Extended warranty -- worth the money?

D

Derede Arthur

New Member
Hi everyone, new Niro EV owner here! For past car purchases, we've ignored car salesmen's pitch for an extended warranty. But now with the Niro EV, with fancy-electric-high-tech-everything, we wonder if it might be useful to purchase the extended coverage. We'd very much appreciate the community's thoughts. And we're LOVING reading all these threads, so much great information, thank you all!

PS -- if folks have had success in negotiating what's covered in the extended warranty, let us know. The extended being offered to us would be bumper-to-bumper 8 yrs/125K for $2500 (the mileage being the limiter in our case).
 
An extended warrantee is insurance. Insurance companies make money because they think you will pay more in premiums vs what you will collect in claims. Insurance companies are in the business to make money and pay for extensive analysis to make sure they are on the right side of the equation. In general, if you can afford to "self insure" (pay for repairs out of pocket if they happen), it's a better bet than paying for insurance. It would be interesting to know how the fossil fuel policies are priced as compared to an EV as it could hint at the mfr's expected reliability.
 
I am in MD. Had a cadi cts before the niro. Always had extended warranty. Depends on the car. When my cts dropped the trany, it would have cost double what I paid for the warranty to get it repaired. With the warranty it cost me nothing. With the niro being new electric just decided it was worth it since it covered the entire vehicle and o got a decent deal on it.
 
We picked up the extended coverage (120 months or 100,000 miles ($2187 total) and ours was broken down into different sections of coverage like road hazard for tires, glass replacement/repair, lost key fob, etc. - things that are not covered with a manufacturer warranty).

I am notorious for finding things with tires and haven't purchased a road hazard plan yet that I haven't put to use so that section was a no brainer (though it would be great if this vehicle proved me wrong). We have already used and completely offset the cost of the glass portion (cracked the windshield 10 days after purchase, it had to be completely replaced, and of course recalibrated).
 
I declined the warranty despite the dealer offering it to me for $1500 (and insisting that they couldn't offer it for less without losing money). The most important EV components have a free factory warranty of 10 yrs / 100k miles (power train / EV battery). I replied to your message in the other thread with more details.

mf989 said:
An extended warrantee is insurance. Insurance companies make money because they think you will pay more in premiums vs what you will collect in claims.
Click to expand...

This is the reason why I declined it.
 
I only ever took the extended warranty once and it was when I bought my wife a used Fiat 500l two years ago. That's because it was an unknown car to us at the time and I didn't know if it would be reliable. In turned out to be money well spent in that particular case.

But with new cars, I expect that most issues surface in the first few years, while the car is still covered by the original warranty so I don't bother with the extended warranty.
 
I have never bought an extended warranty on a car before but did on my Kia Niro EV. My reasoning was that it is the first year they have made the full EV version (the Niro itself has only been around a few years) and who knows what might happen 5 years from now. I also plan on driving it (or someone in the family driving it) for at least 10 years. I have a 10 Year 200,000km warranty that is bumper to bumper. I am in Western Canada.
 
My offer bordered on absurd, I think it was $2,500 or something close to that. I politely declined, although the dealership was decent about it, no pressure, clear that I could change my mind within so many days.

I did consider it though because it's all pretty new stuff and I've read that Kia warranty decisions are not always what you might expect, but oh well, too late now.
 
krumbs said:
I have never bought an extended warranty on a car before but did on my Kia Niro EV. My reasoning was that it is the first year they have made the full EV version (the Niro itself has only been around a few years) and who knows what might happen 5 years from now. I also plan on driving it (or someone in the family driving it) for at least 10 years. I have a 10 Year 200,000km warranty that is bumper to bumper. I am in Western Canada.
Click to expand...

So for what I can understand in Canada the factory warranty is 5 year or 100,000 km bumper to bumper and the EV components are further warrantied to 8 years and 160,000 km. What exactly more coverage do you get for the extra 2-3 grand? Not trying to be sarcastic on anything I'm just genuinely interested as I will be making this decision hopefully soon.
 
I wouldn't...

The Kia and Hyundai warranty is already pretty good. 5yr/60k miles bumper to bumper, 10yr/100k miles powertrain (engine and transmission). Kias and Hyundais are also generally quite reliable these days. I'd only seriously consider an extended warranty on a car with questionable reliability (and if I knew it had questionable reliability, I probably wouldn't buy it unless for some reason I HAD to have that one car model) or maybe a first year model (though, I'm never buying another unproven 1st year model). If you are really concerned, put the money you'd spend on the warranty aside in stocks, in an S&P500 index fund, or in a CD that will mature around when the warranty is up (depending upon your risk tolerance) and you'll probably be much better off.
 
As an accountant I have always advised clients to take what they would have paid for the extra warranty and bank it as suggested above and continue to add to it as it then generates a good savings plan that may outlast the warranty period.
 
I have bought extended warranties for about 5 cars. For these cars they more than paid for themselves, between 4 and 5 times what the warranty cost extra, but these were high end cars with very expensive parts and I ran them to 150 to 200k miles. Oh, I only bought warranties from the manufacturer themselves, so they only bought new parts and not off brand replacements, and my car was repaired at the dealership.

For the Niro, I agree with Jeff in post #12, warranty already pretty darn good.
 
I have bought about 8 or 9 new vehicles so far, and never bought an extended warranty. Only in one case could I have taken advantage of it. And that was a GM truck where I had my A/C go on me a few years after the warranty expired. Even in that case, the cost of the repair was about the same as what the extended warranty would have cost. So I would say I am way ahead at this point...
 
I would say in general for an EV there is little need for the extended warranty. There are just so few moving parts that arent covered by the power train and battery warranties. The only time is maybe in the first years of a car maker building EVs.
 
Drivetrains are very good nowadays, I usually buy them for the very expensive electronics... many cars only have the electronics covered for 3 years... it's easy to have a $2,000 gadget give up the ghost.

Greg
 
If you are pondering the extended warranty and are going to purchase, it can affect the interest rate. My friend has bought two Kias in the last 9 years and the best finance rate was only available to him when buying the warranty. So it dropped his interest by enough to pay for the majority of the warranty. Salesman/credit person was not even aware the second time[last month]
 
While there may be exceptions in some cases where they were worthwhile I generally consider extended warranties to be a scam. If the manufacturer's basic warranty isn't that good I look elsewhere. Truth of the matter is that profit margins in retailing can be razor thin. Extended warranties are a way to boost the bottom line for the retailer. Same thing with dealer rust proofing. I live in an area where roads are salted in the winter. I use the oil spray process

You know the drill. You work everything out with the car salesperson and then they turn you over to the "business manager" whose whole purpose seems to sell you all the add ons. I just tell them outright I'm buying the car and not the extras. I've never had a problem where an extended warranty would help.
 
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