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Old 03-31-2021, 05:22 PM   #1
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Should you buy a extended warranty?

I see a lot of people asking about whether or not to purchase a “Extended Warranty” on their Travel Trailer or Motorhome. I would also apply this to your next car or truck purchase.



As a former Service Manager at a New Car Dealership for over 25 years, I thought I would give you some insight to “Extended Warranties”, at least from the New and used car world. I would think RV’s would follow suit.



It can be very difficult at times to determine if the warranty the dealer is offering is a “FACTORY “issued policy or if it is a “AFTERMARKRT” policy. The dealer will say “It’s just like the Factory warranty. NOT!!



There are 2 kinds of extended warranties a dealer can offer (again this is the automotive world). I imagine the RV world is very similar.



The first is a extended warranty offered from the manufacturer. These are backed by the manufacturer at their franchised dealers. The dealers do not make as much profit off of these warranties as they do with “Aftermarket” warranties. And I would think that if you are a authorized franchised dealer, you “have” to perform warranty work and honor the “Factory Extended Warranty”.







The second type of “Extended Warranty” ( it's not actually a warranty) or “Service Contract” sold by dealers (New and Used) is offered by a company NOT associated with the Manufacture. The dealers stands to make a lot more profit off these types of warranties and usually has incentives if they can keep their warranty expense rate under a certain percentage.



ALSO AND VERY IMPORTANT, NO OTHER DEALER HAS TO HONOR THAT AFTERMARKET WARRANTY!



It is entirely up to the dealer or repair facility.



SOME aftermarket polices will only allow repairs be done at their approved shops.



Many dealers will not accept these polices because they refuse to go through the steps to get a preapproval before performing the work. The Extended Warranty provider may require a adjuster to inspect the vehicle BEFORE work is performed and required documentation of maintenance services. They will require a proper diagnosis and estimate of repairs BEFORE authorizing the repairs. They also will only authorize a certain amount of time to do a repair. (Example, 1.5 hours of labor time to replace a wheel bearing). Not saying they can do it quicker or take longer, that is what they will pay time wise for the job x the $ labor rate.



IE: 1.5hr X $75.00 = $112.50 Plus parts



They will also only allow so much mark up on the parts.



Both of these last statements are true of Factory warranties as well.



Many dealers will not abide by these rules and think they should be paid whatever they ask for.



Many also will not seek “Preapproval” for the repairs and then the warranty company refuses the repair.



These Warranty companies are a “for profit” company, and simply cannot do that.



Can extended warranty companies be ok? Yes



Are there horrible Extended Warranty companies. Absolutely!



Most are in the middle somewhere.



IF you have your vehicle repaired and YOU pay for the repair with intentions of being reimbursed, be prepared to have the claim denied unless it was preapproved, going through all the proper steps.. IF that was done, I would think the shop would accept payment by credit card. Though I’ve worked for dealers that would not let me do that.



Would I buy a “Factory Extended Warranty”? Possibly. Depends on what it covered for how long. And how much it cost.



Would I buy a “Aftermarket Extended Warranty”? NO. They usually look for a way to “Decline” the repairs. They are all about making money, not having a “satisfied” customer. I am sure there are exceptions.







The last thing I will say is:



With a “Factory” issued extended warranty, not only do you have the Dealer that should have your best interest at hand, IF you need more input or support, you have the Manufacture that may back you up and offer to make things right.



With a “Aftermarket” policy, if your dealer will not make it right, you are on your own.
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Old 03-31-2021, 06:53 PM   #2
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Good information!

Thank you.
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Old 03-31-2021, 07:28 PM   #3
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I figure on spending a certain amount each year purely on preventative maintenance plus the usual stuff like tires if needed. I get something for that money spent along with peace of mind that a failure of those items has been avoided.

Same with the truck. At the beginning of each season a trusted garage gets it & gets told to treat it as if they were about to take it on an extended road trip where services are few & far between. Over 200,000 miles. It has not let us down.
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Old 04-01-2021, 11:53 AM   #4
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Not scientific, but from extensive reading on this forum I have decided to put $300 a month away for maintenance and repairs. The first year I put $3,600 away and only spent about $1,700. I then added another $3,600 and now have $5,300. At the end of this year (2nd year of ownership) I will add another $3,600 to whatever I have left and keep doing that year in and year out. If I have a major repair above and beyond what is in my "account" then I will just have to suck it up and pull the money from somewhere else. I have never been a fan of extended warranties and always turn them down. As the OP stated these companies are in it for profit and do not make money by covering claims but by denying them.

Great information and thanks for the well thought out and informative post.
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Old 04-01-2021, 04:25 PM   #5
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Huh, very interesting and raises a few questions in my mind. Are RV dealers the same as the local Ford dealer, meaning do they have to service an RV bought somewhere else?

Additionally, I understood the comments about manufacturer vs aftermarket warranty extensions for passenger cars. Do RV manufacturers even offer extended warranties?

Thanks for sharing. Learn something new all the time.
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Old 04-01-2021, 04:38 PM   #6
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My four year warranty cost me around $3800 and covers quite a bit, including using a mobile service. These are always a gamble, however I have no problems with the purchase.
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Old 04-01-2021, 05:15 PM   #7
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Originally Posted by Ldubs View Post
Do RV manufacturers even offer extended warranties?
RV dealers sell so called, extended warranties but no RV manufacturer that I have ever heard of does that. I say "so called extended warranties" because none of them are actually a warranty. What they really are is an insurance policy which will pay for some failures. Some say that they are service contracts but that isn't the case at all, because none of them pay for any of the routine services or maintenance. Only things that break and even that is typically limited. They also do not typically pay for anything that is considered to be normal wear and tear. Some of them state that they will pay for only the listed items and you do not what one of those. The best ones state that they do pay for all repairs except those listed and that is the only type to consider.
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Old 04-01-2021, 08:27 PM   #8
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I will add; if anyone does decide to purchase an extended service contract, also purchase the seals and gaskets rider. Otherwise if a seal/gasket fails, oil is lost and the engine, transmission or differential fails you are out of luck, because everything that fails or is damaged because a seal/gasket failed is consequential damage and thus not covered.
It is a contract you sign agreeing to the terms and conditions therein. If you fail to adhere to any of the terms/conditions you violated the contract, not claim honored
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Old 04-01-2021, 08:53 PM   #9
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I concur with putting away some funds each month (or annually) as a reserve for repairs. Rather have all my funds going to help me vs. profit to others, plus dealing with claims including the timing involved just isn't worth it to me.
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Old 04-02-2021, 05:53 AM   #10
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Quote:
Originally Posted by boomersooner View Post
Not scientific, but from extensive reading on this forum I have decided to put $300 a month away for maintenance and repairs. The first year I put $3,600 away and only spent about $1,700. I then added another $3,600 and now have $5,300. At the end of this year (2nd year of ownership) I will add another $3,600 to whatever I have left and keep doing that year in and year out. If I have a major repair above and beyond what is in my "account" then I will just have to suck it up and pull the money from somewhere else. I have never been a fan of extended warranties and always turn them down. As the OP stated these companies are in it for profit and do not make money by covering claims but by denying them.

Great information and thanks for the well thought out and informative post.
Thats the way I look at it but don't actually have a separate account.
On average these contracts will cost more than any benefit realized. They have to or the company can't stay in business. I dont know what % of people covered ever receive more than their cost but I will guess its a small %.
The marketing of these dwell on the high cost of engines and transmissions and other big ticket items... but failure of those, if maintained properly, is rare and if you don't maintain per mfg recommendations you will be denied..
If you are the type that can't sleep at night worrying about the risk if something breaks and insure all home appliances, carry collision on older cars, etc then by all means consider extended service plans... just do it with eyes wide open and you are buying comfort and more sleepful nights and comes at a cost. Dont belueve for a minute that, on average, you will be money ahead.
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Old 04-02-2021, 05:58 AM   #11
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Thats the way I look at it but don't actually have a separate account.
On average these contracts will cost more than any benefit realized. They have to or the company can't stay in business. I dont know what % of people covered ever receive more than their cost but I will guess its a small %.
The marketing of these dwell on the high cost of engines and transmissions and other big ticket items... but failure of those, if maintained properly, is rare and if you don't maintain per mfg recommendations you will be denied..
If you are the type that can't sleep at night worrying about the risk if something breaks and insure all home appliances, carry collision on older cars, etc then by all means consider extended service plans... just do it with eyes wide open and you are buying comfort and more sleepful nights and comes at a cost. Dont belueve for a minute that, on average, you will be money ahead.
I don't have a separate account either, hence the quotations marks around the word "account". I just know that I cannot spend that money on other things, those funds have a dedicated purpose. Maybe they are in a separate "mental account".
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Old 06-17-2021, 10:32 AM   #12
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I wish I had read this before I purchased an After Market extended warranty from the dealer when I purchased the motorhome. It cost $8,000 and has been basically worthless. Especially today when it is very difficult to find an "authorized dealer" who will work on all the little things within the motorhome like electrical, plumbing, shades, cable reels, power circuits, steps, AC units and electric awnings. If you are a do-it-yourselfer like me, save your money! The company wont pay unless you go through a dealer. I have also found that many dealers have had trouble finding competent help, especially electricians. Everyone pushes extended warranties because they are good money makers. Save your money.
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