Are Extended Warranties Worth The Money?

Are extended warranties worth the money?

I’ve spoken about this before but feel it’s something you can never have too much information on.  It’s a pretty safe assumption that we all know at least one person who “knows” warranties are just a scam dealerships use to get more money.  That same person is also the person who can confidently fix any issue that arise in a vehicle.  I thought like that for a long time. But that was also a long time ago, when cars were simple.  Also, the money I “saved” by doing the work myself was washed away by the time I spent and messes I made, so… yea.  To best understand why warranties are a good idea it’s important to understand modern cars.

What Has Changed?

Nowadays, the sheer multitude of advances in safety, emissions, power, and overall efficiency have made all modern cars extremely complex.  Sure, it’s no secret that European vehicles are more expensive to service–not that they are inherently more prone to issues–but because they are the cars pushing the boundaries of what’s possible in a road going vehicle.  Whether it’s the uncompromising blend of comfort, amenities, and mind-blowing off-road capabilities of a Range Rover or the also-uncompromising luxury, safety, and neck-destroying performance of an Audi S6, European vehicles have a clear goal: to do as many thing as perfectly as possible.

This trend is something we see across the entire spectrum of manufacturers.  Even the Japanese marques of absolute reliability like the Toyota Camry and Honda Accord are now loaded with safety, performance, and efficiency features, and while they are still built incredibly well, they’ll never be as indestructible as their older siblings from the ‘80s and ‘90s.  And the reason for the decline in lifespan is not due to less stringent quality standards.  They just have so much more  going on inside and behind the scenes.  And more parts means a higher chance for something to eventually go wrong.

Are Modern Cars Less Reliable?

No… and yes… This may be the most competitive time in automotive history.  If you need any proof of that, just look at the ever increasing varieties of models amongst manufacturers.  One company makes a niche model like a fastback SUV, and everyone else has to follow suit (see: all German SUVs).  And while it may seem like a big, well… pissing contest, it’s actually a really good thing.  Most models in a manufacturer’s lineup are basically the same vehicle, with just some minor changes to the body. All of the electronic and mechanical bits underneath the skin are the same. That means, higher production volumes for engines and transmissions, etc, which typically equates to problems getting sorted out early on.

Even with this high volume approach to building cars, they are still incredibly complex machines.  Anyone remember the struggles of driving cars from the ’80s or ‘90s in the snow? The traction control was basically just a sensor that pumped the brakes–not much help if you weren’t using snow tires.  Now though, cars are self-monitoring almost every aspect of every component in them. Those components are monitoring things like wheel slip, yaw, torque, steering angle, and more, and they’re doing it 100’s of times a second.  A second!  And if one of the 10,000-plus components fail, it’s going to require work.  So, yes newer cars are more prone to periodic issues, but they also do so much more.  If you want to drive a 1992 Toyota Camry with roll-up windows and no A/C for the confidence that the car will never stop running, go for it.  But, just like my old Nokia phone, while it was indestructible, I’d still take the periodic issues with my iPhone XS  over the Nokia all day long–and yes, I have a warranty on my iPhone.

So, yes.  I 100% believe in the value of an extended warranty, but because not all warranties are the same, it’s important for any consumer to do their homework.  Granted, that’s not always the easiest thing to do, so we’ve tried to help as much as possible by being 100% transparent about the details of any policy we sell.  But rather than ask you to just trust us just because we say we’re honest and transparent, we absolutely encourage you to deep dive into our online reviews.  And not just the good ones, but the bad reviews too.  See what people say about the products we offer.  Because, while nobody can be perfect all the time, how they deal with an issue is a telling sign of who they really are.  At least that’s my take.