An Extended Car Warranty Is Probably Not Worth The Cost
Back in December 2016, I decided to purchase a 2015 Range Rover Sport with just 10,800 miles on it, upgrading from a Honda Fit due to our expanding family. Today, this car shows 52,500 miles on the odometer. At the time of purchase, I was offered an extended warranty that covered seven years or up to 100,000 miles for $4,500 without a deductible, or $2,500 with a $1,000 deductible. I chose to skip the extended warranty because the car was nearly new and still covered under the original manufacturer’s warranty, which lasted until July 2019.
Given Land Rover’s reputation for low reliability, one might think an extended warranty would be a good investment. However, let’s evaluate the actual costs I’ve faced and compare them to the potential benefits of the extended warranty.
Maintenance Costs Breakdown
The first major repair occurred shortly after the original warranty expired, costing $700 to replace a malfunctioning fan. In June 2023, a leaking water pump, which is a common issue with European cars, set me back another $1,200 after including a coolant system flush. Early in 2024, I faced a $1,050 bill due to a faulty vacuum pump and a PCV valve replacement. Altogether, excluding routine maintenance like oil changes, tires, and brakes, I’ve spent $2,950 on repairs over seven years and two months.
When adding costs for tires, brakes, and oil, the expenses increase by about $3,800. Despite these costs, the total spent remains significantly less than the $4,500 I would have paid for the warranty with no deductible, and still less than the $2,500 warranty with a deductible after considering the $1,000 out-of-pocket for the water pump under the deductible scenario.
Inconvenience and Dealer Repairs
Choosing not to purchase the extended warranty also meant I avoided the inconvenience of dealing with dealer repairs. The Land Rover dealership is not conveniently located near my home, making it impractical to get repairs done there. Instead, I opted for a local shop within walking distance, which proved to be more convenient and likely cheaper than using a dealership and relying on Uber for rides.
Reflection on the Extended Warranty
Based on my experiences with two used Land Rovers over 20 years, I’ve concluded that an extended warranty is generally not a good financial decision. It’s better to perform a thorough pre-purchase inspection, keep detailed maintenance records, and find a reliable mechanic. While an extended warranty can provide peace of mind, especially for significant issues like engine failure, such severe problems are rare. Most issues tend to be regular wear and tear, which can be budgeted for more economically without a warranty.
Future Vehicle Plans
As my car approaches its ninth year, I’m considering replacing it by 2030 when it will be about 15 years old. This plan allows me to utilize the recent maintenance investments for as long as possible while avoiding the steep prices of new luxury vehicles, which are now often over $100,000.
In conclusion, the decision to skip the extended warranty saved me money and inconvenience, reinforcing the idea that such warranties are generally more beneficial to the sellers than to the consumers. It’s important to weigh the potential costs and benefits based on your specific circumstances, vehicle reliability, and usage patterns.
