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Extended Warranty to the Rescue!!!


Back when we bought our new-to-us (then only 1-year-old) car, we added all the warranties on top of the sales price and financed it all together.

Remember, this was back before any debt-reduction mission or such. After listening to Dave Ramsey, I’ve now learned that the majority of extended warranties are a total waste of money (disclaimer: I don’t blindly believe everything Ramsey says, but I do believe this one).

Even so, when we finally paid off the car this past January I never took any steps to cancel the extended warranty so I could be reimbursed for the pricey policy. I just paid it off and went on about my life.

Fast forward to this month. Out of nowhere, we’ve experienced some random electrical issues. Unfortunately, a lot of the car’s displays are electronic. At this point, the entire dash is out. That means I cannot control A/C, we have no radio, there’s no time display, no backup camera, and more. Though most of it is just an inconvenience, some of it actually poses health and safety hazards. For instance, I’ve been driving my girls around this week and they’re crying in the backseat that they’re all sweaty (here in Tucson we’re still over 100 degrees every day). The A/C was on when the dash electronics went out, but it was set to low. Without the electric display, I have no way to change the A/C to be higher or lower and the heat is so all-encompassing that it literally feels borderline-dangerous to be driving the kiddos around without proper air.

After calling a couple shops and discovering that this is most likely a dealership issue (= $$$), I remembered that we had bought an extended warranty that specifically covers the electrical components on the vehicle.

“There’s no way the warranty is still effective”, I thought. We’ve owned the car for just at 3 years now, but we’ve already hit over 100,000 miles. I was imagining the warranty was probably nullified right around the 3-year and 100,000 mile mark.

So, imagine my surprise (and joy!) when I called and discovered that the extended warranty actually covers up to 5 years or 125,000 miles!!! We’re still under warranty, baby!!!

The other issue is that when I was calling around to shops, I was not only stressed about the money, but also the logistics. From what I was told, vehicle electrical work can take quite awhile. So either I’m stuck at the mechanics shop all day, or they can bring me back to my house. But that means it has to be a day we have the babysitter (because they can’t transport me + 2 kids in carseats). However, I’ve already determined that it’s tough to work while the kids are at home. So…stuck at the mechanics shop, then?  I know this is total 1st world problems and not really a big deal, but these are the logistics I’m grappling with. HOWEVER, our extended warranty (purchased through CarMax) includes FREE LOANER CAR while they’re doing the repair work!!!

They’ve said they may need to send the car to the dealership (which sounds likely after speaking to several local mechanics shops), but either way CarMax still provides me with a loaner. PLUS, I’ve had 2 recall-related issues pop up within the past few months that I’ve been putting off forever. So I can actually get those issues handled as well. All for $0 out-of-pocket.

My appointment is scheduled for next Thursday so I still don’t know the full amount of time it will take or even the full scope of what the issue is and what needs to be done to repair it. I’m just happy that this dumb (and super $$$) extended warranty is coming in handy! And, I may be wrong, but I believe I could still cancel at any time and receive a partial reimbursement for whatever time is remaining in the warranty. So there’s a chance I may get this stuff taken care of, then cancel the warranty in a month or so, and still end up with money leftover! I don’t want to get my hopes up (because I don’t know for sure if they’ll do partial reimbursements), but it’s an exciting prospect.

Three cheers for an extended warranty that actually came in handy and hopefully saves us some money!

What are your thoughts on extended warranties? Do you buy them? Why or why not?


  • Reply Nicole |

    I’m in the Dave Ramsey camp – absolutely, positively against buying warranties. That said, I just bought one LOL. My boyfriend and I just bought a brand new, expensive pickup truck. We plan to keep it for a very long time (he purchased his last truck at 1 year old, and kept it the past 17 years). As you’ve seen, there are so many electrical components in vehicles these days that repairs get pricey fast. The vehicle I traded in was 8 years old with only 59,000 miles, but was on the verge of needing several costly repairs (actually mechanical, not electronics). Knowing how well I treated that car, but that it still faced repairs that rivaled (or probably exceeded) the cost of our 10 year warranty on the truck, we took the leap. We rolled it into the loan at a great rate, and now have peace of mind for 10 years that the truck should not cost us anything other than normal use expenses.

    There’s a lump in my throat on saying “loan” too. I am also strongly in the anti-debt camp and believe any new vehicle should be paid for in cash! My boyfriend agrees in theory but I’m still working on him (when I talk about it too much he says “Ok Dad” 😉 My portion of the truck is paid for, the loan is his.

    Glad the warranty is paying off for you! Woohoo! Depending on the amount you could potentially be refunded and what this repair is, you might want to think about keeping it. Never know if it could come in handy again (if the amount you’d be refunded is pretty small)

  • Reply Kathryn |

    Huge fan of the extended warranty. Unlike vehicles and appliance made 30-50 years ago newer models seem built to fail. Back in the 90’s we leased a new vehicle (before we knew better) we ended up buying the vehicle cheaply after the lease expired and through a 3rd party bought a warranty. Just a few miles shy of 75k miles, just before the warranty expired, the transmission gave out – it was fully covered. Since then we have bought (and used numerous times) warranties for appliances such as dishwashers, washing machines and dryers. I am very sad that we were unable to buy an extended warranty for our glass top stove, one of the knobs is broken and I need someone to come out to fix it. We live in a rural area so we have travel expenses in addition to repair charges if we are not under warranty. My husband bought a new truck in November of 2014 and I purchased my vehicle in July of 2015. While signing the paperwork for my vehicle we were offered an extended warranty covering everything from electrical to oil changes and new windshield wipers every six months. We were able to add on the same coverage for his vehicle retroactively. Additionally, we would be given a loaner car for free while our vehicles were being maintained/repaired. The cost over the life of the warranty was about equal to what we would pay if we went to the dealership for routine oil changes. Given the fact that we plan to drive these vehicles until they die and the maintenance is prepaid we will recover the cost of the extended warranties while extending the life of our vehicles since we receive both email and paper reminders of covered maintenance.

  • Reply Lisa Wilcox |

    I believe that for some things the warranties are worth it and some not. Our new to us car had a bunch of work done for nothing out of pocket because of the warranty. We also purchase warranties on computers and tablets for our children…even the teens. We had a Kindle replaced twice, another once, and a computer fixed.

  • Reply Miranda |

    I never buy extended warranties, usually I’d rather just replace it. I feel like if it’s a product that is going to fail that quickly I don’t really want it anyway. I do intentionally look for products that have long warranties on their own though, just to be safe. I’ve noticed the products that offer you a 5 year or 10 year warranty tend to actually need the warranty less, at least in my own experiences. I would probably give it more consideration for a vehicle though. I’m a huge fan of buying new vehicles whenever possible, the extra cost is worth the peace of mind for me knowing it will be reliable and that it’s someone else’s cost if something goes wrong. I’ve spent a lot of money and stress repairing older vehicles that just weren’t going to last, I’m finally at the point where it just isn’t worth it for us. I really need maintenance costs to be someone else’s problem one way or another 🙂

  • Reply Taira |

    I used to agree with the no extended warranty ideology, but I had to buy a new fridge that matched the existing appliances and it cost a small fortune. I was offered the warranty and it was $80 for 5 years. That fridge has been replaced 3 times in 6 years, every time I have been offered the warranty again. At this point it works out that each fridge cost me $40 instead of the $1800 for a new one. Well worth the cost of that extended warranty.

    • Reply Ashley |

      Wow, that’s nuts! Is there some manufacturing issue with that model of refrigerator? I just don’t understand why it needed to be replaced so frequently? What a huge pain! But, definitely lucky to have the replacements covered under warranty!

  • Reply Maureen |

    Warranties can make sense in certain circumstances. A car that you intend to keep for a long time or one that is going to be costly for parts and labor might make it worth a long term/high mileage warranty. We bought a 2015 BMW X3 and the tires are extremely expensive to replace/repair. Part of our warranty package (which we paid extra for) was for complete tire replacement/repair for 6 years/XXX miles. I live in Cook County, IL (Chicago suburbs). Our roads are horrible and littered with potholes. We have used it twice already in the first 2 years we have owned the car. In our case just based on local, the warranty made sense.

    On things like expensive appliance and televisions, IMHO the warranty is going to be hit or miss. If you can get it cheap, it might be worth the investment. A warranty is offered on virtually everything these days for an extra cost. Have you ever shopped at Best Buy? 90% of the time it is just not worth it (who needs a warranty on a small shredder)? But, the other category that I have found warranties useful for and used extensively is for any Apple product. The Apple Care product extended warranties are the best. When I spend $2500 on a MacBook I want to know that it is covered (except for personal incurred damage) for the next 3 years. For a minimal charge ($200 in relation to the cost of the computer) I have been able to get my laptop serviced and no charge to the tune of several thousand dollars of repairs of the last few years.

  • Reply Jean |

    I think Dave Ramsey (and Clark Howard) may need to rethink their views on warranties. With so many electronic components in vehicles and appliances these days, replacing/repairing said components (or even the entire vehicle or appliance) could cost you WAY more than the warranty. My car is 13 years old, 232K miles so when I get a new car the whole electronic thing will be new to me! I rented a car for work a few weeks ago & now have new car envy but can’t justify getting a new car when I still get 30 MPG on long road trips. But when I DO get a new car (or new appliances) I will definitely consider it more than I have in the past.

  • Reply Sheila |

    I would love to hear more about getting reimbursed for a warranty policy. I have never heard of this before. We recently bought a new (to us) car, and my husband bought the extended warranty, although I didn’t want it. I already regret it. I feel it was a bunch of money that we just didn’t need to spend. We do have a loan on the car (ugh). So what is this information about getting reimbursed for a warranty after it is paid off? Can someone please enlighten me on this?

    • Reply Ashley |

      My understanding (though I’m sure it’s different for every company/situation) is that you can cancel your extended warranty policy at any time and receive a prorated refund for the amount of time you still had left on the warranty. You should call whomever your warranty policy is through to check with them.

So, what do you think ?