The YouTube experts (the infamous Dave Ramsey) tell me to never buy an extended warranty. Are they right?
In any case, a short and persuasive argument.
Depends what you’re buying. Finance managers always mark them up and most factory backed coverage can be bought on the internet at cost or you can get the price for the dealer to match and roll into financing.
I’ve done it multiple times and glad I did even just for peace of mind.
Do you need an aftermarket warranty on a 25k mile 4-year old Toyota Corolla? Probably not.
Should you get one for a 4 year old Land Rover with 70k miles? Absolutely, would recommend.
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unless you receive a phone call about it
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This is the crux of listening to someone like Dave Ramsey… there is absolutely no nuance in his suggestions.
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If you need Dave Ramsey, then buying a LR means you arent listening to him.
Theres a youtube guy Hoovie (err Doug Demuro)? Who used to buy RRs from Carmax and ALWAYS bought the warranty and cost carmax so much money they specifically excluded LR and RR from it
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bUmPeR tO BuMpEr
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My good friend was sold extended warranty ( service contract) for his Mazda 3 when purchasing it off of his lease. I had scolded him at the time. A year later his transmission quit and warranty picked up the bill for a refurb unit at the dealer.
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If you are not self insured to cover the risk if things go south, then you may need to buy an extended warranty. Last year, we had two separate repairs for our Honda Accord within 4 months timeframe, those repair bills ran almost $4000 plus also paid $1000 for the new tires. After the 2nd repair event within 4 months, I sold that car for $5k and buy the new one and decided not to keep the car beyond manufacture warranty terms.
I’m old enough to know people are confusing hoovie with Doug demuro.
Doug Demuro (jalopnik/autotrader) made the videos on YouTube after he bought a Range Rover and listed all the warranty repairs. Accumulated to 15k.
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But was the bill for the tranny LESS than the price of the warranty. 
Without going back through all the articles and videos, I recall he paid way more than he would have if he had bought the car private party. He still came out since he could amortize the repair costs in a loan but its not like those 15K in warranty claims were free. He paid for much of it in the inflated price of the vehicle.
But in general I think extended warranties if bought from the lowest cost seller (not at the dealership when you are waiting on them to run your credit) are fine. What no one has mentioned is that you need to keep the car long term. It is a terrible idea if you buy it at time of purchase and then sell car two years later with 12 or 24 months of manufacture warranty remaining.
Most warranties can also be returned with a pro-rated refund. Make sure to do that if you sell your car prior to the term ending.
Carmax brought back the extended bumper-to-bumper warranties for most vehicles. They just stopped selling the very high risk cars… although, I do see some listed that would scare me.
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I believe they vary the cost of the warranty depending on the car. That same Range Rover would now have a warranty costing 8k or higher.
Depends on:
- The price you’re paying for the extended warranty.
- What it covers.
- How reliable the make & model is.
- What your risk tolerance is
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Depends!!!
For Stellantis, it’s a no brainer to get Mopar maxcare. You can get like 8 year, 75,000 or 100,000 miles comprehensive, $0 or $100 deductible for about $1500-$2000. There are certain dealers who sell for just slightly above their cost.
I looked into this before they raised the price of their warranties and came to the same conclusion. Even before the hike, the sum of their vehicle price + warranty just didn’t make sense to me.
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Maxcare prices are actually pretty cheap compared to comparable exclusionary warranties. My latest data point on the Carmax 2017 Panamera 4S (w/ 45k miles) I briefly had was $3760 for 60mo, odo 100k miles, $500 deductible.
Compared to Fidelity Platinum for the same coverage (last line):
I think Carmax is incentivizing the warranties. Probably offset the high risk cars with people that buy them for 2021 Corollas with 6k miles
Also, make sure to know the different types of warranties. The best are exclusionary policies, where everything is covered unless its listed as an “Excluded item”. Non-Exclusionary polices (which tend to be cheaper) will only cover certain listed items.