I've worked in the repair business for a number of years. I have quite a bit
of experience with these warranties. Here are my thoughts:

The extended warranty is basically an insurance policy; you are betting the
car will break and the warranty company is betting that it won't.
Unfortunately, the warranty folks hold a few more cards. There is a LOT of
fine print and exclusions. Because of this there are many, many ways for
them to get out of paying.

There is little to no brand awareness in the extended warranty business.
Probably 99% of people that have an extended warranty can't tell you the
name of the warranty company. In fact, most of them think it is the dealer
(or other seller) that is actually making the warranty. This is untrue. The
dealer is simply acting as a sales agent. Because of the lack of brand
awareness, there is little incentive for the warranty company to make you
happy (pay out money for claims). You, as the consumer, hardly know who they
are and probably won't seek out their specific product the next time you are
in the market for an extended warranty (remember, you probably don't even
know their name).

I once had a customer that had a problem with his starter. The outer housing
had cracked. Before any repairs could be made I had to get authorization
from the warranty company. I explained the problem to them. They said they
would not cover the repair. Their reasoning: although the starter itself was
covered under the warranty, the starter housing was not covered! Have you
ever bought a starter that didn't come in some sort of housing or case?
After a bit of ugliness they finally did decide to pay, but it wasn't easy.

Long story short: the warranty company has no incentive to pay your claim.
Their primary activity is finding ways out of paying claims so they can keep
the money. Do you want to buy a product like this now?

Bruce

>From: Matthew Libby <MLibby1@CFL.RR.COM>
>Reply-To: Matthew Libby <MLibby1@CFL.RR.COM>
>To: vanagon@GERRY.VANAGON.COM
>Subject: Warranties
>Date: Mon, 22 Jul 2002 01:07:52 -0400
>
>Anyone have any experience with used car warranties?  Are they available?
>Are they worth it?  Thanks!!!
>
>Matt

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