Good companies to cover work on cars?

Trying to avoid the keywords that might kick of a spam storm....

Wife and I are thinking about finally buying a "nice" car.  Most likely European, less than 5 years old.  We will be making payments, but with a big chunk down and plans to pay it off early.  This will be her car, so I want to make sure it's covered for any issues. 

Can anyone recommend a good w@rranty (putting the @ to reduce the spam) company?  I know I can go online and find about a bazillion companies and enter my info so I can get phone calls and emails until I'm dead and buried.....  I can also find sites that compare companies, but always assume they're getting paid to promote one over the other. 

Does anyone have a recommendation or a site with a true comparison of companies that are worth dealing with?  Going CPO or CarMax is always an option, but I've found quite a few at other dealers with different options and better prices, but always question what their coverage options would be.  I'd prefer to handle it like the loan and have something ready to go before I go into a dealer. 

-Rob

IME the only extended warranties that are worth considering are the ones where the manufacturer is partnering with the warrnaty company and branding it with the manufacturer's name.  They are more expensive, but that relationship gives the dealer some leverage with the warranty company when they start getting squishy about covering things.  Generally you can only get these if the car is still under the factory warranty, because that means that they know that it doesn't have major problems going into the contract.

As someone who ran repair shops, I have dealt with dozens of w@rranty companies.

1- They are NOT w@rranty companies.  They are insurance companies.  Their goal is to make money, so on the average they collect more from you than they pay out.  Part of their revenue is from investing the assets they have, but the bulk of the money comes from your pocket and they're banking on the fact that you'll pay more than the benefits you receive.

2- Being an insurance company, their primary goal is to deny claims in the hopes that you'll just roll over and pay for it.

3- There are two types of customer that brought me these coverages:  A) the ones who didn't read the fine print to see what is actually covered, they expect a free repair, and wonder why their copay on $4000 of transmission work is $2800.  They get livid and make it my problem.  B) the ones who just say "I guess it isn't covered, so here's my credit card."  In either case, I have never (and I mean never) had one of those deals get done properly.  Either the company is correct and the customer gets ticked, or the customer gets screwed but just pays anyway.

4- These companies are on the repair shop's side, not yours.  I have had them ask me to falsely claim that a caliper was stuck or a tie rod end was faulty so they could deny the claim.  One asked me to edit the RO so that some of the parts expenses were shifted to a non-covered category like shop supplies.  I have had them offer me "incentives" (money) if I could convince the customer to pay instead.  I actually (can't make this E36 M3 up) had a younger female agent offer to send me nude pics, and I don't think she was joking.

Listen, I'm sure they're not all terrible, I've just never dealt with an honest one.  They are shady AF.  As long as you read the fine print, know what is and isn't covered, and you're willing to have about a 75% chance that you'll pay for the policy than you'll get in return, go for it... but expect them to fight you tooth and nail every step of the way.

In reply to Curtis73 (Forum Supporter) :

Nail on the head you have hit. Instead of throwing away that money, put it into an account to use later. Then if you don't use it, you have a nice vacation fund or college fund or whatever. I wouldn't ever buy one. Ever. 

Interesting.  I had one through GE financial many years ago (they don't offer them anymore) on a BMW.  My local BMW guy said it was the easiest company he'd dealt with in his 20+ years in business.  So, I assumed there were some good companies out there.  Same on a 2nd gen MINI a few years ago (different company) that was at the dealer multiple times. I made sure to ask the service guy if there were any issues with them and he said they were easy to deal with.  But, that one's only sold through specific dealers (IIRC). 

Sounds like I'll either need to go CPO/factory extended or CarMax.

-Rob

I know there is one out there.  Will get that info on Monday.

99.9% of the time they only cover powertrain, by which they mean the oily bits in the engine.  If you have leaking gaskets they don't cover that.  If you need to replace a gasket to effect a repair they don't cover that.  If your car needs anything else at all, and I assure you that internal engine work is both very rare nowadays and much cheaper than some other things.... they don't cover that.

In reply to Pete. (l33t FS) :

Agreed, depending on the company.  If you have a collapsed lifter, it's covered...  For the $20 lifter and the 0.2 hours it takes to replace the lifter.  The $3000 worth of gaskets and labor to R&R everything else to get to the lifter might not be covered. (exaggerated example)

rob_lewis said:

Interesting.  I had one through GE financial many years ago (they don't offer them anymore) on a BMW.  My local BMW guy said it was the easiest company he'd dealt with in his 20+ years in business.  So, I assumed there were some good companies out there.  Same on a 2nd gen MINI a few years ago (different company) that was at the dealer multiple times. I made sure to ask the service guy if there were any issues with them and he said they were easy to deal with.  But, that one's only sold through specific dealers (IIRC). 

Sounds like I'll either need to go CPO/factory extended or CarMax.

-Rob

Of course he would say that.  He gets paid for the repair regardless of who pays for it.  The fact that you have a "warranty" (and the fact that he buttered you up) means you're A) far more likely to take the car in for service and B) far more likely to take it to HIM.  Once you sign the RO, he gets paid in one of three ways.  1) you roll over and pay when the company denies it, 2) the company pays properly, or 3) it ends up that you abandon the car by not settling the bill within your state's aloted time and he files for a repair lien and takes ownership of the car.

I used to love aftermarket warranties at my shop.  I tripled my number of payees.  Either the customer, the company, or the sale of the car after the repair lien.  Warranty jobs are a lot of work and a high percentage of them ended with burned bridges and lots of cussing, but the shop had a really sweet Mazda pickup for a parts hauler and a Range Rover Disco as a loaner that both came from disputes over warranties.  I remember a Beetle convertible that we ended up selling, a DSM that one of our techs bought and turned into a rally car... the list goes on.

Edit:  You can't talk to the beneficiaries of these policies. (shops/companies) You need to talk to customers, and people like me who spent 7 years in 13 shops dealing with the "other" side and no longer benefit from them.  If I were still in the business and you came into my shop, I would say "definitely get that policy...we work with a dozen different companies," because I want your work in MY door, and if you have a policy that I recommend, I get your business with a much higher guarantee of being paid for it.

I didn't even get into the time aspect.

If you bring me your car and say "I need brakes and a clutch."  I give you a quote after discussing options and you sign the RO.  I call the parts supplier and tell the tech to start tearing it apart.   You're done the next day and you swipe your card for $1700.  If you bring me the same job and give me your warranty company, I have to let the car sit while I work up a quote that will have the best chances of being approved.  Three days later I'll get a call with their proposed coverage (or a flat denial).  I go back and forth for 3-4 days, then I have to call you and say "the warranty will cover $800 of your $1700 repair," to which you lose your E36 M3.  Then I wait another few days while you take a swing at the agent who will explain all the reasons why your policy doesn't cover X, Y, and Z.  Sometimes they have specified parts that need to be used.  Sometimes (rarely) they even send their own parts which can add a week.  Then once my tech is in there doing the work, they notice a wasted motor mount.  I have to repeat the whole process to do a supplement.  A fair number of times on larger repairs, they will fly or drive an adjuster to the shop to inspect the parts themselves before approval, so that adds another 3-7 days.

Meanwhile, you're saying "I've already paid in $1000 in premiums for this policy, I'm getting shafted by having to pay most of the repair," and you end up taking it out on the dog.  Please, for the love of dogs, do lots of homework first.

Pete. (l33t FS) said:

99.9% of the time they only cover powertrain, by which they mean the oily bits in the engine.  If you have leaking gaskets they don't cover that.  If you need to replace a gasket to effect a repair they don't cover that.  If your car needs anything else at all, and I assure you that internal engine work is both very rare nowadays and much cheaper than some other things.... they don't cover that.

Yes, read the terms of the coverage very closely.  One suggestion I've heard (and followed) is to only buy contracts where it specifies what ISN'T covered, rather than one that specifies what is.  Also be aware that anything it says isn't covered will never be covered, even if it needs to be done as a part of something that is covered.

Over the last 22 years I've owned three Audi daily drivers from new or near-new (B5 S4, B6 S4, C7 S6), and have had Audi-branded extended warranties on all of them to take coverage out to 7 or 8 years old.  The company backing the contracts is different in each of the three, but IME it was the relationship with the manufacturer that turned them from being the outright scam that's common in the industry in an actually useful product.

In all three cases I've followed the "what isn't covered" advice above, and the only annoying/unexpected part about it was the need to pay to re-align the car several times in quick succession when replacing failed suspension components on the B6.  That B6 was the one that paid for itself (and, frankly, the warranties on both other cars too) when the engine had to come out to replace an O-ring in the crank carrier.  All I paid on that one was the $100 deductible and the fee for alignment.

Like Curtis says, it lengthens the time that the car is in the shop vs a factory warranty because of the need to get the warranty company to approve the repair.  My experience was that it usually only added an extra day -- probably because of the fact that it's happening at a large Audi dealer where they do a lot of business.  They did cover repairs at other shops, but I never tried to use that.  OEM relationship is also likely why I've never experienced them trying to push aftermarket parts as a cost-saving measure.

In reply to codrus (Forum Supporter) :

The commercials on TV even tell you they don't cover everything.  They show a person who says "my car needed an engine AND a transmission, and it would have cost me eleventy billion, but thanks to [insert company], it was covered."

What was covered?  There's just a bit of fine print at the bottom that says "see policy for deductibles and terms."

Then they show this big graphic of a repair order with a $6000 total and draw a red line through it, which psychologically makes you THINK it was free, but in reality it's subject to a million terms and conditions.

They also (at least the ones I've seen) include a clause in the contract that makes you sign away your rights to litigation.  They make you agree to arbitration of their choice.

Curtis73 (Forum Supporter) said:

I didn't even get into the time aspect.

If you bring me your car and say "I need brakes and a clutch."  I give you a quote after discussing options and you sign the RO.  I call the parts supplier and tell the tech to start tearing it apart.   You're done the next day and you swipe your card for $1700.  If you bring me the same job and give me your warranty company, I have to let the car sit while I work up a quote that will have the best chances of being approved.  Three days later I'll get a call with their proposed coverage (or a flat denial).  I go back and forth for 3-4 days, then I have to call you and say "the warranty will cover $800 of your $1700 repair," to which you lose your E36 M3.  Then I wait another few days while you take a swing at the agent who will explain all the reasons why your policy doesn't cover X, Y, and Z.  Sometimes they have specified parts that need to be used.  Sometimes (rarely) they even send their own parts which can add a week.  Then once my tech is in there doing the work, they notice a wasted motor mount.  I have to repeat the whole process to do a supplement.  A fair number of times on larger repairs, they will fly or drive an adjuster to the shop to inspect the parts themselves before approval, so that adds another 3-7 days.

Meanwhile, you're saying "I've already paid in $1000 in premiums for this policy, I'm getting shafted by having to pay most of the repair," and you end up taking it out on the dog.  Please, for the love of dogs, do lots of homework first.

All of this. Back when Honda was replacing torque converters on mdx's one of the aftermarket warranties would send in a tc to use. Not a single one was worth a E36 M3. We would replace them 2-3 times before the customer would come in angry as hell. The second and third r&i bill was on the customer. Most gave up and just paid for an oe Honda one and contacted the bbb. 
 

as I said earlier, rather than wasting 3-4K on a E36 M3 insurance policy make an account to put that same 3-4K yourself and use it as needed. I don't know why people insist on throwing money away like this when they can affect their own insurance policy with their own money and if it's not used you still have that money. 

It's called self-insuring. It's how the Amish do it.  

I concur with all of the above. Colossal waste of money. 

The only time I've seen it work out was the hilarious example of Doug DeMuro's Range Rover. I doubt CarMax still offers this warranty on stuff like this. https://youtu.be/MzQCj-dbgN0

Everything everyone else said. Save your money for when or if a repair comes up. My in-laws are extended warranty buyers and I can't bare to watch them throw away money. 

The only warranty work I've ever had done on anything I've ever purchased was a built in microwave that broke after making three bags of popcorn. If I hadn't made all the effort to install it above the oven I would have just returned it to the store for a new one.