Warranty Cost Reality Check - 986 Forum - The Community for Porsche Boxster & Cayman Owners

mikefocke · 10-19-2008, 10:26 AM

pbanders · 10-19-2008, 01:19 PM

Quote:

Originally Posted by mikefocke

Good stuff in there, everyone should read it. However, it wouldn't dissuade me from an extended warranty on my Boxster. I've owned various German sports cars for over 35 years, new and used. I've also owned many Japanese sedans and vans, and a few US vechicles. Based on my experience with Porsches and BMW's, and from my record of repairs, the extended warranty I purchased will very likely be a breakeven proposition, and more often than I'd like, may save me about 4 to 5X the cost of the warranty if I'm unlucky and I have an engine or transmission failure due to design or manufacturing flaws. Fact is that Porsche and BMW parts are very expensive, labor rates are outrageous, and both have chronic problems (e.g. MAF, window regulators, switchgear, etc.) and major acute problems due to design flaws they won't fix (IMS, RMS, cylinder liners, block porosity; BMW's - similar stuff, E46 M3 spun bearings, E36 M3 rear suspension mount failures, cooling system failures, etc.).

I've never purchased an extended warranty on any Toyota or Honda I've owned, and my records show it wasn't needed. They simply don't have the kind of chronic and acute problems that German cars have, and when problems do crop up, they find them before I do and issue warranty extensions and repairs without charge (3 so far on our Sienna). The 7/70K extended warranty I bought on our Dodge Caravan was well worth it, and the only way I'd buy another US vehicle was if the original or extended warranty covered the full duration of the time I was planning on owning the vehicle.

BTW, I've had my extended warranty for a year, and it's already paid $450 in claims (window regulator, crankshaft plug leak). I just squeezed a RMS in before the factory warranty expired (I have Tip, so it was just under $2K at the dealer). Even if I end up with money on the table, the other thing that warranties buy you is peace of mind, which is worth at least a few hundred bucks to me.

kls · 10-19-2008, 08:58 PM

"Link to a thought paper"

Very well explained. Exactly why I decided against an extended warranty. I had not thought of the analogy with gambling, but that's right on. Instead of peace of mind (as a manufacturer's warranty would be) I have a fear that with every repair I would have to worry if it was going to be covered, as some previous threads have reported.

Wingnut2u · 10-20-2008, 06:29 AM

Not having an extended warranty on a Porsche is a huge gamble and I will gladly task the risk of losing a couple $100 dollars over the potential loss of $5,000-$10,000 if I did not have a warranty. As I mentioned previously, in the first 6 months of ownership I have already replaced the CV boots and I had the dreaded RMS failure. Both were covered in full and my only cost $10. That is almost $2,500 in repairs in the first 6 months. I only have $1,300 left in repairs to break even and 4 1/2 years to accomplish it. It's a Porsche, it WILL have issues, things break. Unless you have just a ton of extra cash, not having an extended warranty is not a smart gamble in my opinion. You just have to make sure your policy is with a good warranty company and to me, Warranty Direct is not a good warranty company.

Piece of mind that I won't have to shell out big bucks for catastrophic failure is worth the cost of the extended warranty to me. Remember you don't buy insurance to make money but to protect yourself from significant financial loss..just my $.02

mikefocke · 10-20-2008, 06:57 AM

everyone's risk tolerance is different. And perhaps the Porsche is the exception that would argue for a warranty. But if statistically that were true, wouldn't that be priced into the cost of the warranty as the warranty company has other costs they have to recover besides actual repair costs, have statistics on what it is costing them for Porsche repairs, and isn't in business to lose money. So I have to believe that they are pricing to make money on their Boxster warranties.

While I recognize that you may have made money on your warranty, I declined mine and am $2400 ahead at what would be the end of the warranty period. And neither your or my experience is really statistically significant (to me) in determining the wisdom of a warranty... way too small a sample.

The argument for a warranty that is compelling is the one that says "to me, it is the only way I'd be able to own a P-car and sleep at night" and that is an emotional response that is specific to the individual. And as valid a reason as any...because everyone has a different risk tolerance.

Wingnut2u · 10-20-2008, 07:14 AM

Quote:

Originally Posted by mikefocke

everyone's risk tolerance is different. And perhaps the Porsche is the exception that would argue for a warranty. But if statistically that were true, wouldn't that be priced into the cost of the warranty as the warranty company has other costs they have to recover besides actual repair costs, have statistics on what it is costing them for Porsche repairs, and isn't in business to lose money. So I have to believe that they are pricing to make money on their Boxster warranties.

While I recognize that you may have made money on your warranty, I declined mine and am $2400 ahead at what would be the end of the warranty period. And neither your or my experience is really statistically significant (to me) in determining the wisdom of a warranty... way too small a sample.

The argument for a warranty that is compelling is the one that says "to me, it is the only way I'd be able to own a P-car and sleep at night" and that is an emotional response that is specific to the individual. And as valid a reason as any...because everyone has a different risk tolerance.

I don't dissagree with you, I should probably add that my opinion is based on ownership of an older model, as mine is a 2001. The older the car the higher the likelihood that something will break down, thus the higher premium that is charged for the older models. Yes the insurance companies have done their homework and studied the statistical analysis on a much broader sample base than just a couple of people. Since RMS and engine failure is more common in older Pcars like mine, I thought the added security of warranty was a good option.

I guess I have been fortunate, if you want to call it that, that I purchased the warranty. Again a warranty is insurance to protect yourself from substantial financial loss. I didn't buy a warranty to make money but to protect my money. Of my cars that I own, the Porsche and the Mercedes have extended warranties, this last month alone those warranties have saved me over $6,500 in repair bills. I do not have warranties on the Hummer, Suburban, 2 Honda Accords or the Jeep. Why, because they do not break down as much and the cost of repair is much lower. It's all about assessing risk

Chills · 10-20-2008, 08:06 AM

cayenne asked so here's the info:

The warranty company is called Easy Care. It cost just over $2900 and it covers my BoxsterS for 4 years or 60k miles from the date and odometer reading at purchase. There is a $200 deductable but if I get the car worked on at Luxury Motors then they pay the deductable. I've had the RMS fixed and a front strut rattle also fixed. Total cost to me: $32 for a plastic piece that needed replacing.

Total cost of repairs to my car: $3900+, so the warranty is definitely worth it IMHO.

EDIT: repair cost is an estimate, I don't remember the numbers off the top of my head but I do remember they exceeded what I paid for the warranty.