Obviously auto sales have been hammered the last couple of years by this recession. In the last few years and especially more recently, I have noticed a lot of dealers in my area now offering "warranty forever" when you buy a vehicle from them as a means to earn your car buying business. In a nutshell your engine/powertrain have a lifetime warranty as long as you own the car. Looks good on the surface but obviously stuffed with exceptions. Of course you have to do the scheduled maintenance strictly by the owners manual and the dealership you buy from has to do all the work. So you will obviously be paying for way overpriced dealership service. So if I want to change my own spark plugs...warranty voided.

I bring this up because I was getting an oil change yesterday and wandering around the showroom, there was a man and his wife apparently doing some negotiating for a vehicle and I could hear the salesman trying to push this waranty forever thing. (I'm not sure how it works but it seems to me like there may be something like a pre-paid service contract that you pay for when you buy the car.) Anyway, eventually the man got pissed and kept saying that he does his own maintenance.

Just wondering what people think of this tactic? I know a lot of people on here have learned to do a lot of their own maintenance thanks to the great DIYs folks have posted on here...mainly to avoid outrageous dealership costs for these services. Now most of us are probably in the minority of all car buyers that do a lot of the maintenance themselves. Most probably don't have the know-how or just don't want to do it.

 

For your typical "cars are an appliance" US owner, I imagine that it actually is a decent deal for a sense of security. It obviously isn't the cheapest way to do it, or the dealer wouldn't be pushing it. I would bet that the dealer makes far more off of maintenance charges on any given car than they pay for warranty repairs. Between moving, crashes, selling, trading in, I would bet less than 5% of the cars they sell with it get to the point that the extra warranty would even kick in, and the people likely to keep an original car that long, staying in 1 location, always able to go to the same dealer, generally aren't the people to run into warranty related issue.

Most insurance or warranty models work on average cost vs average fee calculations. I wouldn't be surprised if the "warranty forever" for any given car more than pays for itself (from the dealer's perspective) without anything from other cars.

The sense of security also helps the dealer inflate the purchase price of the car itself as well.

I wouldn't ever take it.

 

I wouldn't ever take it either. I almost feel more secure about my car knowing that I can do most of the stuff myself and that I am saving a crap load of money in the process. Don't get me wrong..I don't mind paying for an oil change, but when you get to stuff like 30k, 60k, and 90k maintenance which involve coolant, tranny fluid, plugs, etc...I just can't justify paying 7-800 for a dealership to do it. I guess if you're a car guy like a lot of people on here are, your perspective is very different than the average joe who think a car is nothing but a very expensive appliance like you said. If you can do most of the maintenance yourself, the money you would save would probably pay for a new tranny if you ever needed one anyway since most cars already come with 60k powertrain warranties from the factory. I guess in the long run it would even out but If you play the percentages I still think you have a much better chance coming out ahead if you can do a lot if it yourself.

 

Time is money and that needs to be factored in as well. Working on cars is fun/cool when you want to do it vs. having to do because something broke.

 

I was a service writer at a dealer that offered an engine for life guarantee. The "warranty" did not cost the customer anything. What it did was offer free oil changes, tire rotations, and car washes for the life of the car (non-transferable). That was the honest straightforward part to the deal. The engine for life guarantee required that the customer perform all engine service that was required by the dealer's service guide (not the manufacturer's) at the dealership.

The idea behind these offers it to draw a custom to the dealer's service department. It is know in the industry that it is the sales department will obtain a customer, but it is the service department that will keep the customer. By offering cheap services for free and/or having a lifetime engine guarantee this will attract many customers into a dealer's service department. Sure it may cost a little money to offer the free services, but in the long run the dealership make out big time. Most customers don't keep a car long enough to see a major engine failure. If they do, then the car has already be serviced numerous times by the dealer, so putting in an engine for free is not a total loss for them.