Extended warranty advice

[AndySpill]

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:
View attachment 927239

EDIT EDIT: Drive 10k/yr, $1000 repairs:
View attachment 927240

Matt:

Here is the partial fly in the ointment I fear those charts (I may be wrong) don't measure.

Those charts don't measure the interest made on rainy day monies invested in lieu of warranty coverage. They show how much you pay in each year at the time the expense is incurred.

To rephrase, take year 7, at $1000. That's really $500. How so? Say you didn't paid the premium in year 1 and invested it. Say the stock market grows on average 10% each year (it historically does.) Say that at 10% annual your money doubles every roughly 7 years (it does...it's called the financial rule of 7s.)

Still more, any chart that seeks to calculate repair expense for a make and model vehicle that hasn't simply been available for that long (to wit the JL introduced in 2018) may prove wrong: both in the possible (in fairness) benefit to the policy holder or detriment.

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[fe731as]

Andy,
Generally speaking, I agree. Everyone's situation and experience is different. Personally, I've benefited from extended warranties.
'86 Dodge(new) - used it(computer, alternator, battery)
'97 TJ Sahara(new) - didn't buy/didn't need
'03 Ford Expedition (used) - used it(fuel pump @ 96k miles)
'03 Mazda(used) - used it (radio unit)
'14 Ford Expedition (used) - used it(cam sensor failed, cam shaft, cylinder heads,etc)
I could go on...

Everybody's situation is different. 3 of my 4 daughters live too far away for me to fix their cars, so I recommend ext warranties to them. I'm old and tired of fixing cars because I NEED to. Upgrades and tinkering are still fun though.
I'm a Capitalist. I don't begrudge anyone making money - even billionaires. Elon Musk didn't make $Billions by selling 10 cars. He's sold MILLIONs of cars and made a smaller profit from each(I don'town a Tesla - I don't feel they're worth the price). Same as Bezos...Millions of products sold - small profit from each. Extended warranties- Millions sold to people who think it's worth the price.
My dad invested in the stock market for 50 years..he was great at turning $50k into $20k(yep, twenty) -- Multiple times!
Rainy day/emergency funds are important. But there is no safe(low risk) investment for the average person that will keep up with current inflation. Our Capitalist system won't allow it.
'

 

[TheRaven]

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.

You make a lot of potentially dangerous assumptions about frequency of repairs. I dunno if you are like the Jeep fanboys here that despite swimming in the constant stream of examples of how poorly built the JL is, continue to say "well all brands are like this now" or "people only join forums to complain"...but the pile of evidence to the contrary couldn't be bigger. To those of us who came here from other brands the difference is glaringly obvious. NO this is not "normal" NO it's not "just the complainers". FCA/Stellantis does not build quality vehicles, period.

You can believe what you want...because you will. But i'm going to speak up every time because the newbies need to know what they're getting into. I did a ton of research before deciding to buy into the Jeep brand, and i'm fortunate to have quite a few long-time Jeep owner friends who are honest with themselves. I knew what I was getting into. But most don't put that kind of time into it...they go out and buy what they like, then find out the nightmare they've gotten themselves into when it's already too late. I'm going to make sure that those who DO actually speak up before it's too late aren't misinformed and led into a major purchase they aren't prepared for.

 

[GATORB8]

Matt:

Here is the partial fly in the ointment I fear those charts (I may be wrong) don't measure.

Those charts don't measure the interest made on rainy day monies invested in lieu of warranty coverage. They show how much you pay in each year at the time the expense is incurred.

To rephrase, take year 7, at $1000. That's really $500. How so? Say you didn't paid the premium in year 1 and invested it. Say the stock market grows on average 10% each year (it historically does.) Say that at 10% annual your money doubles every roughly 7 years (it does...it's called the financial rule of 7s.)

Still more, any chart that seeks to calculate repair expense for a make and model vehicle that hasn't simply been available for that long (to wit the JL introduced in 2018) may prove wrong: both in the possible (in fairness) benefit to the policy holder or detriment.

Its a Jeep forum, I assumed all available funds are spent on Jeep parts with zero return

 

[TheRaven]

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

One big problem with your charts - the example given is for a 2yr old, 23k mile vehicle. So your charts would have to start at year 2, at least, really year 3. For the way you did your charts, the warranty cost would be less than half of what you have. For instance, when I bought MaxCare with 1k miles on the clock, 8yr/120k coverage was $12XX. I'm sure it's probably like $15XX now. Those prices are good until the vehicle hits 1yr/12k miles. Then they take a big jump.

 

[GATORB8]

One big problem with your charts - the example given is for a 2yr old, 23k mile vehicle. So your charts would have to start at year 2, at least, really year 3. For the way you did your charts, the warranty cost would be less than half of what you have. For instance, when I bought MaxCare with 1k miles on the clock, 8yr/120k coverage was $12XX. I'm sure it's probably like $15XX now. Those prices are good until the vehicle hits 1yr/12k miles. Then they take a big jump.

For the specific example, there's no repair cost for year one or two, so should be good on the OP's situation.

 

[Ratbert]

...

Do you realize that you're quoting someone and adding nothing of your own?

 

[GATORB8]

One big problem with your charts - the example given is for a 2yr old, 23k mile vehicle. So your charts would have to start at year 2, at least, really year 3. For the way you did your charts, the warranty cost would be less than half of what you have. For instance, when I bought MaxCare with 1k miles on the clock, 8yr/120k coverage was $12XX. I'm sure it's probably like $15XX now. Those prices are good until the vehicle hits 1yr/12k miles. Then they take a big jump.

Reran the quote, saves $200 on powertrain 100/125/8 and $440 on MaxCare 100/125/8.

Used 2024 JL, 0 miles, <12 months

Everything else should compute the same, so those numbers just come off the totals.

 

[azjl#3]

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

Bingo. I just bought an 8 yr 80,000 mopar max care for $1400. The dealers 2500 for 5/50 was redicuolous, although, can be used at any shop.

With all the doodads running on software, jeep dealers are really only place to fix the expensive stuff.

yes, finding a good dealer is hard, but I have one, Chapman Scottsdale, Indian school rd. The tech writer agreed in seconds my 23 had a bad rear end. Called 3 time over next week to keep me updated on part arival. Called me three times while in shop over two days, called three times after it was fixed to be sure it was fixed. First dealer in another city, never called me over 90 days they had it. I now drive 90 minutes to get to the Scottsdale dealer.

 

[fe731as]

Do you realize that you're quoting someone and adding nothing of your own?

Yeah, not sure what happened there?

 

[Zandcwhite]

You make a lot of potentially dangerous assumptions about frequency of repairs. I dunno if you are like the Jeep fanboys here that despite swimming in the constant stream of examples of how poorly built the JL is, continue to say "well all brands are like this now" or "people only join forums to complain"...but the pile of evidence to the contrary couldn't be bigger. To those of us who came here from other brands the difference is glaringly obvious. NO this is not "normal" NO it's not "just the complainers". FCA/Stellantis does not build quality vehicles, period.

You can believe what you want...because you will. But i'm going to speak up every time because the newbies need to know what they're getting into. I did a ton of research before deciding to buy into the Jeep brand, and i'm fortunate to have quite a few long-time Jeep owner friends who are honest with themselves. I knew what I was getting into. But most don't put that kind of time into it...they go out and buy what they like, then find out the nightmare they've gotten themselves into when it's already too late. I'm going to make sure that those who DO actually speak up before it's too late aren't misinformed and led into a major purchase they aren't prepared for.

My ram rebel was driven hard, jumped in the desert, driven like the throttle was an on/off switch because...400hp is just fun, for 120k trouble free miles before sold. Our 2019 JLUR was trouble free, wheeled through some of the hardest trails in the country, on 37-38" tires with stock shafts and even the tie rod was original when it was stolen at 63k miles. The replacement 2022 is pushing 36k miles on 39s. Our vehicles get modded away from reliability and used hard...and they have all been trouble free. Maybe I'm lucky, maybe some are just doing pull-ups on their visors and blaming Stellantis build quality when they break, or maybe your Jeeps are revolting for being mistreated as mall crawlers? Go ahead and buy any other vehicle on the planet, throw 37s on it, run it through the Rubicon, John Bull, and Pritchett Canyon, and get back to me on who "doesn't build quality vehicles period".

 

[runningshoes]

Just a couple of points reading through the 6 pages of the argument. Some have been made here, but the use of averages is simply meaningless for an individual asking about their set of circumstances. In addition, the assumptions used by any of the automotive guides around costs/year for breakdowns, are again, averages gained across tens (or hundreds) of thousands of similar vehicles makes. For an individual, the distribution of repairs is not "normal" and tends to follow a much more random pattern with periods of zero expenses mixed with higher than average expenses. Adding a warranty to a car purchase and paying a portion of it upfront and a portion over time is not bad financial planning unless you're charged a high interest rate on the purchase.

The other note is that the REALLY expensive cost to replace electronic parts changes the math on warranties, especially since the failure mode for electronic components doesn't follow the same pattern of mechanical failures/mileage based wear and tear. Excessive heat/cold/starts/power surges/etc. can all cause 000's of dollars of repairs on parts that can't be repaired.

A complete side note to the comments that people with lower incomes tend to gravitate towards warranties, that's simply not the case. Most warranties are sold with new cars, lower income people tend to purchase used. If you look at people driving w/o basic insurance, it's typically people who struggle to make ends meet. In addition, the "market" on average returns 7% per year, not 10%, so any investment in a repair fund grows a lot slower than noted in some of the posts.

 

[TheRaven]

Just a couple of points reading through the 6 pages of the argument. Some have been made here, but the use of averages is simply meaningless for an individual asking about their set of circumstances. In addition, the assumptions used by any of the automotive guides around costs/year for breakdowns, are again, averages gained across tens (or hundreds) of thousands of similar vehicles makes. For an individual, the distribution of repairs is not "normal" and tends to follow a much more random pattern with periods of zero expenses mixed with higher than average expenses. Adding a warranty to a car purchase and paying a portion of it upfront and a portion over time is not bad financial planning unless you're charged a high interest rate on the purchase.

The other note is that the REALLY expensive cost to replace electronic parts changes the math on warranties, especially since the failure mode for electronic components doesn't follow the same pattern of mechanical failures/mileage based wear and tear. Excessive heat/cold/starts/power surges/etc. can all cause 000's of dollars of repairs on parts that can't be repaired.

A complete side note to the comments that people with lower incomes tend to gravitate towards warranties, that's simply not the case. Most warranties are sold with new cars, lower income people tend to purchase used. If you look at people driving w/o basic insurance, it's typically people who struggle to make ends meet. In addition, the "market" on average returns 7% per year, not 10%, so any investment in a repair fund grows a lot slower than noted in some of the posts.

OMG look someone who understands that the data doesn't tell the whole story!!

The tidbit about electronics - this is, I think, where the "old guys" really have trouble understanding. Engines, transmissions, diffs and axles are no longer the biggest "big ticket" items of concern. If not for the highly networked nature of the JL (and all modern vehicles really), the warranty equation would be very different...because even if you are one of the unlucky ones to have a rocker failure or internal coolant leak, it's a one time thing. So you replace the engine, and you are extremely unlikely to have that happen again. Not the case with electronics. There's really no limit to the cost of, and number of times you can have to deal with, something failing on the vehicle data network.

 

[jellis4148]

My ram rebel was driven hard, jumped in the desert, driven like the throttle was an on/off switch because...400hp is just fun, for 120k trouble free miles before sold. Our 2019 JLUR was trouble free, wheeled through some of the hardest trails in the country, on 37-38" tires with stock shafts and even the tire rod was original when it was stolen at 63k miles. The replacement 2022 is pushing 36k miles on 39s. Our vehicles get modded away from reliability and used hard...and they have all been trouble free. Maybe I'm lucky, maybe some are just doing pull-ups on their visors and blaming Stellantis build quality when they break, or maybe your Jeeps are revolting for being mistreated as mall crawlers? Go ahead and buy any other vehicle on the planet, throw 37s on it, run it through the Rubicon, John Bull, and Pritchett Canyon, and get back to me on who "doesn't build quality vehicles period".

As someone who sells new GM, and CDJR I can assure you they all have problems. These people that say Stellantis is junk, or worse than other manufacturers are crazy. I've watch new GMC trucks with a 6.2 have the whole engine replaced before the first oil change. Seen new Buicks with adaptive cruise that would work intermittently. We have a 4XE with only 20,000 miles that will remote start, but as soon as you push the button it goes dead. I don't care if it's Ford, Toyota, Hyundai or Honda these cars have a lot of electronics, and other stuff. Most are good, but there are a few with issues that weren't found out till later. My point is that Stellantis vehicles are just as good as anybody else. Sometimes you get a bad one and when that happens they all have the problem by word of mouth even if it was an isolated event. Wranglers are built well and for as many as there are in the world they don't have any more problems than the next vehicle. I buy extended warranty for the same reason I have insurance, because you never know. I paid $2,400 for a 3/36 comprehensive. They won't cover any aftermarket parts, but they will warranty everything else as long as I don't go bigger than 37" tires and more than a 5" lift. If the transmission, or some computer goes out it's paid for itself plus. Oh, and to the person that said dealers don't make money on extended warranty work. You have no idea what you're talking about.

 

[2nd 392]

I don’t care about frequency of repairs or if the warranty on balance pays for itself. For $1200 I got 8/85/200 Max Care catastrophic fail insurance IMO. ….. I have filed three homeowners insurance claims since 1974, way underwater, but the one a few years ago covered the last 20 years worth of premiums. No way I could cover out of pocket and would be paying interest on the debt.
never used the extended or the factory warranty on my 15 GC. May I hopefully have wasted the $1200 on my Wrangler because it doesn’t have a single problem in nearly 10 years as well.

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