Extended warranty advice

[AndySpill]

YES, they did...extensively...10-20 years ago. This is exactly the point...all this data costs money to collect, and what they kept finding is that new data wasn't really all that useful. Oversimplifying - they can correlate the "cost" of each policy with the relative cost of the vehicle. However this isn't done at a per-model or even per-brand level. It's done (was done, actually) at a vehicle class level, and as time passed they zoomed out even further and just started modeling the cost trends in each class. It's those trends that determine the prices that brokers tack their commissions on to.

Bringing all this back to the subject of the thread - the cost of an extended warranty is no longer a reliable indicator of the cost to maintain a given vehicle. Example - FCA warranties are among the cheapest in the business, yet their vehicles are among the most expensive to maintain. The cost differences now are due to the commissions that are being paid to the chain of brokers and salespeople that sell the warranties. Over time this has come to mean that the cost of an extended warranty for any given vehicle is tailored to the class of buyer that they expect to buy that particular vehicle.

I want to make clear at this point that the above explanation is what I remember from a lesson on warranties and insurance from a friend of mine who manages funds like these. He dumbed it down big time for me because i'm an engineer not a banker. The details aren't really what's important anyway in a thread debating whether or not an extended warranty for a JL Wrangler is a good idea. The question, as always is - will I spend less on a warranty than I will on repairs for a JL out of warranty? And the answer to that is ALMOST DEFINITELY YES.

Let me also be clear that I am NOT addressing the reliability of the warranty itself. Whether or not that warranty will be honored when it is needed is another story altogether. Again that comes back to the dealers.

Ok. Thanks for that.

When you say that you will spend less on a warranty than you will on repairs out of pocket for a JL out of warranty--and I assume you are speaking generically across all JL owners--not simply yourself and your own wear and tear experience, does this factor in the investment of monies by the JL owner saved on a policy and the present value of repairs in the future (which of course is cheaper somewhat than the actual cost at the time the expense is incurred in the future) given at time zero the investment of those monies (not spent on the warranty) in interest bearing accounts that grow with time, hopefully faster than inflation?

For warranties to be win-win, I would think that there would have to be the ability for the guarantor, through large purchase power, to negotiate rates of pay for parts and labor so much cheaper than you and I would pay out of pocket, and pass a substantial amount of that savings along to the policy owner (i.e. losing profits in the process), along with small commissions on the sale of said policies.

If you were taking about yourself, I can certainly concede that warranty may very well be worth it for someone who has covered expenses as a byproduct of putting far above the average wear and tear and miles on their vehicle, wear neither time nor mileage negate covering such warranties.

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[rossneill]

For the JL, absolutely. I would not recommend owning one without a warranty. It sounds like you should go for the longest term you can. Look up Tom Winkels at Hayes Jeep to get a price.

Also note - I believe it's at 2years or 24k miles that the warranty jumps in price BIG TIME. So get it ASAP. I got 5yr/75k B2B coverage at the time of purchase for $860. I think 8yr/120k was like $1200ish. You'll be paying more than that now because of your mileage but not as much as you will be if you wait.

It’s true that people do occasionally manage to milk the hell out of these things:

https://jalopnik.com/my-range-rover-s-carmax-warranty-is-now-half-over-and-i-1733772237

But that just tends to lead to further tightening of the underwriting guidelines. As others have noted, they don’t sell them to lose money.

I recently got a warranty for mine at [email protected] all you do is email your vin and mileage and what you want I got 8 yr 60000 miles with a hundred dollars deductible max care you can get up to 8yr and 125000 miles with 0 to 200 dollars deductible .

 

[TheRaven]

When you say that you will spend less on a warranty than you will on repairs out of pocket for a JL out of warranty--and I assume you are speaking generically across all JL owners--not simply yourself and your own wear and tear experience, does this factor in the investment of monies by the JL owner saved on a policy and the present value of repairs in the future (which of course is cheaper somewhat than the actual cost at the time the expense is incurred in the future) given at time zero the investment of those monies (not spent on the warranty) in interest bearing accounts that grow with time, hopefully faster than inflation?

Yes I am speaking across ALL owners. For all vehicle types there will be some that beat the average and some that don't...its just that in the case of the JL the percentage of those that will accrue repair costs higher than the cost of the warranty is far, far above average. Part of that is because of quality issues but part of it is also because of the relatively low-cost of FCA warranties. As I mentioned before, MaxCare coverage for 5yr/75k for my JLU80 was $860. I could have had 8yr/120k for $1200ish. That's CHEAP.

This whole idea of putting that money in an investment account to be your "fund" for repairs is kinda silly - $860 being a sufficient repair fund for a modern $50-60k vehicle? Even with today's interest rates, in 5 years you'll have like $1000. There's not a whole lot that a dealer can fix on a JL for that money. One infotainment system replacement, or one "pull over vehicle will shut off soon" incident will blow through that and a lot more.

For warranties to be win-win, I would think that there would have to be the ability for the guarantor, through large purchase power, to negotiate rates of pay for parts and labor so much cheaper than you and I would pay out of pocket, and pass a substantial amount of that savings along to the policy owner (i.e. losing profits in the process), along with small commissions on the sale of said policies.

I mean they already did the first part (offering little to nothing for warranty repairs) but they're still raking in the money on these things and as I explained previously, it's because of the other products that get lumped in there that make so much money. They don't put in the effort any more to differentiate because that alone costs money and it's not needed.

 

[Zandcwhite]

Yes I am speaking across ALL owners. For all vehicle types there will be some that beat the average and some that don't...its just that in the case of the JL the percentage of those that will accrue repair costs higher than the cost of the warranty is far, far above average. Part of that is because of quality issues but part of it is also because of the relatively low-cost of FCA warranties. As I mentioned before, MaxCare coverage for 5yr/75k for my JLU80 was $860. I could have had 8yr/120k for $1200ish. That's CHEAP.

This whole idea of putting that money in an investment account to be your "fund" for repairs is kinda silly - $860 being a sufficient repair fund for a modern $50-60k vehicle? Even with today's interest rates, in 5 years you'll have like $1000. There's not a whole lot that a dealer can fix on a JL for that money. One infotainment system replacement, or one "pull over vehicle will shut off soon" incident will blow through that and a lot more.



I mean they already did the first part (offering little to nothing for warranty repairs) but they're still raking in the money on these things and as I explained previously, it's because of the other products that get lumped in there that make so much money. They don't put in the effort any more to differentiate because that alone costs money and it's not needed.

Like I've stated, even wheeled hard all across the country our 2019 was within 10k miles of your extended warranty without issue when it was stolen. That would have been $860 in the trash had i bought the same warranty.

 

[TheRaven]

Like I've stated, even wheeled hard all across the country our 2019 was within 10k miles of your extended warranty without issue when it was stolen. That would have been $860 in the trash had i bought the same warranty.

And one infotainment system replacement you'd have saved $800. ONE REPAIR.

 

[Zandcwhite]

And one infotainment system replacement you'd have saved $800. ONE REPAIR.

Yes, if you use the warranty coverage for more than it cost you you'd save money? Nobody is arguing that. But many people won't.

 

[Eddiechi]

With extended warranties as has been debated to infinty everyone has their own rationale....

I paid for the extended warranty and I hope I NEVER have to use it, meaning - yes, I tossed $1600 away as I dont enjoy going to the service center, using a loaner or arranging rides and being without my vehicle although my service center has a great coffee shop..... but if I never have to use my extended warranty I still consider that a win regardless of the $1600 investment.

 

[TheRaven]

Yes, if you use the warranty coverage for more than it cost you you'd save money? Nobody is arguing that. But many people won't.

This is the overriding point from the JL owner's point of view - with the JL Wrangler, you are far more likely to spend more on repairs than you would pay for the warranty.

With extended warranties as has been debated to infinty everyone has their own rationale....

I paid for the extended warranty and I hope I NEVER have to use it, meaning - yes, I tossed $1600 away as I dont enjoy going to the service center, using a loaner or arranging rides and being without my vehicle although my service center has a great coffee shop..... but if I never have to use my extended warranty I still consider that a win regardless of the $1600 investment.

And either way - $1600 for B2B coverage on a $50k+ vehicle is peanuts. It was a no brainer for me too - $860...that's not even something that needs to be debated. If we were talking $3k+ there would be more merit in the debate. There are so many members here that will spring for top-shelf oil every 3k miles and pride themselves on running nothing but the best premium fuels with the rationale "if can afford to spend $50k on a vehicle you can afford the right fuel/oil for it". Well you can also afford $800-1200 for a warranty for it.

 

[Zandcwhite]

This is the overriding point from the JL owner's point of view - with the JL Wrangler, you are far more likely to spend more on repairs than you would pay for the warranty.

I'd like to see numbers to back up that opinion. Obviously on the forums you'll hear more from those with problems, but I'm not certain that warranty repairs... and more specifically extended warranty repairs are nearly as common as you believe they are.

 

[AndySpill]

Yes I am speaking across ALL owners. For all vehicle types there will be some that beat the average and some that don't...its just that in the case of the JL the percentage of those that will accrue repair costs higher than the cost of the warranty is far, far above average.

Fair enough, but this alone (I know there's more below) tells me that a JL Warranty may be a better hedge against risk than other automobile warranties, not that a JL Warranty beats what I'll describe as self funding repairs in a rainy day fund.

Part of that is because of quality issues but part of it is also because of the relatively low-cost of FCA warranties. As I mentioned before, MaxCare coverage for 5yr/75k for my JLU80 was $860. I could have had 8yr/120k for $1200ish. That's CHEAP.

This whole idea of putting that money in an investment account to be your "fund" for repairs is kinda silly - $860 being a sufficient repair fund for a modern $50-60k vehicle? Even with today's interest rates, in 5 years you'll have like $1000. There's not a whole lot that a dealer can fix on a JL for that money. One infotainment system replacement, or one "pull over vehicle will shut off soon" incident will blow through that and a lot more.

Someone above suggested seeing the numbers. I fully admit to not having at my fingertips the present value of average lifetime ownership repair cost estimates for the JL. In fact it's probably a value still being adjusted given most owners have not yet reached the model's useful life.

What I have is the alternative. The stock market, every year, on average, has grown by 10%. Of course there are years that isn't achieved, even down years: it's an average. And in finance there is something called the "rule of 7" that says that at a 10% annual interest rate your money doubles every 7 years. So I may not agree with the smaller worth of a rainy day fund, or the larger size present value of repair costs you've assigned.

There's another thing. Insurers, as you are first fairly to point out, deal in aggregate. Policy holders deal with individual experience and might (I know we're talking averages) value an after purchase warranty not simply on their adversity to risk, but their anticipated vehicle usage: my JL being an average very infrequently otherwise on road used vehicle, making an after purchase warranty statistically more expensive *for me* than say my off roading JL owning friend up the road from me.

I mean they already did the first part (offering little to nothing for warranty repairs)

I'm not quite sure, respectfully asked, how that's relevant or perhaps advances your point about after purchase warranty value. If anything I'd be inclined to say that the better and more comprehensive the purchase warranty the less--at whatever cost the after purchase warranty is--that after purchase warranty is worth because you already got substantial coverage in your purchase price.

but they're still raking in the money on these things and as I explained previously, it's because of the other products that get lumped in there that make so much money. They don't put in the effort any more to differentiate because that alone costs money and it's not needed.

 

[Money Pit]

I have a’23 Reign (custom order) with 23,000 miles on it and I usually only keep a Jeep for 4-5 years regardless of miles. I’ve never purchased an extended warranty and was curious on thoughts or experiences with it. My reasoning is, I plan on keeping it and passing it on to the kid when she is 16 next year and just ordering a ‘26 when those order banks open in the fall of 2025. She will get the Reign with about 35,000 miles by that time. So are they worth it? I don’t even know the cost or options, any suggestions or assistance would be appreciated.

In 2022 I bought a 2021 Wrangler JLU Sahara with around 40,000 miles on it. In August 2024, at 82,000 miles I started hearing a roaring in the rear end. Come to find out, the fluid in the axle was a milky color and there were metal shavings in it. We didn’t by a warranty as my husband doesn’t believe in them so thank the Lord I had a limited power train warranty that covered it ($4,200) my part was a $100 deductible and $111 that wasn’t covered. I’ll take that! So my new assembly has a 2yr unlimited miles warranty so I pray IF anything is going to go wrong with it, it will happen within the timeframe. We did have quite a few hoops to jump through to make sure we they would cover the repairs but I was willing to do whatever it took because I didn’t have that kind of money laying around. Just sharing my experience. Hope all goes well for you.

 

[TheRaven]

Fair enough, but this alone (I know there's more below) tells me that a JL Warranty may be a better hedge against risk than other automobile warranties, not that a JL Warranty beats what I'll describe as self funding repairs in a rainy day fund.

How do you build a sufficient fund to cover potential repairs when said repairs range from like $800 to $10000+ per instance? Again...the warranty is $800-1200. $1200 in a savings account ain't gonna cut it and most of us are not day traders...so the modest interest we gain from keeping the money in savings ain't gonna help.

I'm not quite sure, respectfully asked, how that's relevant or perhaps advances your point about after purchase warranty value. If anything I'd be inclined to say that the better and more comprehensive the purchase warranty the less--at whatever cost the after purchase warranty is--that after purchase warranty is worth because you already got substantial coverage in your purchase price.

I'm not really arguing this point because how effective an FCA warranty is depends heavily on the dealer chosen. It's all over the place - and the bottom line really is that if you can't find a good CDJR service dept then you need to stay away from the brand altogether.

In 2022 I bought a 2021 Wrangler JLU Sahara with around 40,000 miles on it. In August 2024, at 82,000 miles I started hearing a roaring in the rear end. Come to find out, the fluid in the axle was a milky color and there were metal shavings in it. We didn’t by a warranty as my husband doesn’t believe in them so thank the Lord I had a limited power train warranty that covered it ($4,200) my part was a $100 deductible and $111 that wasn’t covered. I’ll take that! So my new assembly has a 2yr unlimited miles warranty so I pray IF anything is going to go wrong with it, it will happen within the timeframe. We did have quite a few hoops to jump through to make sure we they would cover the repairs but I was willing to do whatever it took because I didn’t have that kind of money laying around. Just sharing my experience. Hope all goes well for you.

Yet another example of how expensive problems can be on a modern vehicle.

Does your husband believe in warranties now? You could have bought the (used vehicle) MaxCare warranty when you bought your Jeep...granted it would have been quite a bit more - quotes for my 50k mile 2021 are currently at $1800 for an additional six years of coverage...but that's still less than half of $4200 and you'd have coverage for everything else too.

 

[alphawolff]

And one infotainment system replacement you'd have saved $800. ONE REPAIR.

Just about every single repair entering my shop is a minimum of $1000 these days.

 

[TheRaven]

Just about every single repair entering my shop is a minimum of $1000 these days.

 

[AndySpill]

How do you build a sufficient fund to cover potential repairs when said repairs range from like $800 to $10000+ per instance? Again...the warranty is $800-1200. $1200 in a savings account ain't gonna cut it and most of us are not day traders...so the modest interest we gain from keeping the money in savings ain't gonna help.

I'm not a day trader. I have some monies in a stock fund that holds the Forbes 500 otherwise administered by professionals for a nominal administrative fee. I don't play, time, or watch the market. I advocate that rainy day funds be largely compose of same.

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