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Old 12-10-2005, 09:03 AM   #7
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Join Date: Jun 2004
Location: Des Moines, IA
Posts: 8,083
"So many times I have heard the advice to take the money you'd spend on a warranty, and put it in an interest bearing account to be used towards future maintenance...and you'll come out ahead.

I donít know if this holds true for an expensive-to-maintain car like a Porsche. But, that's what I am planning to do."

This scenario works out fine if you are looking at say a sample size of 1000. That is the way insurance works, it is the SPREADING of the risk over a larger payer base.

However, on an individual basis, this "put the money in the bank approach" is not valid from an actuarial basis. If you are the ONE, you have just lost your shirt.

To wit,

say 1 out of 1000 folks will need a new engine and you are the one who needs it, the $2000 that you put in the bank will not cut it.

Let the good times (and dice) roll.

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