2 years passed, good thing I didn't get extended warranty!

[phil47]

I originally extended my warranty by 2 years (to 6 years total) for around $2500, and am now almost off the warranty. Ended up getting around $2700 worth of work covered but paid a $200 deductible 3 times so came out around $400 behind. To me that was well worth the "peace of mind".

I just purchased a new vehicle (2011 Audi S4) and was considering selling the X5 but have decided to hang on to it for another 2 years...such a great vehicle, couldn't stand to sell it. I have again extended the warranty for another 2 years (Coverage One "Platinum") and will be paying $2400 with a $200 deductible. With the years and KMs starting to build, I may come out on top this time...but I'd be OK if I never had to use it

[sprocket1200]

guys, don't forget to include the opportunity cost of the money that you spent. at 10% you could have had an extra $1,000 over those 3 years that you gave up...

I like to self insure on the smaller things, but for large capital items or income protection I do insure.

[FSETH]

Originally Posted by JCL

But the fact of the matter is that most people will not come out ahead, as the insurance companies are making a profit just fine on these warranties.

You are right about that, but I made up for a couple of them with my share of warranty work. In 2007, we purchased our 2002 4.4i with about 60,000+/- miles and got a 3 year 30,000 (or 36,000, can't remember) mile warranty. I thought they were absolutely crazy offering me a warranty on a V8 X5 with that many miles for $1,800+/- and I was right. We had around $7,500 in repairs performed over the life of the warranty. There is just something about a BMW between 60,000 and 100,000 miles where everything seems to fall apart. I would take the warranty on a BMW with this mileage any day. Especially one with a V8.

[dragoncoach]

Originally Posted by sprocket1200

guys, don't forget to include the opportunity cost of the money that you spent. at 10% you could have had an extra $1,000 over those 3 years that you gave up...

I like to self insure on the smaller things, but for large capital items or income protection I do insure.

Wow, 10% return on my money? I'll invest in that. Returns that high over the last 3 years are rare. And, if you could find it, the risk factor would probably be quite high.

[sprocket1200]

Originally Posted by dragoncoach

Wow, 10% return on my money? I'll invest in that. Returns that high over the last 3 years are rare. And, if you could find it, the risk factor would probably be quite high.

nah, you just have to do your homework, and by no means would i 'bet the farm' an any single thing. any index fund would have given you these gains easily, as well as many stocks you may have heard of. how many examples would u like? businesses are created to make money, just find the ones that are strong and go for it...

[dragoncoach]

I know they're out there but I'm at the point in my life that I'm happy with 6%-7% steady return without very much risk. But, a diverse portfolio is important. Back to the point of warranties. If the car was Japanese, I wouldn't purchase one. However, being German and being prone to more and higher cost repairs, I would actually purchase one if available (but only backed by BMW). Third party warranty companies tend to go out of business without notice and should, for the most part, be avoided. I consider it peace of mind. Most of the time, things break or give out on a BMW and hopefully, the warranty will cover it. It's all a gamble and if it gives you a little peace of mind, why not? Sometimes it's worth it, sometimes not. A good indy helps a lot!

[Boston X5 4.4]

Buy low, sell high

Originally Posted by sprocket1200

nah, you just have to do your homework, and by no means would i 'bet the farm' an any single thing. any index fund would have given you these gains easily, as well as many stocks you may have heard of. how many examples would u like? businesses are created to make money, just find the ones that are strong and go for it...

[motordavid]

I had the Warranty Direct on our '01 X, and the X ran well, as I only 'recovered' about $500 of the $2Gs I paid way back when, for the coverage. I passed on re-newing, though our X is nearing 80k miles and getting into potential KaBoom! Land.

I had a 2 yr GMAC extended warranty on our '02 Vette; it too ran problem free, and I never got a penny out of that ext warranty. Passed on renewal, also.

I used to beat the drum here for 'extended warranties' of some kind, as I felt that safety net was absolutely necessary on these beasts. It may be still, for some.
Pick you poison & Good Luck...

OT...
I get a kick out of these 7% and 10% 'returns'...
Yes, individual stocks, or even ETF baskets, or most Indices have done very well since the floor of the bust, a few years ago. However, 2 1/2 years of Recovery & HappyTimes don't make anyone a 'great investor'.

I have several very smart, (and richer than I am), friends, but they all struggle chasing that 'magical return', even with their giant ego'd hedge fund handholders, the ones that get '2&20'. Real 'returns' of more than a few percent, in aggregate across one's portfolio, are very difficult over several years, or a decade or more...the stats from any 'starting point' of the past 30+ years, to now, tell the tale.

I have made the same proposal to every Svengali/investment guru I've bumped into over the past 35 years, I always ask this simple question:

"If you can guarantee me 3% NET, Net, net per annum, over the next decade, I will give you my entire portfolio. But, you must be willing to return that entire amount to me, or my estate, with that annual 3% N,N,n, after that period."

No one has ever taken me up on my proposal...that triple net is obviously after all taxes, Fed, state, and fees. Sounds easy to me, but of course it is not.

Keep funding your 'port', and remember the principal never sleeps, if done properly.
GL, mD

[phil47]

Originally Posted by dragoncoach

Wow, 10% return on my money? I'll invest in that. Returns that high over the last 3 years are rare. And, if you could find it, the risk factor would probably be quite high.

Exactly. I've got plenty of experience investing in a broad variety of equities and investment instruments. It's always easy to "look back" and discuss returns on investments, especially since the crash...the tough part is "looking forward" with any confidence. Common practice is to NPV using the current "risk free" return (more like 4%-5%) and then you need to consider taxes on investment income. 2 years on $2400 might "cost" me around $200. Yeah, they can have that too.

[sprocket1200]

Originally Posted by phil47

Exactly. I've got plenty of experience investing in a broad variety of equities and investment instruments. It's always easy to "look back" and discuss returns on investments, especially since the crash...the tough part is "looking forward" with any confidence. Common practice is to NPV using the current "risk free" return (more like 4%-5%) and then you need to consider taxes on investment income. 2 years on $2400 might "cost" me around $200. Yeah, they can have that too.

fair enough on the hindsight comment, but I was looking forward when i bought the investments. sure, not all of them pan out, but that is why not everything is in one basket.

besides, i'd rather invest in my time, tools, and abilities and use DIY as part of the guarantee to make these fine automobiles work.