I sold new farm equipment and the extended warranties are a real good profit center for the dealership and OEM. About 30% stays right at the dealership when you buy the extended warranty. That is why they push them so hard. Many times they make much more on the extended warranty and finance fees than they do on the actual sale.
So the only time I ever consider an extended warranty is if it is a costly vehicle to repair. An example would be a diesel pickup truck. Even then I look real hard at the cost your paying up front for the warranty that you may not ever use. Also read the fine print on the extended warranty. Most people assume that the extended warranty is just like the OEM warranty you get with the new vehicle. Most extended warranties are NOT even close to what the OEM warranty was.
An example: A fellow I know has a Dodge 1/2 ton pickup. He bought the truck with low miles, used. He bought the extended warranty that Chrysler offered. A year goes by and his truck starts to run rough and knock. He had it towed to the dealership and they find that the motor bent two push rods. I guess that is not uncommon on his model of engine. The warranty would only pay for the two that bent. Even thought these where on two different cylinders the warranty would not even pay for the mates of the bents ones to be replaced. Do not even think about the ones on the other head. To have them all replaced parts and labor was over $750. He paid $4000 for the top end extended warranty too. His extended warranty was a sucker bet on his truck.
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Today's Featured Article - Women and Tractors - Tractor Engine Repair - by Teri Burkholder. One of the great things about working on a tractor engine with your other half is that you know what he is thinking of at all times and can anticipate his every move and his next thought of what he will do. With Ben, anyway, I can tell! He'll be busy working and I’m handing him tools and he says, "give me that..." and I’ve already got it in his hand or "hand me that....."and I’ve got the portable light right where he needed it placed to see. "Run in the house and get me a...."as I open th
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