Third Party Warranties
Bjorn tells us exactly why we shouldn’t purchase any third-party warranties. Read it, it could save you a few bucks.
Remember, I do this to entertain me, not you.
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March 23rd, 2004 at 12:19 pm
In many states, regulators regard third-party “warranties” as insurance policies under another name. I would call the DOI to see what tehy think about this, maybe they can bust these guys for running an illegal, unlicensed insurance company. If so, that will give them a paper trail that will make their next scam more difficult.
Generally, I avoid extended warranties, period. Whether first party or third party, they are almost never worth what they charge. As with anything else, if you can afford the risk of loss, the best economical decision is to bear it, rather than pay someone else enough money to allow him to cover the risk and make a profit to boot. But if the risk is too high (e.g., a house), the next best thing is to shop the market for a legitimate insurance product. Insurance companies have to justify the rates they charge to the DOI. Dealers can charge whatever they want, so they do.
March 23rd, 2004 at 1:13 pm
Usually I agree, but at the time, buying the warranty for a car that was no coubt going to need it seemed like a good idea. This was the first venture away from Honda I’ve made in ten years and probably the last. I traded the Olds for an Acura. In the case of a Honda, a warranty is unnecessary. In the case of the Olds, it was inevitable something was going to break, which it did. If I can ever get them to pay the claims, I’ll have saved $1000 in repairs. Instead, I’ll probably lose. Many people have lost more in Vegas with worse odds. Heh…
March 23rd, 2004 at 5:43 pm
I agree with XRLQ..only buy insurance on stuff that you can’t afford to replace if it breaks like your house. And at that, take the highest deductible that you could afford to pay out of pocket. Sames goes for health and auto insurance. Over the course of your entire life, you will come out ahead.