Extended warrantee

[Lyle & Cath]

As the time is drawing very near to pick up our Apex I am wondering about extended warrantees.
I have seen many people that say its way to pricey for what you get and others count their blessing for buying it. Any thoughts here?
Thanks Lyle

[Lyle & Cath]

As the time is drawing very near to pick up our Apex I am wondering about extended warrantees.
I have seen many people that say its way to pricey for what you get and others count their blessing for buying it. Any thoughts here?
Thanks Lyle

[EngineerMike]

IIRC, your new coach comes w/a 36 month warranty.
We were offered an extended warranty from CW when we upped our insurance for the new rig. $1600/year for a 4 year total warranty coverage. I.e. extneding our warranty to appliances, etc. for a total of 4 years from sold-as-new date. $1.6k x 4 = $6,400.
We'da needed all appliances to break to break even.

[Lyle & Cath]

Thanks EngineerMike that is pretty much the way I was leaning. 4 days but whose counting?

[Dale777]

Lyle & Cath,

I highly recommend an extended warranty, IF you plan to keep your coach for several years. Repairs on an older coach are very expensive.

As you can see, my coach is now 5 years old. DFS has been a great extended warranty company to work with. They have never failed to be reasonable in working with various repair shops that I have been to for multiple HWH problems, 2 different front step problems, and various other problems. DFS (Deutsche Financial Services) was recommended to me by RMechanic in Livermore, CA, since they said they were the best company they worked with in getting quick approval to do repairs and quick payment. When my coach was just short of 1 year old, I purchased a full 7 year extended warranty for about $2,900. I did not choose CW, since I received negative feedback about their slow or non-existent approvals and slow payment response from some other sources.

Dale Dowdy
2001 Alpine Coach 38FDDS

[Lyle & Cath]

With those kind of prices and that kind of rep it certainly is worth looking into.
Thanks Dale

[Cruzer]

Extended warranties (technically they're "service contracts") are pretty much like insurance - you pay up front and if you never need it, it's money lost. However, if you have a big claim, it's money well spent. A friend of mine had numerous issues with his Holiday Rambler and the service contract was a good investment for him. In my case, I've skipped having them.

Service contracts can vary in coverage greatly and generally the better ones cost more. After all, the company is basically taking in premiums based up what they expect to spend (as an average), then add on extra premium to cover their administration expenses and profit. In my case I do my own maintenance and feel I have a decent enough product that I should have less than usual maintenance expenses. At least that's the way it always has worked out for me so far anyway.

Doing your own service work generally saves in repair expenses. It's the old "you can pay me now, or pay me later" thing . You can catch things before they get too far out of hand. Generally a little oil or tightening up of something loose staves off a more expensive failure later on. If you have your rig serviced at a large diesel shop, they'll probably do a decent enough job on the engine service, but it's the little things that can add up and those they tend to overlook, rather than spend too much time on things. However, one can never predict when something serious happens and in that case a extended service contract might come in handy.

On the other hand, if you might have a problem funding a potential repair bill later on, I'd recommend a self-funded plan. You might want to consider stuffing the up-front money of the service contract into an interest bearing account that is set aside strictly for future repairs. That way you aren't paying the company for all their overhead. Plus, when it comes time to trade the coach, any existing service contract evaporates or passes on to the next guy and you have to start out all over again with a new contract for the new coach. If you had the self-funded account, you could just let it ride and would not have to pay for a new contract. Plus, when your RV days are over, you could use those funds for whatever you choose.

[EngineerMike]

Cruzer's got a great point. Insurance premiums are made up of 4 parts- 1) "loss pick," 2) estimated cost of administration of the policy, 3) estimated cost of administration of the loss(es), and 4) profit.
#4 is, oddly, usually negative; the company expects to earn money on your premium B4 giving some back in loss reimbursement, and in a competitive environment the bidding for business takes this portion to a very slightly negative number (the sellers can always "assume" they'll do well on the investment side & look good for the boss when selling losing policies).
#2 is the company's overhead (aka SG&A). #3 is the cost of adjusters fooling around w/claims when they come (i.e. internal production cost).
#1 is the actual (estimated) cost of repairs.
The cost of casualty insurance is generally in the ballpark of 2x the loss pick. So if you get an honest company and honest adjuster, and the loss pick is both honest & accurately designed, you have be the one w/the big repair bills (>2x the average repairs) to break even (I'm assuming repair insurance & casualty (like auto or homeowner's) is about the same in constructing the business case, i.e. ~2x the loss pick). If your repairs are average, you shell out for #2, #3 and maybe save a percent or two on #4. If you get a dishonest company (or even one who gets strapped cuz the investments are not working out as "assumed") who gets "picky" in approving reimbursements, then you get screwed by design.
If you take a life-wide approach & never, ever, ever buy a service contract, your odds of being better off are high. You would both need to have way-high repair costs on something, and honest coverage, to make dough buying service contracts on everything.

[Dale777]

To those who don't think an RV extended warranty is worth the money, consider this argument:

For lower cost home appliances (TV, refrigerator, dish washer, washer/dryer, camera, VCR, etc), there is NO high dollar RISK to the consumer if something breaks after the warranty, since these items are relatively inexpensive. Also the cost of the insurance policy (extended warranty) is relatively HIGH compared to the purchase price. I've seen typical contracts that were 10%-20% of the purchase price.

However, for a very high cost, complex item such as an Alpine Coach, there is a very high dollar RISK to the consumer if something breaks after the warranty. And, the relative cost of the extended warranty compared to the purchase price of the Alpine Coach is SMALL. For example, using EMike's estimate, the cost is $6,400 / ~$225,000 (discounted new coach) = 2.84%.

For an Alpine Coach, I suggest considering these factors: a) high dollar risk if something breaks, b) relatively low dollar cost of insurance, c) complex components, and d) most importantly, an understanding of statistical probability.

Yes, I do understand that the warranty (insurance) companies are playing the odds statistically, which on average are in their favor, else they would lose money and go out of business. However, we all know that odds don't apply to individual cases, of which your Alpine Coach is a specific case. Odds only apply in aggregate for a large number of cases; it's called The Law of Large Numbers in mathematics.

To fully appreciate this statistical point, surely all of you have played 5 card draw poker, and gotten upset when someone outdrew your case Ace-Ace pair when they drew 4 cards and kept 1 card. The odds are greatly against being outdrawn, aren't they, but it happens? Or, another example is a basketball player who has a career field goal shooting average of 48%, but on any one night, you might see him only make 3 out of 17 (17.6%). What happened to the statistical average? Well, it only applies in aggregate for large numbers.

Dale Dowdy
2001 Alpine Coach 38FDDS

[EngineerMike]

I think Dale completes the case nicely for extended warranties, w/a coupla points that should receive emphasis:
1) You get some comfort out of believing you're covered; that's a value that may offset the overhead in the policy premium if you are a worrier and the policy salves that worry. This is to some extent an ability to pay equation. If you can't afford a big repair bill, you need insurance, or if the thought of it stresses you out, a policy may prove prophylactic.
2) The one "statistical" analytic that should receive the highest priority IMO in selecting a policy is obviating the dishonest provider. My brother-in-law & I were heading west on 40 between Needles & Barstow w/a 45mph headwind (gusts above that), each w/a pickup camper & boat in tow. He experienced catastrophic engine failure, just about as far in 3 directions as a soul can get from a Chevy dealership (he'd had the Chevy ~18 months, purchased off the lot at Oroville Chevy including a neat extended warranty. After some struggle in logistics, Barstow Chevy diagnosed a blown head gasket/holed piston as requiring a full rebuild. Bro contacts his "Chevy" extended warranty company who "determined" he had sabotaged his engine & was not entitled to coverage, or sue us if you want. In statistics this is called a "binomial choice," or one w/only 2 outcomes- either the insurer is honest, or you are screwed (outside of statistics there are other names for it).
The Alpine "warranty" we were offered @ CW is not underwritten or serviced by CW, just sold there. The Chevy policy was not underwirtten or serviced by Chevy, just sold there. Finding an underwriter that will actually, genuinely, no I really mean it this time, cover a $20,000 engine, or TedIII's $15,000 differential repair when faced w/the actual loss vs maybe a $3,000 loss pick is the key to successful shopping.