to the dealer without a hitch. The dealer service manager informed me that there were no problems with working with them. I think a warranty makes sense if the auto you are purchasing is prone to expensive repairs and if you plan on keeping the vehicle and "drive the wheels off it". | |
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Good information. Guess I have been lucky with the Toyota brand although I have not owned a Camry, Sienna, or Previa. Perhaps my luck also is related to buying Toyota before the newer type engine fuel management systems were incorporated. Based on your information, other data in Town Hall, and a most distasteful experience the last time I went to look at 2004 Siennas, the Odyssey has moved ahead of the Sienna for my preference if I get a minivan. |
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I prefer the previous body style over the '04 - the '04 looks like a Camry with a glandular problem, no offense intended. I saw a few Odesseys ('99-00 models), but rarely see them now, if at all. |
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