Warranty deals - worthwhile?

[homer timpson]

Was pondering the merits of aftermarket warranty deals such as this Platinum Cover

For my 1999 S40 it would be £385 for 3 years or £155 for 12 months.

My timing belt is due next July [8 years or 80K] - it's at 64K at the mo - and I thought, if I took the 12 month option I'd have peace of mind until then + whatever else may spring up in between.

Is that crazy logic?

Should I simply pay the £200+ it will cost for the timing belt and have it done now?

Homer

[gnhuk]

I bought one with my car and then discovered that it actually covered very little and none of what I wanted to claim - never again...........

[volvobobbins]

Read the small print.Most cover is limited to specific items and subject to a host of do's and donts.:

[gnhuk]

I know - I didn't quite get the nuances of the wording......... but then again I work in IT rather than insurance.

A warranty is great for things that suddenly and catastrophically fail, the failure is obvious, and it's definitely not related to wear-and-tear.

But how many things do that on modern cars?!

Think about all those "intermittent" faults where you have to prove there's something wrong with it. Going to be hard to claim, right?
What about all those other "annoying" problems? For example, my radio reception is c**p. Imagine me trying to claim that under a warranty!

Then there's things like my S40s clutch. It's always juddery and harsh, usually in the morning. I'm convinced there is oil contamination, and according to my RAC gold-plated with bells on warranty I can claim for that. Easy claim huh? No.

My volvo guy says for any clutch claim they'd want to come and inspect everything. Then the fact of life is the clutch (like the rest of the car) has done 80k, so you're not exactly going to be able to claim there's no wear-and-tear involved. So no chance of claiming.

So, like any insurance policy, a warranty is calculated on risk. You've got to think of the risk, put your actuary hat on and work out a few probabilities.

- The chance of something really bad happening to the car is likely to be low.
- The cost of something really bad happening to the car is likely to be high.
- The warranty will pay for this cost if it happens. If it doesn't happen the warranty is money down the drain.

Try and do the maths for your particular vehicle, based on its condition etc., an estimate of costs if something bad went wrong and how much it would cost you to pay the warranty over this period.

But do remember one thing: insurance companies pay actuaries vast amounts of money (I know this, some of my rich friends are actuaries!) to calculate risk, and they set premiums in such a way that THEY will always make profit overall. So, given an infinite amount of time, you can be guaranteed that the cost of the warranty will vastly outweigh the cost it pays out to fix your car. Question is: who can say when or if that big cost is waiting to happen? What do you do if your timing belt snaps tomorrow and you need to spend £2k on a new engine and you've got no warranty?!

You pays your money, you takes your choice. Sorry if this is another rant, but as you can tell I have no love of insurance companies and am a bit hacked off that my n-star RAC warranty (where n is large!) would so far appear to be an absolute waste of paper.

As a final thought, some warranties insist you have to have the car serviced at certain bonafide outlets, which might mean you won't be able to save money fixing it yourself.

Remember: insurance companies are all likely to make you pregnant... well, that's what happens when you get shafted, innit?! (BTW thanks to Jeremy Clarkson for that one-liner )

Pete

[homer timpson]

I had another look through the main points in the FAQ - and it just 'looks' to good to be true
It would imply that as long as it is serviced to the manufacturers recommended levels by any competent garage and has 'some' form of service history, then everything is hunky dory.
We've had the car from three months old and it has had FVSH up until 2003 - from then I've had it serviced by the mechanics at the university where I work + any work required between services [like the full disc/pad replacements on all 4 brakes and it's going in next week for new bushes on the rear anti-roll bars].The car will be looked after as well as can be over the next 4 years - it's in my interests to do so as I'll get to change it for the new S40 SE my wife picked up last year

As you say, it's a case of pays your money and takes your choice - and ordinarily, I have never taken an extended warranty on any other product I've bought - so why I'm tempted to consider one this time round is certainly a strange one for me.

I'll have to ponder a wee bit more.

Thanks for the input.

Regards

Homer

Q Do I have to have the car serviced at a main agent?
A No you have to have the car serviced to the manufacturers recommended service level but you can have it serviced at any garage you like.

Q Do I have to have a service before I put the car on cover?
A No if you have a service history and a service is not due there is no point in spending money on an unnecessary service.

Q Do I have to have the warranty book stamped?
A No but we recommend that you get the book stamped when its serviced. This is because if you have a claim we may need to check the service history and if it's in the book then it can save us having to phone you to check its service history.

And that means we get the car repaired faster.

For this reason it's a good idea to keep photocopies of the service invoices in the back of the warrant book.

Q Does the car have to have a full service history?
A If you have a full service history that's great.

But not all cars come with their service records, so what we say is that if there is no service history then for your own peace of mind the car should be serviced when you buy it. The supplying garage should do this FOC and should show it on their invoice.

After that point the car should be serviced in accordance with the manufacturers recommended service requirements.

[gnhuk]

I've come to the conclusion that, in the case of a lot of these insurance/warranty offers, it's cheaper to take a hit once in a while.It also stops the person trying to sell it to you making a tidy sum in commission. I recall a consumer news item saying that electrical retailers make more profit from extended cover plans than they do from the goods........... think about it.

[Geezer]

Hi Guys.

For what it is worth (my opinion I mean), I purchased an extended warranty at the time I purchased our T5. OK, I am in NZ and the cost was around NZ$500, however, when 3 months later the wife cooked the engine with the repair bill being in excess of NZ$6000.00, I was more than happy to have paid for the additional cover.

I cannot remember how long we are covered for (will investigate later), but I do know they will not cover "wear and tear items" like brakes, tyres etc.

Incidentally, I do not have to have the vehicle serviced by a Volvo Dealer, however it does have to be serviced in accordance with the policy by a recognised garage. Both the Volvo Service Book and the Insurance Company Service Book get stamped by the garage.

You pay your money and you take your choice.

Cheers,

[blues60]

I have also fallen foul of this when I bought my S60 last year. It's hard not to get a bit excited when your buying yourself a new car so when they thrust this "extended warranty" thing under your nose it's easy to think "Well, I just shelled out nearly ten grand for a car so I would be mad not to spend a couple of hundred quid on a warranty!"
DON'T DO IT!
Most of the warranties won't cover you for anything other than major mechanical component related breakdowns which are relatively rare unless you are buying an older car. Unless you know a reliable mechanic or you know what to look for, I would say it's better to spend your money on an RAC or AA inspection and make sure the car is OK before you buy it rather than shelling out for a useless insurance policy.

[Oli]

Originally Posted by homer timpson

Was pondering the merits of aftermarket warranty deals such as this Platinum Cover
For my 1999 S40 it would be £385 for 3 years or £155 for 12 months.
My timing belt is due next July [8 years or 80K] - it's at 64K at the mo - and I thought, if I took the 12 month option I'd have peace of mind until then + whatever else may spring up in between.
Is that crazy logic?
Should I simply pay the £200+ it will cost for the timing belt and have it done now?
Homer

It does look like good cover. However, the wording states under the included headings that "all components are covered including...x,y,z" I would have expected to see the words "but not limited to" in the sentence as well. I've phoned to check that the way they've worded this is not meant to be restrictive, and they said not. However, on reading the list again, the exclusions section does have words to this effect, so I'm still not sure. Plan to ring again today to check. Remember it's for mechanical breakdown only (probably intended to be catastrophic fail rather than it starting to go wrong), that could be open to interpretation too.

Warranty Direct, covers breakdown for wear and tear, but again, I'm trying to get them to clarify the wording their using, even though they have a Plain English approval.

I'll post more as a find out, but if the Warranty Works wording really is as inclusive as they suggest, then it could be a good deal. £720 for 3 years/£2500 per claim limit, quoted for my V70R AWD.

The Volvo warranty was £814 for quite a restrictive list.
The RAC Warranties (not really RAC, name used under license) quote didn't inluced any details of the inclusions/exclusions, just a list of headings. Am trying to get more info on that too. However, interest fee monthly installments help spread the cost.

Oli