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Which Warranty Did You Get? And how much did it cost?

What warranty did you get?


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CivilJeep

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Except your still locked in - only to Mopar rather than GEICO. That $1,510 is gone forever. If you sold your Jeep tomorrow it would be worth whatever value your purchaser puts on it, if anything.

[yeah, I know, you'll never sell your Jeep....].

My mentor once told me that you should never introduce a fixed cost to your cost structure if there is a reasonable variable cost option. Fixed costs create barriers to exit.
Not true, the warranty is prorated, and I've canceled them before. So if I sell my Jeep in 2 years with 50k miles, I will have used half the warranty, and will receive half my money back. Yes, you can sell it to the next owner if you'd like, but it's value is certainly not set by them.
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rickinAZ

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Not true, the warranty is prorated, and I've canceled them before. So if I sell my Jeep in 2 years with 50k miles, I will have used half the warranty, and will receive half my money back. Yes, you can sell it to the next owner if you'd like, but it's value is certainly not set by them.
I stand corrected.
 

CivilJeep

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Asymmetric information.

The warranty buyer feels like they've come out ahead because they don't do the math of what the cost of the warranty is worth when the repair actually occurs. The warranty company knows their internal rate of return and the future value of that warranty.

For example, one forum member paid $1,950 in 2012 and had $3,000 of repairs covered on the vehicle up to 2020. What this a good deal?

The long term growth rate of the S&P 500 is 10%. The $1,950 invested in 2012 at 10% would be worth $4,180 in 2020. The warranty buyer gave up $1,180 of growth and gave it to the insurance company. They got piece of mind that in the event a very low probability event occurred they would have made out. While this does happen occasionally it is rare or the insurance company would be out of business and they are not. This was a good deal for the insurance company but not the buyer.

This is the situation with all types of insurance that are not limited to protection against an open ended catastrophic event. People frequently spend tens of thousands of dollars over their life on these types of "insurance" and give up significant money in the process that if retained would have a meaningful impact on their retirement.

Also, most of these types of insurance are specifically limited to the window of time when the item is statistically least likely to break down.
Everyone is going to make their own value judgment on service contracts, but here are a few reasons I typically purchase one.

* The warranty company is able to make a "bet" on the repair cost over a sample rate of tens of thousands of vehicles. They look at things in the aggregate. I am making a "bet" on one single vehicle.

* I have no way to confirm this, but I imagine that Mopar does not pay list price for parts and labor. So while an out of warranty repair might cost a retail customer $2000, Mopar likely pays substantially less. Technically, this means that it's possible we both win. Mopar could make money on sale of the service contract, and I could save money on not paying for the repair.

* The fringe benefits of the service contract are nice, and I've made use of them. Lost your key fob? You get a replacement, no deductible. Break down 100+ miles from home? You get meals and lodging. Car in for service? You get a free loaner and don't have to cool your heels in the waiting area. Not worthy of the warranty cost on their own, but certainly nice to have.

I can't disagree with the straight math of investing the money in the S&P and waiting 7 years.....IF you're willing to bet your particular jeep is flawless.
 

jespey

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Here's the issue I have with MBI; I'm now locked into my auto insurance carrier, or I lose my service contract. I routinely shop to make sure I'm getting a good deal on auto insurance. However, if I purchase MBI, I either can't leave if they raise rates, or lose my mechanical coverage if I do. And yes, it is $34 yearly now, but do you think it will still be that same cost when its 4, 5 or 8 years old? It won't, and you will not be able to leave Geico if you want MBI coverage. For me, I'll take the MOPAR coverage.

7yr/100k Maximum Care, $100 deductible for $1510 through Zeigler.
When you say it won’t be the same cost, is that based on your experience with Geico, or just best guess? I had assumed it would increase over time, but just wondering if you had some knowledge that the price increases are exorbitant?
 

Stormin’ Moorman

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My Dad advised me to always go back the dealer you bought the vehicle from for factory maintenance service since they appreciate your business and loyalty and will cover things out of warranty just because of that, and I saw that happen first hand with all the vehicles he owned. I won't be able to go back to the dealer where I purchased my JLUS since I am moving two hours away in a different city a month after I get the JLUS. Once I arrive in Erie I am definitely stopping in the nearest Jeep dealership up there and developing a relationship with them!
Your dad is high.
 

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CivilJeep

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When you say it won’t be the same cost, is that based on your experience with Geico, or just best guess? I had assumed it would increase over time, but just wondering if you had some knowledge that the price increases are exorbitant?
I don't recall the exact amount, but I do remember it was significant (but not exhorbitant).
 

Rdmitch

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Typically i avoid these warranty plans since usually I buy new and only keep cars 3-4 years. Since I tend to rack up lots of miles for work and my employer pays me well for milage and car expense. On my new Jeep I plan to keep it longer and with current Covid stuff and most meetings now being virtual my milage has dropped significantly. So, since I plan on keeping this one a while, i negotiated the extended warranty into the price so it was not a big add. Based on the problems i read about with Jeep electronics and past steering issues i wanted full bumper to bumper coverage past the typical warrants period.

I purchased a 2017 JK for my wife and being the first used car I bought in many moons, I wanted it covered as well. She drives very little so we tend to keep her cars a long time. I got a policy thru the dealership (a GM dealer) from Ally, covered all major repairs plus all the extras for 6 years up to 70,000 miles. I paid close to $1000.00 for this.

2 day’s ago her alternator went bad on the 2017 also tearing up the serpentine belt.. My first thought was .....oh shit,, how much is this gonna hit me for, then i remembered about the policy i bought. AAA towed the jeep to the Jeep dealer and a $850.00 repair cost me the $100 deductible. So while not a big fan of these policies, i just recovered 3/4 of my cost within the first year. No hassles they were a pleasure to work with.
They paid the Jeep dealer online, and I had her Jeep back on the road in less than 24 hrs.

Yes, i know the alternator and belt are $200.00 worth of parts and a good driveway mechanics could do the job in an hour. But i’m not a mechanic, don’t have a lift or a plethora of tools so I pay qualified people that know Jeeps to handle problems. So while these are not for everyone there are cases that apply for people having a plan like this.
 
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AirportDave

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BackToWrangler

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Typically i avoid these warranty plans since usually I buy new and only keep cars 3-4 years. Since I tend to rack up lots of miles for work and my employer pays me well for milage and car expense. On my new Jeep I plan to keep it longer and with current Covid stuff and most meetings now being virtual my milage has dropped significantly. So, since I plan on keeping this one a while, i negotiated the extended warranty into the price so it was not a big add. Based on the problems i read about with Jeep electronics and past steering issues i wanted full bumper to bumper coverage past the typical warrants period.

I purchased a 2017 JK for my wife and being the first used car I bought in many moons, I wanted it covered as well. She drives very little so we tend to keep her cars a long time. I got a policy thru the dealership (a GM dealer) from Ally, covered all major repairs plus all the extras for 6 years up to 70,000 miles. I paid close to $1000.00 for this.

2 day’s ago her alternator went bad on the 2017 also tearing up the serpentine belt.. My first thought was .....oh shit,, how much is this gonna hit me for, then i remembered about the policy i bought. AAA towed the jeep to the Jeep dealer and a $850.00 repair cost me the $100 deductible. So while not a big fan of these policies, i just recovered 3/4 of my cost within the first year. No hassles they were a pleasure to work with.
They paid the Jeep dealer online, and I had her Jeep back on the road in less than 24 hrs.

Yes, i know the alternator and belt are $200.00 worth of parts and a good driveway mechanics could do the job in an hour. But i’m not a mechanic, don’t have a lift or a plethora of tools so I pay qualified people that know Jeeps to handle problems. So while these are not for everyone there are cases that apply for people having a plan like this.
What dealer did you buy from and how did you get them to negotiate the warranty cost? In NY dealers won't negotiate that stuff. You make a deal on the vehicle with the salesperson and then once the price is set they bring to the accessories and warranty person who says take it or leave it. I am about to order a new JLU and have been wondering if I should get an extended warranty. I tend to buy new and keep vehicles until at least 140,000 miles so they end up being worth very little on a trade in. But with 3 new car (including a Wrangler TJ) and 2 new motorcycles purchases I have never needed to use the extended warranties, so it just ends up being lost money. So I'm leaning towards no extended warranty on this purchase...but there are all those fancy gadgets and electronics on the Wrangler now...hmm...
 

Rdmitch

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i had so many steering issues with my 2018 and the dealer knew the aggravation i had with FCA. They wanted to keep me as a customer and added the 7 yr bumper to bumper and i paid around $500.00 extra. Mopar warranty.

on my 2017 i bought that at a Chevy dealer. Since I did the design and installation of the mechanic systems at their Chevy and Buick dealerships he owed me many return favors for extra work he needed done. I bought the jeep
for what they paid for it plus 2%. They gave me the warranty for 5 yrs for $1,000.00. Which has 3/4 of the way paid for itself. My wife does very little driving so we will never use the milage limit.
 

RoadiJeff

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What dealer did you buy from and how did you get them to negotiate the warranty cost? In NY dealers won't negotiate that stuff.
In that case, give Tom Winkels at Hayes Jeep a call and have him give you a low price quote. You can buy a MaxCare warranty from any dealer, it doesn't have to be from the same one you purchased your Jeep. However, your dealer will honor the warranty the same way as if you had bought it from them.
 

BackToWrangler

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In that case, give Tom Winkels at Hayes Jeep a call and have him give you a low price quote. You can buy a MaxCare warranty from any dealer, it doesn't have to be from the same one you purchased your Jeep. However, your dealer will honor the warranty the same way as if you had bought it from them.
Can you buy the warranty after taking delivery of the vehicle?
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