Car Maintenance Contracts

[Geila]

When I bought my car, the dealership pushed their maintenance contract pretty hard. Since they were pushing it so hard, I figured it's mostly profit for them so I didn't buy it. Dh thinks maybe it's a wise investment so I wanted to get y'all's opinion on it. The contract covers a bunch of stuff every 7,500 miles, even a loaner car if you need it, and the cost is $1,800 for 5 years or 60k miles. We're in a HCOL area if that matters. They offered us a $300 discount after we refused it, so we can possibly buy it for $1,500.

What's the collective wisdom on these things? Wise investment or waste of money? (They claim that by prepaying for the program you save over 50%, but I'm not really buying that.)

[catherine]

In my mind, it's a philosophical argument, almost. I tend to be against extended warranties/maintenance contracts, and DH swears that they've "saved" him hundreds of dollars. However, I truly don't believe he took into account the price of the warranty.

In my experience, good, brand-new cars shouldn't require much maintenance over a 5 year period. I personally would place my bets against needing a warranty/maintenance contract. But I tend to try to avoid "what if" purchases. And I KNOW that these warranties are significant profit centers for the dealers, which ought to tell you something.

And I'm certainly not an expert, so I'll let others weigh in.

[herbgeek]

Personally, I think its a waste of money. Cars are now so reliable, they rarely need service. I certainly don't pay $300 a year on unexpected maintenance. If there is a design flaw, you're covered anyways (I don't know a new car that doesn't at least come with a 2 year warranty).

[Teacher Terry]

Waste of money.

[Geila]

This contract is for regular maintenance (oil change, tire rotation, cabin air filter replacement, wiper blade replacement, etc), rather than repairs.

[mschrisgo2]

Waste of money.
I have a Kia Soul that I bought new in mid 2014, so 4.5 years ago. it just had its 90,000 mile service, which is a big one, cost $399. I've had the oil changed at the suggested intervals and regular service done at the dealer. They give me a ride or a loaner car for the big services, the oil changes are less than an hour, so I take my tablet or book and wait. With my mileage, which is another 50% more than your would be covered for, I have not spent $1500.

The only way that would be worthwhile is if it covered your next set of tires also.

[Teacher Terry]

Goodness, that’s even a bigger rip off.

[catherine]

I think that maybe they're trying to retain you as a customer for maintenance rather than going to JiffyLube or anything like that. Honestly, I still wouldn't want to be locked in. JiffyLube is $19.99. Of course there are regular maintenance things that go beyond an oil change, but I don't know.

I've had my Prius for 11 years. I just had a tune-up/maintenance check (odometer was about 122,000). I had the works: oil change, air filters, tires rotated, etc. PLUS I got two new tires and the bill was $408.

[Tammy]

Our son is a maintenance manager by trade and is a genius at auto, electrical, plumbing, AC, heating, etc etc. he fixes anything. So he maintains our car for a small price for labor. Of course this is the best deal for us - but also his opinion is that for those who don’t fix their own stuff, self insuring is almost always cheaper than buying a maintenance contract.

[SteveinMN]

I wouldn't do it.

Every now and then you hear about someone who was spared a four-figure repair because (s)he had a maintenance contract on the car. But those "winners" are rare. You're essentially placing a bet that your car will need repairs costing at least what you paid for the contract in the period the contract covers (and that's assuming it's something the manufacturer's warranty doesn't already cover).

Fine print abounds in these contracts. If you (or anyone else) is still interested, check if the contract extends the manufacturer's warranty or runs concurrently (so you're really getting only a year or two of coverage for your money). Most contracts will require you to have repair/maintenance work done only at a dealer ($$$$) or require a periodic inspection (hassle) whether or not anything is wrong. Check if work is covered anywhere other than at the dealer which sold you the contract (what if something breaks down while you're driving in another state?). Find out what is considered a "wear item" (tires, belts, hoses, even things like automatic transmission fluid) and, therefore, unlikely to be covered and your expense.

While I'm posting, I'll throw in that I'm not a fan of national quick-lube places. My experience is that their business model encourages cut corners and mistakes. If you do get a conscientious tech, they likely won't be there long because of the low pay and constant push to get jobs out the door or the need to upsell ("We did our free safety check and found you need a fluid change and new wiper blades." Ka-ching). IMHO it's a false economy.