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URL:  http://boards.fool.com/extended-warranties-by-design-cost-more-than-30337635.aspx

Subject:  Re: 2003 Cad Escalade Date:  10/24/2012  10:17 AM
Author:  jeffbrig Number:  69558 of 71421

Extended warranties, by design, cost more than they are likely to pay out. That's how the company providing the warranty makes money. What you're doing is gambling that you'll be the in the small percentage that has a major failure that would cost more to repair than the cost of the warranty. You're betting that your car will be way worse than the average for its make/model.

Extended warranties sometimes limit what's covered to major powertrain components only. Burn up a window or seat motor and that might not be covered. And anything that might be expected to wear out is generally not covered - brakes, clutch, etc.

Price one out, but odds are very strong that putting that money aside will pay off for you in the long run.

When I bought my last car, I paid $1400 for a 7 year extended warranty. When it expired, it had covered exactly 1 repair - an $80 part that I could have changed myself in under an hour. Just like Vegas the house almost always wins.
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