I have purchased my fair share of new and used vehicles over the course of my 20 years on the road, and I have been asked by a few people about warranties. So, I figured on this damp Oregon morning, I’d make some espresso and share some thoughts.
1. Consider Your Plans.
If you are buying a commuter car, and you plan on keeping it stock (or mostly stock), a warranty can be a good deal. This obviously protects you from unplanned breakage on the vehicle, but also as a daily driver, it can save you time and headaches if the dealer can provide a loaner vehicle. It also keeps you from relying on possible other vehicles you own (and perhaps more expensive, like a Jeep) as a daily driver until repairs can be made.
However, if you plan on buying a Jeep and quickly modifying it into a full-time rock crawler, an extended warranty can be a real headache.
I purchased my first Jeep, a 1998 TJ Wrangler in California and declined to purchase the extended warranty. Over the next few years I would see an engine replacement, radiator swap, transmission replacement, and exhaust system replacement (twice!) all out of my own pocket. I never really wheeled it, and it was mostly stock. I wish I purchased the warranty.
On the other end of the spectrum, when I purchased my last Jeep, a 2013 JK Wrangler, I declined all extended warranties (at the protest of the sales guy, of course).
But you would think after the TJ, I would have learned my lesson, right?
Also, choose your dealership carefully. I know this is hard when you pull into a random dealership to just buy a Jeep, but this can save you time and hassles. Northwest Jeep Chrysler Dodge is my dealership and they have been awesome with warranty items covered by my standard warranty. I have heard about other dealers in the area with less than stellar reputations. A lot of repairs are left to the dealership’s discretion.
2. Modifications and Warranties do not mix.
Car companies are in the business to sell vehicles and make a profit. So it is in their best interest to find any way to decline your warranty claim (while also pushing you hard to purchase one).
As you customize your Jeep you will soon encounter certain looks at the dealership as they feverishly make notes in the system about the scratches on your skid plates, the size of your tires, and the suspension you added. Why? Because if you come in for a bent track bar, they can simply deny the claim and blame it on the spacer lift you installed.
When I purchased the 2013, I knew from the get go it would be heavily modified. So to save the headache, I rolled the dice and declined all extended warranties.
3. Warranties are not Cheap.
You are in the sales office, still on the contact high from that new Jeep smell. You cannot wait to hop in it, and drive home, and start placing orders on Northridge. You sign document after document, just to make the process move along. Finally, as carpal tunnel starts to set in, the finance guy pushes a laminated card in front of you, touting their extended (maybe even lifetime) warranty options.
Of course, the price of these warranties are spelled out as the increase to your monthly payment. So that awesome lifetime warranty would only increase my payment by $30!? It’s a DEAL! They also like to scare you by showing the prices of “common” repairs such as engine replacement, transmission repairs, etc (right as you are hoping to buy a quality vehicle from them).
But remember you will pay interest on that $30, as the full cost of the warranty is added on your loan. Second, over the 60 months some people are financing, that can add up almost $2,000 in additional cost before the interest. That could negate your entire down payment.
4. Weigh Your Options.
The first thing you need to answer for yourself is how you plan on using the vehicle. If it will remain stock, and you plan on keeping it for a very long time, an extended warranty can make sense.
However, if you plan on lifting it, swapping drive shafts, adding engine tuners and CAIs, bigger tires and electronics, you should stick with the factory 3/36 and call it good.
You will also feel a sense of freedom, knowing that an investment in a lifetime warranty is not guiding (read: restricting) your build plans. You can do whatever you want to your vehicle.
Keep these points fresh in your mind as you walk into the dealership and save yourself some headaches and money in the finance office.