quickcat

So trying to decide how to best spend my money in relation to car maintenance somehow sounded like I can't afford my car. Thanks for that assumption. Did I say I can't afford a repair bill? How does paying $3000 for a warranty equate to cannot afford a $3000 repair? Maybe I should re-read my first post to see what may have been unclear.

The point of my original question was to gather data to make an informed decision. That decision is whether buying the warranty is likely to save me money in the long run as I support the life cycle of my car. From what I am reading in this thread it doesn't sound that way.

I agree with most folks here. Buying this warranty is probably not in my best interest.

Thanks all.

Matt

quickcat

Ok I think I know what is going on here....

"My problem is this.... what is the likelihood that I will incur repair costs that will go over $3k during the time of the coverage?"

Since $3000 is the cost of the warranty (rounded down to the nearest thousand) that is the break even point for my investment. My question was, what are the chances I will reach that level in repair costs over the life of the car? While I own the car will it break enough to require over $3000 or repairs? If so, then buying the warranty is in my best interest, if not, then I wasted money. This is where the risk based decision part comes in. You see, just like insurance companies, deciding to buy this warranty coverage is based on my exposure to the risk of having costs over what I could be covered for over the period of coverage. The question I posed to the forum helps me quantify the risk exposure I have and now I have made my decision.

Thanks for the input.

Matt

FortMorganAl

You got it. ALL insurance from insuring a new toaster to a $1B manufacturing plant is going to, on average, lose money for the buyer and make money for the insurer. If the insurer ever thought they would lose money they wouldn't sell the insurance. It is NEVER in your best interest on average to buy insurance. The only justification a buyer ever has is that they can not afford a loss. The buyer should know that, on average, they are going to lose money but that is the price they pay to avoid the possibility of a change of lifestyle they will incur if there is a major covered event.

If you can afford the loss you should NEVER buy insurance. You should self insure. That means YOU are the insurance company which means YOU get to make the profit on the transaction. You get to collect for "selling" the policy to yourself. You get to collect for the overhead of administering the policy. You get to collect for investing the claims reserve, and most importantly, you get to collect the profit for growing the "business". That is basic economics 101 which, it seems, no one teaches any more.

Your initial question implies that you would not be able to afford the repairs if they occurred so you wanted to know what the probability was. If you can afford the repair costs, what difference would the probability of occurrence make? If you can afford the repair costs you just pay them if they occur just like you fix your lawn mower if it breaks rather than worry about insurance and risk probabilities. The risk probability is only important if there is a probability that the loss is so large that it will change your life. If you can afford a Corvette rather than a Camaro then your life will not change no matter what repair costs you incur.

Walt White Coupe

If only people could understand this seemingly simple concept. Every time I hear "Peace of Mind", I want to throw up.

Chiselchst

I bought a 5 year 0 ded Platinum Chevy warranty for $1350 From Ken on this forum), partly for the resell if I order a 2016 as planned...
The 36 mo was expiring shortly after I purchased my '12 GS.

donnie1956

I know a couple of guys doing time in Federal Prison that sold extended auto warranties. Remember Fidelity? Located in Wentzville, MO. They scammed thousands of people.

quickcat

I understand.... I was sorta viewing this thing as a warranty (which is what they call it) and thought if I have repairs during the coverage period that have costs that exceed the price of the warranty, I would save the difference. Based on what I know about these cars and the statements in this thread I feel that the probability of having repairs that exceed the cost of the policy are low and buying the extended warranty is not money well spent for me.

Matt

Walt White Coupe

Matt,

I think you have come to the logical conclusion that the odds are in your favor by self insuring.

PatriotsGuy

my 2008 c6 17000 miles is a p.o.s. already giving me unknown problems shift knock delayed acceleration weird noises loss of power. Highly recommend warranty im assuming you make good money if you drive that type of vehicle ,well worth it. Thats like not having health insurance youll want it in case shyt happens.

Gearhead Jim

Most people here have very good reliability with their C6, and therefore make a good case for self-insuring.

Our experience has been different.
We have owned three new Corvettes (2001, 2006, now 2009). They are great fun, but they have also been the three most unreliable cars we've owned in my 50+ years of driving.
Each Corvette, we bought the GMPP extended warranty early in the car's life, and each time we made big money by doing it. I don't have all the old records, but a good guess is that we averaged twice the cost of the warranty back in repairs on each car, including rental cars and hotels that GMPP covered when we had problems on road trips. It's so nice to just drop the ailing Corvette at a dealership, hop into the rental car provided, and say "call me when it's fixed."
With all the repairs we've had, none of them have ever been inside the engine. So when people talk about the reliability of the LS2/LS3 engines, they're correct but missing a major point- the rest of the car, especially electronics, can eat you alive.

Our current 2009 GMPP cost $2,215 (Ken Fichtner price, 0 ded) and runs until Feb 2017 or 95,500 miles; we will hit the mileage limit first because we drive ours a lot. That works out to a little under 4 cents per mile.
We can get the new GMEPP for an additional 48 months/48k miles, Ken would have to charge us $5,220 for that one, which works out to almost 11 cents per mile. Of course, the frequency and cost of repairs go up as the miles and years increase, but I'll probably skip that one and self insure. Other possibilities would be to buy a used but lower mileage C6, or even a C7.

Third-party (aftermarket) warranties are usually something between a bad deal and an outright scam, but I've heard a few good stories. Investigate very carefully if you consider one.

Everyone says you should only insure against losses which you couldn't afford to suffer, but there is one other good reason- if your chances of having a covered loss are significantly higher than the insurance company understands. I'm not talking fraud, just my experience from driving crappy quality GM cars for several decades. We went Japanese for the family cars about thirty years ago and never looked back, and our Corvettes have reinforced the wisdom of that decision. But the Japanese don't make a Corvette...

tuxnharley

Not sure I agree with this non quantitative analysis, depending on what assumptions the poster had in mind. I'll start by stating some of my own.

If you want to achieve equal performance (more or less) with the Corvette you are presumably avoiding, the top of the line Camaro (Z28 with an MSRP of $73,000, etc) will cost you about the same or more as a Corvette. So where is the savings to invest?

Additionally then you will have much of the same performance related equipment and associated durability risks as a Corvette - LS7 engine, etc. Where's the reduced risk and/or repair savings?

Of course you could avoid all this by getting a base model Camaro V6, but then you wouldn't have the performance equivalency.

Personally, I'd get the Corvette. Mine have been pretty reliablle and a lot of fun!

AORoads

tuxn, I get your point but I think Ft. Morgan AL's post(s) is a little bit less about the equal horsepower of one car to another, and more about affordability. To use an analogy, sometimes you might want a 5,000 sq. ft. house with 5 bedrooms and a 25x25 master br. But you can only comfortably afford a 3 bedroom, which is what you really need, and a 12x14 master br.

Wanting a two-seat 430/400 hp car is nice, but owning and maintaining it might be quite something else. And while some might claim Gearhead Jim's experience is "only" over several cars or decades, it tends to match some of the industry standards and measured quality and repair issues. Still, there are many good things to say about the improvement of quality, domestic or foreign.