Why NOT to Buy that Extended Warranty?

I’m definitely considering buying an extended warranty on the clarity before the 3 year/ 36k mark mainly because I don’t trust the Infotainment systems in cars. My Hyundai Sonata navigation system gave out just after the warranty period and they wanted $3k to replace it. I ended up living without and just bought a cd mount for my iPhone for the following 7 years of ownership. I really don’t want to do that again... and the clarity infotainment system seems even more tied into the car than old systems. You would be unable to adjust all kinds of settings in the car if it went out.


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I got some "what-if" quotes from Hyannis and unless I am misreading the quotes it appears to be counterproductive to not wait until near the end of the regular warranty, and you could even end up with a shorter warranty depending on when you purchase it.

First quote was for purchasing at 2,000 miles which is about where I am at now:

Code - Years - Mileage - Rate
D82 - 8 - 120,000 - $1,564.00
* Coverage for a New Honda vehicle begins when the vehicle is originally put into service at zero miles.

So this would be coverage for years 4-8, at $312 per year (1,564/5)

Second quote is for purchasing at 7,000 miles which I estimate I will be at around December:

Code - Years - Mileage - Rate
F52 - 5 - 120,000 - $1,319.00
* Coverage for a Near New Honda vehicle begins on date of plan purhcase [sic] and expires at the end of plan terms or stated mileage, whichever comes first.

In December I would have over two years of regular warranty left, so rounding the months the five year extended warranty would only cover years 4-6 not 4-8. Am I reading this right? If so that works out to $439 per year (1,319/3) not to mention being uninsured in years 7 and 8.

The third quote was for purchasing at 30,000 miles which for me would likely be just before the 36 month regular warranty ends.

Code - Years - Mileage - Rate
F52 - 5 - 120,000 - $1,419.00
* Coverage for a Near New Honda vehicle begins on date of plan purhcase and expires at the end of plan terms or stated mileage, whichever comes first.

Since I would be near the end of the regular warranty the extended coverage would once again be for years 4-8. And the best deal at $283 per year (1,419/5)

 

I got an even better deal by buying the D80 at the same time I bought my Clarity. $1304/5 extra years = $260.80/yr. I got my dealer to match Hyannis Honda’s on line price.
FWIW, my dealer’s price was a little over $2500!!!
Only trouble for some is Hyannis can’t sell it to owners in Fl or Ca. (But you could probably still use their on line quote to have your dealer match it since I bet they won’t know it’s not available to you.)
Between the inexpensive 8 yr warranty, $1000/yr fuel savings, the $7500 tax credit, and lower maintenance, my Clarity is my super saver!!! And some of y’all get state, local and/or utility incentives plus the $6000 Honda savings in some states. It’s cheaper than a used clunker!

 

I am leaning more towards getting extended warranty but ship around for deals, because there are so much integration in the screens now.

My old 2001 Accord V6 was reliable, we bought extended warranty (I forgot if it was $600 or $800), and we ended up with a broken rear sway link and we had to pay $50 deductible. That's all the repair done until it was sold at 160k miles.

I opted not to buy a extended warranty for our 2011 Honda Odyssey, which my family has been stress testing it since day 1. And now we have 91k on the van and only non-wear item replaced were the CV boots.

And we have a 2015 Accord (4-banger) with extended warranty. It was part of the deal when we shop for the final OTD price. It got 2 screens (with navigation), and then all the sensors for LDW and FCW, more stuff means more risk of repair in the future.

So I can probably live without the extended warranty, but it would be nice if I can find a deal for it.

 

I am close to 6K and am still on the fence. What exactly are we getting with D80 or any Honda Care plan? CA coverage covers most items for 10-15yrs/150K already. So only suspension, non-hybrid motor, electronics and whatever roadside assistance+road hazard coverage? I called Honda Care and was told software updates is not part of the coverage. So any software tech bulletins will still cost $$ to install.

 

Not true. What you are buying is the risk management, eg, certainty. There is a dollar value for that. So the breakeven value is the expected cost of the repairs plus the risk premium. If you don’t include the value of having managed your risk, you are saying that certainty is worth nothing. I don’t agree with that.

 

Each person's situation is different. For me I long ago decided not to buy extended warranties. My thinking was if I buy it for one product then it makes sense to buy it for all products. The list can be lengthy including appliances, boats, flat screens, cars, etc. Were I to buy an extended warranty for each one it could add up to thousands of dollars. I decided rather than spend my money on insurance premiums (which is what a warranty is) I'd rather self-insure and keep the money for any related expenses. Over the years I've had almost zero extended costs. My 46" flat screen, AV amplifier, speakers, DVD player, all are 2007 vintage and working fine. I'm careful to put reliability as the top parameter for anything I buy so rarely have things break. Our 2005 Toyota 4Runner has had exactly one failure (not counting things like tires, filters, etc). I will have to have the front seats recovered next month but no extended warranty would cover worn leather.

 

The other problem with most extended warranties is trying to collect requires going through many hoops, and the outcome is not guaranteed as the warranty company often disputes the claim. At least that is what I have heard as like you I have never purchased an extended warranty and I can't think of anything over the years that failed that I wished I had. I am pretty sure however that if I added up the amount of money I have saved over the years by not purchasing them it would be a sizable amount.

One difference in this case is that if purchasing Honda Care warranty, not one of the third party warranties, collecting is pretty easy from what people report as it gets recorded into the Honda system, so when you take your car to the dealer for covered maintenance the extended warranty is automatically applied. So that would remove one of the negative aspects that usually applies to extended warranties.

 

I bought the 7yr 120k warranty for $1500. It's the first time I got an extended warranty. I'm in CA, but there's plenty of parts that are not covered under battery/emissions. $1500 amortized over seven years I wasn't exactly going to lose sleep over buying it.

 

But what are those other parts? I assume they are all conventional parts such as suspension and ICE engine which are pretty reliable?

 

I got taken in a moment of weakness to the tune of $2100 for the HCEW. I’ve downloaded the cancellation form and will be having the fun experience of fighting the dealership soon to get it canceled.

 

If you want to buy it (and I personally think given the integration and the cost of the infotainment system, it may be a good idea to buy it), I'd return the one you bought from a dealer and buy it from one of the much less expensive providers, or get the dealer to price match

 

Yes, those and the interior parts, etc etc. Like I said, maybe it will be useful maybe not. For seven years and 120k miles, I don't have to worry about something failing...and we drive a lot.

 

I remember that when I was looking into the Honda extended warranty that the catalytic converter was one of the things not covered. Useful material here: https://www.saccuccihondacare.com/coverage.php

 

Yes, but the converter is already warrantied for 8 years, 80k miles, so this only matters for those who buy the 100k or 120k plans (since none of the extended plans go past 8 years)

if you're in California or one of the other piece of States it's 15 years/150k miles

 

Honda charges more than $2,000 for each of the two catalytic converters for my little 13-year old Insight. I guess I should be grateful they still stock them because they no longer stock every part that can wear out. I bought the 8-year extended warranty for that car but nothing except the not-covered HV battery went bad until this year.

 

One thing to keep in mind is that if you own any other Honda cars you get tow coverage for them included in the warranty. I got to use it to tow my 2006 Pilot when a transmission cooling line went out and it couldn’t be driven. Saved me a $100 tow fee!

 

And that also applies (along with roadside assistance) to any family members that drive Acuras.

 

I would just add to this discussion. I'm the kind of person that drives each car as long as humanly possible. My last car was bought brand-new and driven for 16+ years. I would of gladly driven it more years if I could. That, and I tend to buy quality, and keep quality. Rarely I find something (really anything) that I am simply delighted to own. A one of a kind or something so pleasant I'd be glad to be the only crazy fool to have bought it. And actually that's two mobiles in my life. The first, a Honda 1982 'super cub' scooter (Honda Passport). Easy to operate, easy to repair and fabulous on gas. I can commute on my scooter to and from work for 2 weeks on less than 1 gallon of gas. Love it.

My second of course, the Clarity. Absolutely love the car, and mostly I love the lack of visits to gas stations. In my case, I typically go to buy gas at a station once every two months, and did I mention my typical fill-up for 1/2 tank is like $12. I "fill up" at home nightly, and my electric cost is low.

Anyway, Clarity is a car I would like even if it were just a normal gas-mobile, but I love it because it's not.

So how does this relate at all to a warranty discussion? I don't want just a car, I want *this* car. I want it to last as long as it can. I'll gladly pay the premium for extended warranty -- which to me is like insurance. I actually hope to never use it (and will be glad I paid the money if I don't use it). Also, I find $1500 or less to be irrelevant in the the total cost of a vehicle at $37,500. So what? 4%. Buy it (or do not).

-Dan

PS: My car is almost 1 year old. I am literally delighted to drive it each time I get in. I've never owned a car I was excited to drive a year after I bought it (prior to Clarity)

The other tidbit I'd add, my family are all big people, some taller than 6'4". Good luck driving a Prius prime if you are a big person. Nothing wrong with Prius Prime, love it even if I cannot get into it easily.

 

Mainly electronics, such as power windows/mirrors/doors. But don't forget air conditioner and infotainment, which are probably the most costly. Honda doesn't seem to use TPMS sensors, so you don't have to worry about that (otherwise dealers charge $200+ for them).