Jwestpro
Explorer
because it came up in another forum and my mini rant should give good pause to many folks, not all, but most.
I'm going to use this opportunity for a mini-chat on cash flow
There are of course many factors that are different for everyone but if you could get coverage to 100k as well as a time frame that would be used in order for YOU to get it to 100k, then I'd consider the warranty with no deductible and only if it's under $5000.
The thing with many people and these extended warranties is people either blow through the miles too soon by racking up highway time (which is easier on all the systems) which then leaves them with paid time but no benefit. Then some people drive so few miles they never realize that potential for items typically going out close to 90-100k while hitting the end date before miles limit.
I was lucky to have a very good average miles/yr to rely on as well as a cheap enough warranty to make the math work almost without pause.
People often forget the cost of money out of service as well. For other people reading, consider if you have any debt and that cost annually, sometimes even monthly if it's higher interest such as a 12-24% credit card. If you elect to let go of $5000 on a warranty, 1st you have to get that much in coverage to even feel like you broke even, but it's not actually an "even" unless it occurs the next month or you have zero debt, zero. If your coverage doesn't occur say for a year, that's 1 yr lost for that $5000 to work in another way to save or make you $.
$5000 @ 12% interest like on a 'decent' credit card these days, or 24% on a bad one LOL costs $50-$100 / month to cover the interest.....
So with buying a warranty, at any point actually, you're taking a gamble AGAINST the house that you might just win and break even. You're actually hoping to at least BREAK EVEN LOL By you, I mean WE in the past I got lucky with the timing on mine and some insider knowledge that my rear diff was getting toasted towing a and there were a few other hints of it being a good idea plus the ability to exactly run up to 8yrs /100k. That timing hit within weeks for 100k and ending the warranty period!
So, a $5000 warranty costs you first the gamble you will at least break even, next it costs what any other debt costs because you're having to let that debt sit by having used $ from an apparently non-infinite budget.
Want to see how much a bad idea the expensive warranties over $5000 can be? Consider that right now you could search for a few weeks or less to find a decently maintained lr3 for not much more than the cost of that extended warranty.... hmmm, hope to break even on ******** falling apart on your lr4 when you could just buy an ENTIRE REPLACEMENT lr3 for roughly the same as the worst possible catastrophic lr4 repair....
Being your own 'warranty plan' is almost always the winning choice in the big picture.
Mini chat turned into mini rant is now over.
I'm going to use this opportunity for a mini-chat on cash flow
There are of course many factors that are different for everyone but if you could get coverage to 100k as well as a time frame that would be used in order for YOU to get it to 100k, then I'd consider the warranty with no deductible and only if it's under $5000.
The thing with many people and these extended warranties is people either blow through the miles too soon by racking up highway time (which is easier on all the systems) which then leaves them with paid time but no benefit. Then some people drive so few miles they never realize that potential for items typically going out close to 90-100k while hitting the end date before miles limit.
I was lucky to have a very good average miles/yr to rely on as well as a cheap enough warranty to make the math work almost without pause.
People often forget the cost of money out of service as well. For other people reading, consider if you have any debt and that cost annually, sometimes even monthly if it's higher interest such as a 12-24% credit card. If you elect to let go of $5000 on a warranty, 1st you have to get that much in coverage to even feel like you broke even, but it's not actually an "even" unless it occurs the next month or you have zero debt, zero. If your coverage doesn't occur say for a year, that's 1 yr lost for that $5000 to work in another way to save or make you $.
$5000 @ 12% interest like on a 'decent' credit card these days, or 24% on a bad one LOL costs $50-$100 / month to cover the interest.....
So with buying a warranty, at any point actually, you're taking a gamble AGAINST the house that you might just win and break even. You're actually hoping to at least BREAK EVEN LOL By you, I mean WE in the past
I got lucky with the timing on mine and some insider knowledge that my rear diff was getting toasted towing a and there were a few other hints of it being a good idea plus the ability to exactly run up to 8yrs /100k. That timing hit within weeks for 100k and ending the warranty period!So, a $5000 warranty costs you first the gamble you will at least break even, next it costs what any other debt costs because you're having to let that debt sit by having used $ from an apparently non-infinite budget.
Want to see how much a bad idea the expensive warranties over $5000 can be? Consider that right now you could search for a few weeks or less to find a decently maintained lr3 for not much more than the cost of that extended warranty.... hmmm, hope to break even on ******** falling apart on your lr4 when you could just buy an ENTIRE REPLACEMENT lr3 for roughly the same as the worst possible catastrophic lr4 repair....
Being your own 'warranty plan' is almost always the winning choice in the big picture.
Mini chat turned into mini rant is now over.
