Warranty Direct - Just Purchased!

[z12358]

Originally Posted by dharrisonwu

Hey all,

Just purchased the Warranty Direct "Major Ticket Items" policy for my 2002 Boxster, 32 K Miles. With a $100 deductible and coverage for 4 years/75K miles, cost was $1,374. Sounds like a great deal to me - - especially after reading the forum and all the issues with the RMS leaks, intermediate shaft problems, etc, etc, I figured the price of the warranty would be made up in a single major repair.

Anyways, wanted to pass this information along in case any of you were considering extended warranties.

Regarding previous discussions we've had about Porsche reliability and repair costs...
Unless this company is negligent, fraudulent, inexperienced, incompetent, or just plain run by idiots, this is saying that the total expected (i.e. average) repair costs over 4 years for an average 4 year old Boxster must be less than $1,374 -- or else the company would have gone (or will go) bankrupt. Or am I missing something?

Z.

[seventythree]

Originally Posted by z12358

Regarding previous discussions we've had about Porsche reliability and repair costs...
Unless this company is negligent, fraudulent, inexperienced, incompetent, or just plain run by idiots, this is saying that the total expected (i.e. average) repair costs over 4 years for an average 4 year old Boxster must be less than $1,374 -- or else the company would have gone (or will go) bankrupt. Or am I missing something?

Z.

Actually, you are almost on the money with your assessment. More precisely, the net proceeds after paying commissions and administration expenses would be less than half of that figure. So, for ~$700 on average, to cover claims over a 4 year period, one can safely conclude that the plan in question is not designed to cover much!

[z12358]

Originally Posted by seventythree

Actually, you are almost on the money with your assessment. More precisely, the net proceeds after paying commissions and administration expenses would be less than half of that figure. So, for ~$700 on average, to cover claims over a 4 year period, one can safely conclude that the plan in question is not designed to cover much!

Thx. I'm not familiar with the premium break-down for a typical warranty/insurance company but if we assume (as you say) that $700 would go for commissions, expenses, profit, etc, then the more comprehensive $2500 plan says that the average 4yr repair costs should be around $1800 (2500-700) -- which is in the same ballpark.

These numbers look low but we all may be emotionally biased by reading posts of people who have had problems, and not considering the majority of the ones without problems. If this warranty sticks and if they have done their research, the market (as an aggregator of all data -- good and bad) is saying that projected average repair costs are lower than what most of us expect.

Z.

P.S. Haven't read the fine print but if it covers most porblems, the $2500 4yr warranty still looks like a good deal for Boxsters coming out of factory warranty.

[Bob O]

Of course warranties are priced to give the company a profit over the expected pay-outs. (If the company doesn't make a profit, they won't be there when you file a claim...there are LOTS of examples around of this very thing happening) They're dealing with averages and statistics. For all those Boxsters that have NO repairs during the coverage period, there are those that incur claims well above your cost of the warranty... hence the concept of "average". Do YOU have the average Boxster?

There appears to be three possibilites with purchasing a warranty. One; you incur repair costs less than the cost of the product. Company wins. Two; you incur repair costs exactly equal to your cost. Company wins (slightly), due to investment gains on your premiums (assuming you don't incur those costs in the first month or so of coverage) Three; you incur repair costs higher than your premium. You win. That looks to me like a 1 in 3 chance of you winning and a 2 in 3 chance of the company winning, from your perspective. (From the company's perspective its a totally different analysis.) So the company has 2 to 1 odds of winning. How much of a gambler are you?

I'm a CPA, and I did the math before purchasing Warranty Direct in November, 2005, just before my factory warranty expired, taking into account some of the more frequently reported potential repair costs. Could I invest the average expected repair costs somewhere, and maybe (big maybe) be money ahead. Sure. Is my car "average"? Who knows.

I don't remember the cost exactly, but it was somewhere around $2400 or so for complete coverage for four years up to 100,000 miles. You have to weigh the odds of your car suffering a catastrophic failure of something, (or, more likely, several smaller issues which add up to quite a large repair bill over time) and you being on the hook for it, versus the peace of mind the warranty gives you to cover those potential biggies.

So far, I haven't had to use the warranty (knock on wood). (Maybe I have a better than average Boxster! ) BUT... if something DOES happen, I'm covered, and, for me anyway, that's more important than going bare. It's just one less thing in my life to have to think about. But that's just me

Bob

[Perfectlap]

I got a $3600 quote for my 2000 S with 32K miles. 1/3 of that due up front and the rest paid in 10 installments. Kind of steep me thinks for a car that has been basically trouble free. But for $1,200 a year with a well known company it might be foolish to turn it down since i can transfer it to the new owner for $50. That might help in selling the car a great deal.

[BuffaloBoxster]

I had a claim through Warranty Direct for my O2 sensors and MAF. The company paid just like they said they would, and I had it fixed at the dealer. The dealer calls it in, WD OK's the repair, and they pay the bill, minus the deductable, with their corporate credit card right over the phone.

They may try to wimp out on paying the shop's full labor rate but this is nothing new with insurance companies and the shops will often accept what insurance pays. The same thing happened with my claim for the hood-keying incident, an the shop accepted the insurance company's rate for that repair as well.

I've got nothing but praise so far for WD, and having the warranty is peace of mind enough for me to drive the car as often as I like, on long trips, etc.

Money well spent as far as I'm concerned.

[Perfectlap]

was that your only claim? and what was the total bill for the sensors?

[seventythree]

Originally Posted by BuffaloBoxster

I had a claim through Warranty Direct for my O2 sensors and MAF. The company paid just like they said they would, and I had it fixed at the dealer. The dealer calls it in, WD OK's the repair, and they pay the bill, minus the deductable, with their corporate credit card right over the phone.

They may try to wimp out on paying the shop's full labor rate but this is nothing new with insurance companies and the shops will often accept what insurance pays. The same thing happened with my claim for the hood-keying incident, an the shop accepted the insurance company's rate for that repair as well.

I've got nothing but praise so far for WD, and having the warranty is peace of mind enough for me to drive the car as often as I like, on long trips, etc.

Money well spent as far as I'm concerned.

For clarification, I am not suggesting that Warranty Direct does not offer a good product. All I said was that their MajorCare MBI does not cover what most Boxster owners are concerned about. The key language in the actual policy is "All internally lubricated engine parts are covered if damaged by the Failure of an internally lubricated moving part." In essence, meaning that unless the engine problem was caused by failure of the oil pump, there is no coverage!

The more appropriate plan would be their SecureCare MBI, which has no such language in its policy. If you are OK with what that plan costs, buy it.