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 - Grain Threshing in the Early 40's - by Jerry D. Coleman. How many of you can sit there and say that you have plowed with a mule? Well I would say not many, but maybe a few. This story is about the day my Grandfather Brown (true name) decided along with my parents to purchase a new Ford tractor. It wasn't really new except to us. The year was about 1967 and my father found a good used Ford 601 tractor to use on the farm instead of "Bob", our old mule. Now my grandfather had had this mule since the mid 40's and he was getting some age on him. S
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