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Are car warranties a wise investment?

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I mentioned recently that I purchased Princess a car. And I am very pleased with it. (She is too.) But boy, that experience was so stressful. Let me give you the short version.

Right around her 18th birthday, I found an AMAZING deal on a Honda Civic on Carvana. It wasn’t a “Carvana” car evidently but from one of their partners. (I’m not sure if this is the right terminology.) But they said they could deliver it on her birthday so I bit the bullet and purchased it.

I set up a birthday lunch with the family and some of her friends and was so excited to do this.

Her Birthday

HOURS before it was to be delivered. After over a month of waiting for the day to arrive. They sent me a message that it was delayed. So I printed some pictures to give her at the birthday lunch and as disappointed as I was, I figured another week’s wait was worth it.

Delivery Day

Then a day before the now rescheduled delivery date…they called again and said it would be delayed another MONTH! What!!! I was so mad. And she was so sad. Their explanation, well, frankly, it didn’t ring true to me at all. I cancelled the order.

The Perfect Car

I got online and started the search again. Thankfully, it didn’t take long to find another car. It was the killer deal that I thought we had found. But it is a great car.

Now the real question…care warranties? Thoughts?

I ended up purchasing a 5 year/100,000 mile extended warranty for the car from CarMax. Essentially if anything goes wrong mechanically during the warranty period, she just has to take it to a Honda certified mechanic (dealership, etc.) and pay a $50 “co-pay” for it to be fixed. It cost about $1,300. And Princess has been told that any repairs, etc. going forward are her responsibility.

And in this case, it has already paid for itself…her A/C condenser went out over the summer, around an $800 repair. (I know this because I had to replace mine this summer too and I didn’t have a warranty.) She paid $50.

So what do you think? Extended warranty or no? It was my first time ever doing it. And I really only did it because I wanted any repairs to be within reach for my “broke” college student over the next few years.


5 Comments

  • Reply Anonymous |

    I’ve read some awful things about Carvana. Worse than delayed shipping, they are jumping title, people are having trouble registering their vehicles properly, they arent delivering cars as promised (a ton of damage or issues are undisclosed). Maybe you dodged a bullet.

  • Reply jj |

    That sounds good in theory – I think time will tell if it benefits her in the long run – but a $50 co pay per fix sounds good?!

  • Reply Kili |

    Off Topic: Can the owners of this blog please approve international comments again?

  • Reply Angie |

    I hope you have your receipts! A quick google shows that there is an extended warranty for most newer Honda AC compressors because they are prematurely failing. I think both your repairs could have been covered by Honda.

    As far as extended warranties, as you expect the insurance companies are smart. Actuaries are precisely calculating the risk and cost of repairs (plus some middleman and wiggle room) to determine the price of the warranty. So really I see it as a gamble. You could end up being on the side where it pays off or you could never use it at all. You’re essentially paying up front for repairs and letting the insurance company invest your money in the mean time.

    • Reply Hope |

      Now, this, I will definitely have to check out. I got it done at a dealership, and one I trust as far as mechanics go. Surely, they should have known about the extended warranty.

So, what do you think ?