Extended warranty advice

[TheRaven]

...stock fund that holds the Forbes 500...

You already lost me and the average Wrangler buyer at this point.

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[DogsRule]

Definitely Extended Warranty 'cause it's a Wrangler.
Definitely Umbrella Policy 'cause it's a 16 year old.

 

[DeBen21JL]

Kind of made me laugh when someone said to invest the cost of the premium to pay for expenses.

Smarter to invest the cost of one major repair and now the premium is free.

one option leaves you with a zero to negative balance and the other leaves you with a large balance at the end with endless coverage over term.

Making decisions like rich people !

 

[Oakridge88]

Cant beat these guys:

https://www.buymoparwarranty.com/

They don't list Florida? Or, do I need new glasses?

 

[Barney392]

They don't list Florida? Or, do I need new glasses?

Sorry, you are correct. Recently CA and FL won't allow out of state extended warranties. I purchased mine a couple of years ago and it wasn't a problem at that time.

 

[Ratbert]

They don't list Florida? Or, do I need new glasses?

No idea if you need new glasses, but FL isn't listed.

 

[fe731as]

I'll let my ignorance shine...what is a "Reign"? I've never seen/heard that before, but I don't read every thread on the forum. ("There are no stupid questions. Only stupid people asking questions." <--that's me!)
Jay_Jeep, most people buy insurance for the 'piece of mind', knowing that IF something happens, they're covered. I don't plan on getting sick...but IF I do, I'm covered by health insurance.
If it was my daughter, I'd buy the warranty. If you're giving her the car, make her buy the warranty. That way, she has 'skin in the game' and she will probably take better care of it(-->6 kids -->experience...).
Is it worth ~$20/month?...(for me, yes) (*7yrs x $20 = $1680...)

 

[GATORB8]

I'll let my ignorance shine...what is a "Reign"? I've never seen/heard that before, but I don't read every thread on the forum. ("There are no stupid questions. Only stupid people asking questions." <--that's me!)
Jay_Jeep, most people buy insurance for the 'piece of mind', knowing that IF something happens, they're covered. I don't plan on getting sick...but IF I do, I'm covered by health insurance.
If it was my daughter, I'd buy the warranty. If you're giving her the car, make her buy the warranty. That way, she has 'skin in the game' and she will probably take better care of it(-->6 kids -->experience...).
Is it worth ~$20/month?...(for me, yes) (*7yrs x $20 = $1680...)

It's a purple color.

 

[AndySpill]

I'll let my ignorance shine...what is a "Reign"? I've never seen/heard that before, but I don't read every thread on the forum. ("There are no stupid questions. Only stupid people asking questions." <--that's me!)
Jay_Jeep, most people buy insurance for the 'piece of mind', knowing that IF something happens, they're covered. I don't plan on getting sick...but IF I do, I'm covered by health insurance.
If it was my daughter, I'd buy the warranty. If you're giving her the car, make her buy the warranty. That way, she has 'skin in the game' and she will probably take better care of it(-->6 kids -->experience...).
Is it worth ~$20/month?...(for me, yes) (*7yrs x $20 = $1680...)

Hey Conor:

I appreciate that the price people are willing to pay for peace of mind as it regards auto repairs varies.

I also tend to think that people living closer to their financial edge (by no means am I suggesting you) tend to be attracted to such warranties, which kind of saddens me because it lays creed to the adage, "the rich just keep getting richer."

I tend to be skeptical of that phrase but not when it comes to warranties. I say that because of my belief that such warranties are statistically more expensive than self funding a repair rainy day fund for those with the financial cushion to finance once.

That said I am by no means anti-insurance; in fact I'm a huge advocate--but the right kind of insurance--which is the kind both mandated by law (e.g. automobile liability) and insurance like medical, home, etc. insurance. While the latter are not legally mandated, both are good insurances because they guard against the catastrophic expense that can bankrupt someone.

And they, in my opinion, are not comparable to warranty insurance as you seem to have classified them as similar in your thought process.

It's of note that the extremely rich (e.g. Warren Buffet, large companies) tend to self fund their own medical expenses. I believe it goes to my point that if you've got the financial buffer, self funding beats purchasing the coverage in the open market from underwriters that make no illusion of their (right) to offer such coverage not out of the goodness of their hearts or not for non-profit, like say government flood insurance, but to make money.

 

[AndySpill]

You already lost me and the average Wrangler buyer at this point.

I'm both sorry to hear that and offer this as help. If you know--which of course you do--how to deposit money in a bank, well, the only difference here is where you put some of your money:

https://iask.ai/?mode=question&q=what+are+some+common+index+funds+that+i+can+purchase

 

[GATORB8]

To add some data to the conversation, here's some pricing. These are from Granger motors "buymoparwarranty" site. Used OP's vehicle specs and the middle of the road $100 deductible:

Change for Max Care at $200 deductible:

 

[fe731as]

Hey Conor:

I appreciate that the price people are willing to pay for peace of mind as it regards auto repairs varies.

I also tend to think that people living closer to their financial edge (by no means am I suggesting you) tend to be attracted to such warranties, which kind of saddens me because it lays creed to the adage, "the rich just keep getting richer."

I tend to be skeptical of that phrase but not when it comes to warranties. I say that because of my belief that such warranties are statistically more expensive than self funding a repair rainy day fund for those with the financial cushion to finance once.

That said I am by no means anti-insurance; in fact I'm a huge advocate--but the right kind of insurance--which is the kind both mandated by law (e.g. automobile liability) and insurance like medical, home, etc. insurance. While the latter are not legally mandated, both are good insurances because they guard against the catastrophic expense that can bankrupt someone.

And they, in my opinion, are not comparable to warranty insurance as you seem to have classified them as similar in your thought process.

It's of note that the extremely rich (e.g. Warren Buffet, large companies) tend to self fund their own medical expenses. I believe it goes to my point that if you've got the financial buffer, self funding beats purchasing the coverage in the open market from underwriters that make no illusion of their (right) to offer such coverage not out of the goodness of their hearts or not for non-profit, like say government flood insurance, but to make money.

 

[TheRaven]

Hey Conor:

I appreciate that the price people are willing to pay for peace of mind as it regards auto repairs varies.

I also tend to think that people living closer to their financial edge (by no means am I suggesting you) tend to be attracted to such warranties, which kind of saddens me because it lays creed to the adage, "the rich just keep getting richer."

I tend to be skeptical of that phrase but not when it comes to warranties. I say that because of my belief that such warranties are statistically more expensive than self funding a repair rainy day fund for those with the financial cushion to finance once.

That said I am by no means anti-insurance; in fact I'm a huge advocate--but the right kind of insurance--which is the kind both mandated by law (e.g. automobile liability) and insurance like medical, home, etc. insurance. While the latter are not legally mandated, both are good insurances because they guard against the catastrophic expense that can bankrupt someone.

And they, in my opinion, are not comparable to warranty insurance as you seem to have classified them as similar in your thought process.

It's of note that the extremely rich (e.g. Warren Buffet, large companies) tend to self fund their own medical expenses. I believe it goes to my point that if you've got the financial buffer, self funding beats purchasing the coverage in the open market from underwriters that make no illusion of their (right) to offer such coverage not out of the goodness of their hearts or not for non-profit, like say government flood insurance, but to make money.

You, like many others, are operating on obsolete information. The extended warranty world has changed a lot. But it's only when you take a look at the obsolete statement that "warranty companies would go out of business if they didn't make money" and what that insinuates, that you have to get in to the details of how these warranties are funded now.

The basic question remains the same. It's not a matter of how you manage your money...it's simple smart "investing". The question is - will you spend more on self-funding repair than you would on the cost of the warranty? With how cheap MaxCare is and how expensive even simple repairs on the JL are, the odds are overwhelming that the warranty is cheaper in the long run. I've been very clear that i'm not a financial advisor and not a great investor, but even I can recognize that the warranty is the smart choice here.

 

[GATORB8]

A little exercise. Google Average Jeep Wrangler Repair Cost: $694/yr, Average Miles per year: 14,500

Call power train 50% of repair cost. Call it one power train and one other repair per year.

$100 deductible, 125k plans. 3/36 bumper to bumper, 5/60 powertrain:

EDIT: Same sheet/calcs, but $1000 repairs per year:

EDIT: Drive 10k miles/yr:

EDIT EDIT: Drive 10k/yr, $1000 repairs:

EDIT, EDIT, EDIT: Modify Jeep on Day 1, Do own repairs, assume 50% parts and tools cost:

 

[AndySpill]

You, like many others, are operating on obsolete information. The extended warranty world has changed a lot. But it's only when you take a look at the obsolete statement that "warranty companies would go out of business if they didn't make money" and what that insinuates, that you have to get in to the details of how these warranties are funded now.

The basic question remains the same. It's not a matter of how you manage your money...it's simple smart "investing". The question is - will you spend more on self-funding repair than you would on the cost of the warranty? With how cheap MaxCare is and how expensive even simple repairs on the JL are, the odds are overwhelming that the warranty is cheaper in the long run. I've been very clear that i'm not a financial advisor and not a great investor, but even I can recognize that the warranty is the smart choice here.

Kevin: the notion that those who underwrite insurance that is not backed by the Federal government (e.g. FDIC) or State regulatory agency must ultimately make more in premiums than they pay out in claims in order to remain solvent, has, is, and will always remain true.

It's nothing personal, just math.

There is nothing that was, is, or will ever be obsolete about that.

That said, that some extended warranties may be worth more for a particular make and model vehicle than competing products for that make and model, or that some extended warranties for a given make and model vehicle may be worth more relative to repair expense than the warranties on more reliable vehicles, where such losses are covered by the process of reinsurance: or pooling such warranties with other financial products, like the warranties of more reliable make and model vehicles... that is certainly possible. But the pool must come out ahead.

The majority of people don't have claims against their warranties. Those that do also usually experience that event at some point in the future where the premium monies have been invested by the insurer, making the present value of those repairs (the cost, allowing for interest, at the time the policy is underwritten) cheaper.

Please appreciate that the repair cost savings you cite of even modest repairs being greater than insurance premiums, has to also be looked at under the lens that finds the vast majority of owners not experiencing that repair--and if they do, is often covered under the recall process, or one of wear and tear not warranty covered.

To rephrase, anyone who presents a chart of the cost of frequent warranty covered repairs compared to premium cost, who doesn't also express the likelihood of those covered repairs, and if so, how far into the future they occur, presents a picture that misses key details.

I completely respect that warranty insurance, even if you could afford to pay out of pocket, is your cup of tea. To each their own.

I don't wish to cast vehicle repair underwriters as the devil. They make profit, they're entitled to, and make no claims otherwise--much as we could debate just how much profit they should be entitled to, or whether competition benefits consumers here and to what extent.

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