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anyone look into aftermarket service contracts?
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novalight
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A-spec Touring Edition
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Joined: 19 Feb 2005
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Location: Honolulu, HI, USA

PostPosted: Mon Mar 02, 2009 4:06 pm    Post subject: anyone look into aftermarket service contracts? Reply with quote

anyone look into aftermarket service contracts? I've seen those commercials
If i had a second car I don't mind the DIY but because I only have the van I wanted to know if they are worth it? I beyond 55k with no current warranty

2004 A-spec Touring Edition (look it up)
instagram: Tangofury
Added Suspension: Carbing Tower Bar, TEIN Stechs, Airlift Airbags, Energy Suspension Bushings
Added Exhaust: Cherry BOMB Glasspack, 22" X 3" TIP
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00incmh
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Joined: 14 Apr 2008
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PostPosted: Sun May 24, 2009 7:04 pm    Post subject: Re: anyone look into aftermarket service contracts? Reply with quote

I currently don't have one, but I've heard first hand from people who do. Some swear by them, and others just swear when you mention them. Personally, I think instead of spending the $100 a month on the contracts, put that money aside and if something breaks you have your own money to fix the problem. If nothing breaks, just keep bank rolling the money until you use it as a nice down payment on your next ride.
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Dan
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PostPosted: Sun May 24, 2009 10:21 pm    Post subject: Re: anyone look into aftermarket service contracts? Reply with quote

In the long run, the insurance company (that sells the aftermarket service contract) will collect more money from its customers than it pays out in claims and expenses. It has to be this way or the company would go out of business.

What this means is that a lot of people are going to pay in more money than they get back to handle repairs. Some people will come out ahead, but most won't. The insurance company WILL come out ahead.

A service contract may buy you peace of mind even if you don't come out ahead regarding dollars spend on the contract compared to dollars saved on repairs. That can be worth something to some folks.

A question to ask yourself is, if (fill in the blank with expensive car part) fails, how will I pay for the repair/replacement. If you have a reliable way to come up with the money (putting it on a 30% credit card probably doesn't count as a good way, here) footing the bill yourself may be the better way to go. If a big repair bill would shoot a huge hole in your budget, perhaps the service contract is the better way to go.

In the long run, the VAST majority of people will pay more for service contracts than they receive in benefits from that contract, AND those people will probably pay less for repairs than they would for the service contract. Sort of two different ways of saying the same thing. Note that when I say "long run" I am talking at least a couple of decades.

Dan
2001 Rainforest Green LX (164,795 miles)--Minnie (The vacationator)
2006 Honda Civic EX with NAVI and 5sp MT (102,338 miles, new block at 89K) (Dan's daily driver)--Blue Car
Sold (scrapped) on 10/30/04 at 165,599.4 miles....1987 Honda Accord DX (165K miles)--Tan Car
Sold (scrapped) on 9/26/09 at 148406.4 miles and 24 years old....1985 Toyota Camry LE --Brown Car (Dan's former daily driver)
And more human powered bikes than I can count.....
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