Originally Posted by jwblue
Reading the brochure, they sure make it compelling to buy the warranty. From what I read, it seems like a bumper to bumper warranty.
Lets say the owner will drive the vehicle it can no longer run and purchases the extended 7 year plan.
If my niece pays $1,000 for the warranty, the question is will she have $1,000 worth of repairs from year 3 (when the included warranty ends) to year 10.
My guess is, she might have $1K of repairs.
I have written a lot on this subject in other postings on this forum. (If you'd like to check out my other postings, just search for them under my name). In an effort to be helpful, and in case it still matters to you, I will offer these quick comments/facts:
1- You are buying insurance
in the form of a service contract
. There are limitations on the contract. Read it carefully. It is not
a bumper-to-bumper warranty. Not even close. Read the contract.
2- While you can
buy versions of the Nissan contract after the sale (and for years thereafter), the best coverage is offered if you buy it from the dealer at the time of sale
. That clause in the contract sealed the deal for me, so to speak, because most of the expensive electronics are not
covered if you buy the contract after the sale. That's their hook to help the dealers make a bit more profit and it's a good one.
3- There is a dealer in California that will sell these contracts to anyone almost at cost (that is, if you are not buying/did not buy it at the time of sale). A simple web search will reveal the dealer (Santa Rosa). This is a totally legal, legitimate way to buy the contract from Nissan. It is a contract with Nissan, not the dealer. The dealer makes a bit of money by selling it to you, that's all.
4- Sorry, but no one can tell you whether or not you will "get your money back" on any type of insurance contract, including an automobile contract. (Well, unless someone tells you he has a time machine in his basement!) Buying insurance
is a personal decision
that requires careful analysis
of one's situation, finances, and expectations. There are many folks on this forum who think service contracts are a waste of money and that anyone who buys one for a modern Nissan is simply "wasting" their money. Of course, the same people may whine and fuss in the same breath about whether their car will be "trouble free" for many years and 1000s of miles. Those are their opinions
about their situations
and their ideas
of what is reasonable
to them; you may well have different ideas. (Read my other posts for a long discussion of this point if you care to read it.)
5- The "expensive" stuff in a modern automobile involves much more than the powertrain. If you have any of the electronic/power options (i.e., navigation/Bose radio/power steering wheel adjustment/power lift gate, etc.) you might
have a shocking bill if something goes wrong after the 3/36 basic warranty. That's when a service contract can offer you the most reasonable "insurance" against future costs. Yes, you can save the money you might spend on a contract against the possibility of future need. That's not a bad idea. But, most people don't/won't do so. The idea of having a convenient monthly $10 added to their car payment may be a good one. You have to decide. No one here can tell you what's best for you in terms of handling your
6- If you do decide to buy a service contract, only buy Nissan's
. Any third-party contract is a waste of money
, clear and simple. Nissan backs their contracts (while a third-party may well go out of business). The Nissan prices are reasonable (in my opinion) for what is being offered. But remember that the dealers are free to sell any contract they want, even their own contracts and for whatever price they can get. Don't buy anything
but the genuine Nissan Security + Plus contract.
7- Nissan does offer a free 60-day look at the contract (i.e., you can sign a paper and give it back to the dealer to have the contract cancelled and the price refunded). After the 60 days, there is a prorating of the refund value or you can simply leave the contract on the car (it applies to the car, not to you) which may be a selling point for whomever you are selling the car to.
8- You probably want to know what price to pay for a contract and/or how long of a contract you should buy. Well, obviously you will need to carefully estimate your expected ownership period and your yearly mileage. As for the price to pay, I think you should make it clear to the dealer that you will only
consider buying the contract at a reasonable
markup ($100 - $200 over their cost). The dealer price for a new '12 Nissan for a 7/70 contract sold at new-car delivery time is about $1200. The top contracts (in time period and mileage) cost the dealer about $1800.
Finally, here are some of my pure opinions
. If you really expect to own a car as long as the maximum contract time period/mileage, I personally think that buying this insurance should turn out to be a wise investment not only in peace of mind, but also financially. Remember, buying a contract with today's dollars establishes its present cost but not
its future value. Here's what I mean: if we consider the ratio of inflation vs. average investment returns over the past five years, buying a service contract now may well be a smart move. Why? Because if you need an expensive repair, you will have spent fewer of today's dollars
to have complete coverage for tomorrow's inflated expenses
. I hope this last comment makes sense! If not, let me know.
Oh, and if is sounds like I sell insurance, I don't. I do, however, have a long and close relationship to the businesses of selling and leasing automobiles.
I hope this info is helpful to you. Good luck.