Quote:
Originally Posted by Radiation Joe
What people seem to forget is that a warranty costs more than the average cost of repairs over the life of the warranty. If it didn't every insurance company in the world would be out of business. We all know how little money insurance companies make; right? For every one person that gets his money back from the extended warranty there are two others that don't.
REPEAT AFTER ME:
An extended warranty is a sucker's bet.
Of course there are exceptions out there. The underwriters that wrote the Audi RS/6 warranties all took it in the shorts. CPO added a couple of grand and change to the cost of a used RS/6. No service on that engine (twin turbo V8) ever got out of the shop for less than $3k. Flat rate for an oxygen sensor change out was over $3k.
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It is not a sucker's bet, it is pooling risk and they are skimming of the top for profit.
What you get for your money is literally "insurance" against the risk of very very costly repairs. It's the same thing the collision coverage or even *gasp* health insurance.
What I (and I surmise the OP) want to know is what is the size of the risk? Am I look at a $25,000 bill if x happens? What are the odds?