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Evan and Robin's Journey:
Extended Car Warranty, Resource or Rip-off?
In the last week we had to take Robin’s car, a 2019 VW Atlas, in for a couple of recall notices we had received. Nothing completely out of the ordinary and wouldn’t have any out-of-pocket costs – so it wasn’t something that we had put much thought or effort into – outside of scheduling the appointment. Unfortunately, what we anticipated being a ~1 hour visit ended up being 5+ hours and spurred a larger discussion.
When we bought our vehicle the 2020 model year was already out, and one of the main drivers of why we chose our car was the warranty. 2019 was the final year the VW offered a 6-year 72,000-mile standard warranty, in 2020 that was reduced to 4 years and 50,000 miles. Between the additional coverage, and the slightly lower price point it seemed like a no-brainer to us. During the closing, as-is typical, we were bombarded with all the dealer add-ons available – one of which was an extended warranty option. We declined all, specifically the extended warranty as we weren’t sure what we would end up doing with this car – keep it for the long haul or end up trading it in. Fast forward a couple years, Robin really likes her car, and it looks like we will likely be keeping this one for quite a while.
While getting the recall work done, they let us know that they had found a coolant leak at the water pump, and an oil leak at the valve cover. Both are covered under the warranty (which we are about halfway through), so no out of pocket costs – but got us thinking about the longevity of the car and costs associated. Since we are planning on keeping the car well past 6 years and 72,000 miles, what options would be available to us – and could we even still get a warranty this far past purchase?
We started digging in and found that we would still be eligible to purchase an extended warranty from VW anytime prior to our standard warranty expiring. The options available through VW are 10 years and 150,000 miles, with 3 different tiers of coverage and deductibles. We ended up getting a favorable initial quote from the dealership we purchased the car at – essentially needing to use the warranty the same amount in the extended period (~2 items in 4 years 78,000 miles) as we have thus far (2 items in 3 years and 35,000 miles) for the warranty to pay for itself.
We’ve still got a few things to investigate from the VW offering, and then do plan to look into offerings from 3rd parties – at least for a price comparison. But I think we are leaning towards moving forward with an extended warranty given our plan to keep the car around for a while, as it seems like we would realize a return on the investment.