[johnre]

I have always found it interesting to learn of sale person who refuses to lower their gold plus plan price, knowing they have a binary choice of making some profit or none at all.

They are not just considering this particular sale; they are looking at future sales as well, assuming that word will get out if they begin to offer discounts. And judging by the many posts to this forum about warranty pricing, word does get out indeed.

That can be either detrimental or beneficial in the bigger picture, of course. But apparently the strategy you personally witnessed is what seems optimum for that particular sales person.

 

[packout2]

They are not just considering this particular sale; they are looking at future sales as well, assuming that word will get out if they begin to offer discounts. And judging by the many posts to this forum about warranty pricing, word does get out indeed.

That can be either detrimental or beneficial in the bigger picture, of course. But apparently the strategy you personally witnessed is what seems optimum for that particular sales person.

maybe for that salesperson, but not for the dealership. To some degree I think it is about how the dealership incentivizes both the departments and individuals.

 

[waynetc]

Just for fun (but mostly to save me $ when our OB arrives) I took all the current price info in this thread (excluded the prices posted from 2 years ago). Average price paid is $2034.29 for the 10 year. I'm hoping to do it for $1800 or less. Will report back once I go through all the gyrations involved to get the best price on the 10/100.

 

[Eddie_lv]

Just for fun (but mostly to save me $ when our OB arrives) I took all the current price info in this thread (excluded the prices posted from 2 years ago). Average price paid is $2034.29 for the 10 year. I'm hoping to do it for $1800 or less. Will report back once I go through all the gyrations involved to get the best price on the 10/100.

Looking forward to your outcome. I’ll be doing something similar.

 

[packout2]

Just for fun (but mostly to save me $ when our OB arrives) I took all the current price info in this thread (excluded the prices posted from 2 years ago). Average price paid is $2034.29 for the 10 year. I'm hoping to do it for $1800 or less. Will report back once I go through all the gyrations involved to get the best price on the 10/100.

there are hundreds of dollars difference for that same term with differing deductibles. Be certain to compare apples with apples.

 

[waynetc]

there are hundreds of dollars difference for that same term with differing deductibles. Be certain to compare apples with apples.

Agree 100%. I'll wind up either with zero ded or $100.00 but will document when the deal closes

 

[AnotherMike]

My 2016 Kia Sorento was my first turbo and just past the 100K warranty (117K) was looking at $9K CDN to replace engine, did a trade instead. I will be getting extended Subaru warranty.

Anyone who gambles in casinos with the expectation of winning may as well buy extended warranties, because both institutions price their product in favor of the house. Casinos are for those for whom the reward is the adrenaline, and extended warranties are for people too poor to buy a new tranny at 80k (or a new car in the first place). Everyone else should avoid both gambles.

I hate to sound arrogant, but it's that simple.

 

[stillearning]

Anyone who gambles in casinos with the expectation of winning may as well buy extended warranties, because both institutions price their product in favor of the house. Casinos are for those for whom the reward is the adrenaline, and extended warranties are for people too poor to buy a new tranny at 80k (or a new car in the first place). Everyone else should avoid both gambles.

I hate to sound arrogant, but it's that simple.

Not quite that simple in my opinion. For some people, it’s buying peace of mind. Plus financially speaking, one of the factors manufacturers use in pricing their warranty is what it potentially costs them for any future repairs on your car, which is much less what it could cost you out of pocket for that same repair. There’s a big difference in those dollar amounts. A new transmission costs them a lot less than it costs you. Oftentimes, both parties can win.

But I think for most people, they’re buying peace of mind for years (and miles) of worry free driving. Everybody’s different. It’s not one size fits all.

 

[oats]

Anyone who gambles in casinos with the expectation of winning may as well buy extended warranties, because both institutions price their product in favor of the house. Casinos are for those for whom the reward is the adrenaline, and extended warranties are for people too poor to buy a new tranny at 80k (or a new car in the first place). Everyone else should avoid both gambles.

I hate to sound arrogant, but it's that simple.

I disagree. I paid cash for my 2022 Outback and I would have no issue paying for a new transmission BUT I still purchased the extended warranty. I didn't get rich by gambling but rather by being smart with my money. I think this was a smart decision with my money.

I hate to sound arrogant but it's not that simple. Each person makes the choice that works for them.

 

[Squoosh42]

Anyone who gambles in casinos with the expectation of winning may as well buy extended warranties, because both institutions price their product in favor of the house. Casinos are for those for whom the reward is the adrenaline, and extended warranties are for people too poor to buy a new tranny at 80k (or a new car in the first place). Everyone else should avoid both gambles.

Opinions include a whole spectrum of subjectivity, and the most successful humans learn to navigate those grey spaces. It’s ok to feel as you do about your choices, but is there a need to judge those who who do not hold those?

Of course warranties are insurance products that pay off in the favor of the “house” and costs will always be adjusted by the issuer to ensure it. That’s basic risk analysis.

Many people can sure “afford” the car and are not “poor” and will choose a warranty. These are not stupid people. Sure, they can put put aside $20k just for repairs in a low interest account for the life of the car and “self-insure.” Is it arguably a bad financial decision to buy a warranty, perhaps. But some people would prefer to keep that cash reserve liquid, invest it, or just not worry about any of this at all and just have the peace of mind that the car will be taken care of fully should something happen.

It also doesn’t mean you are poor or cannot afford a car if you don’t have $20k in the bank to fully replace major vehicle systems unexpectedly, and instead would rather front load a warranty…

It’s a factory backed warranty that even includes tows, rentals, and trip interruption (save ya $100 a year on your car insurance add ons maybe even).

There are pros and cons. They don’t have to be absolutes packaged with judgement.

 

[Cerulean Obsidian]

Opinions include a whole spectrum of subjectivity, and the most successful humans learn to navigate those grey spaces. It’s ok to feel as you do about your choices, but is there a need to judge those who who do not hold those?

Of course warranties are insurance products that pay off in the favor of the “house” and costs will always be adjusted by the issuer to ensure it. That’s basic risk analysis.

Many people can sure “afford” the car and are not “poor” and will choose a warranty. These are not stupid people. Sure, they can put put aside $20k just for repairs in a low interest account for the life of the car and “self-insure.” Is it arguably a bad financial decision to buy a warranty, perhaps. But some people would prefer to keep that cash reserve liquid, invest it, or just not worry about any of this at all and just have the peace of mind that the car will be taken care of fully should something happen.

It also doesn’t mean you are poor or cannot afford a car if you don’t have $20k in the bank to fully replace major vehicle systems unexpectedly, and instead would rather front load a warranty…

It’s a factory backed warranty that even includes tows, rentals, and trip interruption (save ya $100 a year on your car insurance add ons maybe even).

There are pros and cons. They don’t have to be absolutes packaged with judgement.

Agreed. I could have bought the car in cash and I'm planning on getting the extended warranty. Will I lose money in the long run? I hope so. It will mean that the car works great and I never have any problems. But if something does crap out, then I won't have to worry about it. Could I pay for repairs out of pocket? Sure, but then that interferes with other plans and I can easily fit the warranty into my budget.

I also realize that I'm very fortunate in being able to do all of the above and wouldn't begrudge anyone purchasing a warranty for whatever reason.

 

[stillearning]

Agreed. I could have bought the car in cash and I'm planning on getting the extended warranty. Will I lose money in the long run? I hope so. It will mean that the car works great and I never have any problems. But if something does crap out, then I won't have to worry about it. Could I pay for repairs out of pocket? Sure, but then that interferes with other plans and I can easily fit the warranty into my budget.

I also realize that I'm very fortunate in being able to do all of the above and wouldn't begrudge anyone purchasing a warranty for whatever reason.

All of the above for me also. We paid cash for the car, and could afford repairs if we had to, but now it’s something I don’t have to think about for 10 years.

 

[johnre]

Plus financially speaking, one of the factors manufacturers use in pricing their warranty is what it potentially costs them for any future repairs on your car, which is much less what it could cost you out of pocket for that same repair. There’s a big difference in those dollar amounts. A new transmission costs them a lot less than it costs you. Oftentimes, both parties can win.

While this is true of parts that go into a warranty repair, it may not necesarily be true of labor.

A factory warranty is most likely going to specify dealer service be used for repairs, and will factor that cost into the extended warranty pricing accordingly. Individuals paying for their own repairs, on the other hand, have the freedom to choose whoever they wish to use, and generally those providing such services charge significantly less than the dealer for the labor part of it. And if the warranty goes out to a full ten years, experience on this forum has shown that once a few years have gone by, independents are much better experienced at efficiently carrying out proper repairs with the more vintage vehicles, and therefore inherently lower cost, simply because they see a situation more often in their shops - e.g. head gasket repairs.

 

[2022OBP]

I just reached 12k miles on my 2022 after 9 months. I have an appointment next week for the courtesy oil change. I will request a quote for the 10/100k/0 gold plus.

 

[packout2]

I just reached 12k miles on my 2022 after 9 months. I have an appointment next week for the courtesy oil change. I will request a quote for the 10/100k/0 gold plus.

you should be able to get that for under $2000

 

[binary visions]

Anyone who gambles in casinos with the expectation of winning may as well buy extended warranties, because both institutions price their product in favor of the house. Casinos are for those for whom the reward is the adrenaline, and extended warranties are for people too poor to buy a new tranny at 80k (or a new car in the first place). Everyone else should avoid both gambles.

I hate to sound arrogant, but it's that simple.

Do you own insurance of any variety?

Because that's exactly the same pricing that you're complaining about. Insurance is priced that the average person loses money on it. We should all be so lucky if we never have to collect on our homeowner's insurance. I am in the statistical minority that got burglarized, so I paid for 25 years worth of homeowners insurance in one claim. I would have happily spent my life "losing" on the bet of homeowner's insurance, but as it turns out, I am also very pleased that I didn't have to cough up $20k.

The margins on most of these things are individually small and only in aggregate are profitable. So I think it's probably not so egregious that someone buys $2000 worth of warranty that statistically will probably only pay out $1700, and that $300 hedge protects them against a big expense in the future.

It's not a casino. It's insurance. And yes, statistically over the long run, it is cheaper to self-insure, but that also introduces a bunch of risk. Risk avoidance is an okay reason to pay money.

 

[packout2]

Do you own insurance of any variety?

Because that's exactly the same pricing that you're complaining about. Insurance is priced that the average person loses money on it. We should all be so lucky if we never have to collect on our homeowner's insurance. I am in the statistical minority that got burglarized, so I paid for 25 years worth of homeowners insurance in one claim. I would have happily spent my life "losing" on the bet of homeowner's insurance, but as it turns out, I am also very pleased that I didn't have to cough up $20k.

The margins on most of these things are individually small and only in aggregate are profitable. So I think it's probably not so egregious that someone buys $2000 worth of warranty that statistically will probably only pay out $1700, and that $300 hedge protects them against a big expense in the future.

It's not a casino. It's insurance. And yes, statistically over the long run, it is cheaper to self-insure, but that also introduces a bunch of risk. Risk avoidance is an okay reason to pay money.

The statistical chances of something occurring versus the cost of that event is relevant. The chance of someone experiencing deadly force used against them is very small, but the cost of that experience can be a very high loss. Therefore, some choose to protect themselves at a cost through various strategic and financial measures.

 

[binary visions]

The statistical chances of something occurring versus the cost of that event is relevant. The chance of someone experiencing deadly force used against them is very small, but the cost of that experience can be a very high loss. Therefore, some choose to protect themselves at a cost through various strategic and financial measures.

Yup, that's what any insurance is about. When the event is either higher cost or more likely to occur, insurance is more costly.

In this case, the relative expense of the insurance is fairly low. Even if Subaru is counting on a massive 50% profit (i.e. Gold Plus 10/100 warranty is $2k, Subaru expects you to incur an average of $1k costs), which is highly unlikely because the third party warranty market would crush them with that kind of profit margin, you're still only paying ~$100/year for that protection.

Lots of people would prefer the peace of mind for that cost. Another thing to consider about warranty vs. self-insurance is that, with a warranty, you never hesitate to just bring it in or worry about who to bring it to. No living with the knocking sound or whatever. It always gets fixed, using OEM parts, from techs who are trained in your vehicle.