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Is it worth getting an extended warranty on a mini...
# budgeting
b
Is it worth getting an extended warranty on a mini van simply bc of the sliding doors? It's a 2020 Honda odyssey so would be betting the doors need fixing within 8 years. Doesn't seem right
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m
No you shouldn't get it simply bc of the sliding doors. It should be for the overall car.
b
Right but the dealer is trying to tell me the doors make it worth it
2400 to be covered for 5 yrs
I'm not really buying it
m
An 8 year warranty should be worth it regardless of the doors.
b
And what about 5?
m
They don't offer 8?
b
I can ask, he just said 5
m
5 should be worth it, kal vechomer 8.
I go for the longest they let me.
I've seen my father rake in free repairs for over a decade on one car using his cars warranty.
If all you care about is the sliding doors, it's probably not worth it.
w
Maven Motors was going to replace a sliding door for us for ~800, so unless you expect them to totally break and need replacing 3 times, it's not worth it for the doors.
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b
6 yrs, up to 125k miles, $2800. Leaving out the doors, is that worth it?
@witty-engineer-80805 lol, he told me it could be between 1200-1800 to fix, and that's just an estimate. Go figure
I would also in general budget for maintenence so ya the doors prob shouldn't be a factor
t
Doesn't the car come with some warranty. What does this give you that you don't get included with the car purchase.
f
Vehicles are way more reliable today than in the past. In general in you should only insure for catastrophic events. Meaning for things that you couldn't afford if you lost them. Finally, don't think you can win against actuaries. These warranties are designed to cost the insured more than the payouts will do. You are more likely to lose on it than gain if you need it for a catastrophic reasons, but it might still be worth it. But purely as a play to save money, it's very likely isn't.
Besides, a broken sliding door repair can often cost a lot less. Not every time does it necessitate replacement.
w
Yeah, we had repairs done that were ~$200. Even full replacement was only going to be $800.
m
I’m probably overly conservative, but I really don’t like surprise bills, so i buy 8 year extended warranties
b
He only offered up to 6. At that point anyway the car should be paid off so if I'm worried about anything big I can put away more money for surprises.
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It sounds like the doors are for sure not worth it, thanks for the input.
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@thankful-raincoat-91160 I think Honda is 3yr/36k but I'm not sure if there are still things covered past that. I've also heard it's hard to actually get reimbursed for warranties but I don't know how accurate that is.
m
I’ve certainly seen it used a lot
b
You mean you've seen the warranty being used? And for how much would you say is average?
Meaning are they repairs worth the cost of the warranty as opposed to just setting the money aside
m
I certainly don’t have enough data to be statistically significant, but I definitely see people using it for 10k repairs (drive train)
or electronics failing (which is happening more and more with the smartifying of our cars)
b
Right I guess the question is if it's worth the ~3k
m
If a cost benefit analysis. If it wasn’t, insurance wouldn’t exist lol
b
Right. Can't say I'd like to be hit with a 10k expense but I'm also not sure it's worth it
Thanks for the input, definitely cleared things up about the doors. And I'm pretty sure the drive train is covered for a longer period
m
its the period that it isn’t covered for that is the period most likely to go 😉
b
lol very true
But it's a very slim difference
It's covered up to 5yrs/60k miles
f
There's insurance and there's "insurance". This falls into the latter camp. Similar to package insurance. Imagine you're a large volume shipper. Purchasing such insurance pretty much guarantees that you'll pay out in premiums more than you take in with claims. Real insurance is for peace of mind, not financial arbitrage.
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b
The warranty is 6yrs
Ya maybe if I find an 8yr warranty it will be worth it
But 6 doesn't sound like it
f
Also, you can invest the premiums,. So you also need to factor in the time value of this money. 🙂
b
Correct, I'd probably do that as well
I know this is getting into #investing but what would you invest money into for something like this? I.e. possible expensive repairs 5-10 years down the line
I can just stick 3k into some type of investment
f
These days a money market fund would do just fine.
b
Ok sounds good thanks
m
FDIC insured accounts at over 5 percent today so you'll be set.
b
You mean at a regular bank? Or online? I have money in a money market fund, I'm not familiar with the high yield bank accounts.
m
My m1 high yield savings account is paying 5 percent. My Marcus cd is paying even more.
Both are insured accounts.
b
Ok I'll look into those, thanks
t
Warranty insurance is very profitable for insurance companies, and that's after we pay all of our expenses. I'd say that the losses (for a type of warranty) are almost always below 60% the premium.
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n
Also, depending on the problem (and the type of person), some repairs aren't worth doing, but would of course be done with a warranty, giving the illusion of "good value." E.g., my car's seat belt light is often on even though I'm always seatbelted. I don't care, so I save money 😀
f
Fyi dealers repair are very expensive , 2nd I would take everything he says with a grain of of salt
a
I wouldn't assume you'll have issues with the doors. In my experience with the Honda Odyssey they've help up (2002 lasted 16 years, 2012 still going...) Sounds like he's trying to sell you something...
b
Ya one example he gave me was someone who used xm radio and got the whole thing replaced. In terms of the doors, both my parents vans have/had issues but I don't think that was after many years, prob past the lifetime of this warranty. I will say though that frum kids do put a strain on van doors lol. Prob still not worth it but something to consider. My wife would also prefer we don't have too many things with the car that we just don't want to pay to fix but I doubt that stuff can't be covered by simple budgeting for auto repairs.
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