Mary and I recently bought a used car. It's a 2008 Nissan Versa hatchback. It replaces our 1996 Ford Contour, which gave up the ghost one night while I was driving home from class; I was lucky to make it home that night.
Since buying the car in mid-April, we have been flooded with offers for extended warranties from third-party companies. Three (!) came in the mail today. Each attempts to play upon our fears of a catastrophic vehicle failure that could bankrupt us. "You can't afford to be without coverage!" one reads in bold print. Now that the factory warranty has expired, are Mary and I going to fork over money for an additional warranty? Most assuredly not...
Extended warranties are a sucker's bet, according to Consumer Reports magazine. The plans, they write, can cost hundreds of dollars to several thousand. And, their investigation found, third-party extended warranty plans "typically contain fine print that providers can use to deny claims."
As I write this I am flashing back to the day we picked up the Nissan at the dealership. Before we could leave we had to get a visit from the "delivery coordinator." Her job, as best I could tell, was not to deliver the car, but to push every extra protection package the dealer sold: coverage for the upholstery, special treatments for the dashboard and the paint, the extended warranty on the engine. Total cost for the works: $2,000. It was a 15 minute pitch. I felt bad shooting down the sales rep so abruptly, but I had to. I have always said no to extended warranties, because...
...most are not worth the money. So says Consumer Reports.
By the way, the Consumer Reports investigation applies to more than just third-party vehicle extended warranties. They also recommend against extended coverage on appliances and electronics, as well.
Further reading:
www.consumerreports.org/cro/extended-warranties/buying-guide.htm
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