Extended Motor Vehicle Warranties

Worthless bits of paper or genuine peace of mind?

by Stuart Livesey

Extended warranties are big money spinners these days. You can get the peace of mind of an extended warranty for just about everything from an office chair to the car you just purchased but peace of mind comes at a cost.

Recently an office supplier offered me an extended warranty on a $150.00 office chair for around $13.00 while a friend bought an extended warranty on his second hard car for around $900.00. But are you really buying peace of mind or are you just throwing money away.

I turned the office chair warranty down; it only kicked in after 12 months and, because of what I do, no office chair lasts longer than 12 months. But my friend thought there was value in his extended warranty and he took it.

Sadly now he’s finding out that it was really just a total waste of money.

The first time he tried to claim on his warranty was when a front shock absorber needed replacing. Now we all know that shock absorbers should be replaced in pairs so you would think that the warranty would cover the replacement of both; and you would be mistaken.

Not only did the warranty not cover the replacement of both shock absorbers but the company made it plain to my friend that he would have no claim on the warranty when the second shock absorber did finally fail because he hadn’t replaced it at the same time as the first one and so added strain would have been placed on it. That added strain, according to the warranty company, would be the fault of my friend – because he only replaced one shock absorber – and that was something not covered by the warranty.

But wait, there’s more. My friend lives up the coast in Queensland while the warranty company has their offices in Sydney. Things cost more up here because there are shipping costs and the warranty company wasn’t having any of that.

They pay their claims based on what they could buy the parts for in Sydney; not what they cost where their client happens to reside. Of course they’re also going to shop around for the best price while anyone who lives outside of a capital city is going to be limited in where they can buy genuine parts.

That same scenario has been repeated for my friend on two more occasions and now he doesn’t even bother lodging a claim when something goes wrong with his car.

So think carefully and be sure to read the fine print before accepting the next extended warranty offer made to you by a smiling salesman. The only people likely to benefit from that warranty is the company who provides the warranty and the salesman who convinces you that you need it.

Extended Motor Vehicle Warranties
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