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Factory Warranty vs Extended Warranty

7.8K views 73 replies 15 participants last post by  Gary-16-Xc90  
#1 ·
Hi Everyone,
Good News First: I have used purchased a 2019 XC60 T5 Momentum (Premium, Multimedia, and Advanced Package + Leather and heated seats) with 24k miles on it. I have purchased it from an online retailer and the vehicle is supposed to be delivered next week. Fingers crossed and I am super excited. This will be my first Volvo.

The car has 18 months/26k miles of factory warranty left as I understand it. While purchasing the car, I also opted for a 5 year 60k miles extended warranty. This warranty covers most of the electrical and mechanical parts. I have attached the coverage plan and I have opted for the Plus coverage. This can be canceled anytime for a refund. It did cost me $2500.

Here is my question: Should I have purchased this extended warranty since my vehicle is protected by factory warranty? What is NOT covered by a factory warranty? Can I get the Volvo protection plan from my local dealer once the factory warranty is over? (I am buying this car online and not from a dealer)

I am trying to understand if I have double coverage and if I should cancel the extended warranty and repurchase it from another vendor when the factory warranty ends.
 

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#2 ·
Volvos "Platinum" covered is close to the new car warranty and both are exclusionary. That means instead of a big fancy list making it look like everything is covered, you get a small paragraph of what isn't covered, and the rest is. Though it's probably similar to the "Plus" coverage from Carvana, if your do dad breaks and it's not on the list, it doesn't get covered. While "do dad" is not on the exclusionary list, so it is. Just looking over the engine coverage there is a fair amount not covered though. And under electronics "Radio" is listed, but it doesn't say infotainment that I can see. If your glove box release were to fail, I don't see where that would be covered either. These little things are why I don't like the big list warranties. They seem impressive until something fails and then you're hoping it's on the list. For Carvana you would need to know what a "Preferred Repair Facility" is and I assume your local Volvo dealer would be one. And of course questions like will Carvana pay for new OEM parts or just any old parts, could be important for some items.

Does the 5 year 60 months start the day you sign the paperwork, or is that 5 years total 60k miles total?

You can buy a Volvo warranty from any dealer. We have sponsors here on the forum that have websites set up to get a quote. You can always get a quote from them and then get your local dealer to match it if you want to build a local relationship, or just buy it online.
 
#5 ·
Volvos "Platinum" covered is close to the new car warranty and both are exclusionary. That means instead of a big fancy list making it look like everything is covered, you get a small paragraph of what isn't covered, and the rest is. Though it's probably similar to the "Plus" coverage from Carvana, if your do dad breaks and it's not on the list, it doesn't get covered. While "do dad" is not on the exclusionary list, so it is. Just looking over the engine coverage there is a fair amount not covered though. And under electronics "Radio" is listed, but it doesn't say infotainment that I can see. If your glove box release were to fail, I don't see where that would be covered either. These little things are why I don't like the big list warranties. They seem impressive until something fails and then you're hoping it's on the list. For Carvana you would need to know what a "Preferred Repair Facility" is and I assume your local Volvo dealer would be one. And of course questions like will Carvana pay for new OEM parts or just any old parts, could be important for some items.

Does the 5 year 60 months start the day you sign the paperwork, or is that 5 years total 60k miles total?

You can buy a Volvo warranty from any dealer. We have sponsors here on the forum that have websites set up to get a quote. You can always get a quote from them and then get your local dealer to match it if you want to build a local relationship, or just buy it online.
I didnt even think about the radio vs infotainment system thing until you brought it up. This is interesting. And yes, the 5 year 60 month starts the day I take the delivery of the vehicle.
 
#3 · (Edited)
Suggestions
1. Determine what the first delivery / start date was. Your Volvo dealer or Indy Volvo service can determine/verify that start date. Volvo factory warranties start on that date.

2. Read your service contract carefully and do the math for yourself.

3. Have your vehicle inspected by a Volvo dealer service center or a Volvo Indy.

4. Contact Steingold Volvo or another Volvo dealer that you trust to check / verify other extended warranty options.

Your questions:

1. Should I have purchased this extended warranty since my vehicle is protected by factory warranty?
It depends what the real benefit of your extended warranty is. If it only adds a net of one-year of coverage after the remaining factory warranty expires, then probably no, especially at a cost of $2500 for one year and a net of 10K more miles. Read the service contract.
2. What is NOT covered by a factory warranty?
You should have a copy of the factory warranty in your vehicle papers. Read that. See Volvo Cars US Owners Manual 2019 XC60

3. Can I get the Volvo protection plan from my local dealer once the factory warranty is over? (I am buying this car online and not from a dealer).
Contact Steingold Volvo or your Volvo dealer for viable options. Your car is not eligible for CPO which would have been the best option. An immediate Volvo inspection upon delivery would be the cheapest and best investment in case a return and full refund is necessary. [Edit: From another post, it appears that your 7-day return through Carvana would have expired by now.]

Congrats on your new car and hope it all works out well for you.
 
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#4 ·
I have "ordered" the vehicle and it has not been delivered yet. I am hopeful that the vehicle will be delivered next week. Based on your replies, I will book a pre purchase inspection.
Carfax has a red flag (last owner only had it was a month and drove about 4000 miles).

My local Volvo dealer gave me a quote of $360 (I am in Massachusetts) just to do the inspection. I am planning to reach out to other dealerships in the area. Seems a little high to me, that's all.

Also, I went through the document and I think I will cancel the Carvana Care Plus as the Factory Warranty is good enough. Once the 18 months or 26k miles run out, I will reach out to Volvo for a protection plan. Based on my understanding and reading of the forum, I need to reach out to a dealership before my vehicle hits 49k miles. Is that true?
 
#6 ·
Yeah sounds right. I don't think you'll find a better quote than Steingold offers, so might as well just start there and if you want to buy local, have them match that figure. The Steingold figure doesn't leave much skin in the game, but it offers great Volvo protection. IMO a sales person should be pleased to add one more warranty to their numbers even if they aren't making anything/much on it.
 
#7 · (Edited)
Hi Everyone,
Good News First: I have used purchased a 2019 XC60 T5 Momentum (Premium, Multimedia, and Advanced Package + Leather and heated seats) with 24k miles on it. I have purchased it from an online retailer and the vehicle is supposed to be delivered next week. Fingers crossed and I am super excited. This will be my first Volvo.

The car has 18 months/26k miles of factory warranty left as I understand it. While purchasing the car, I also opted for a 5 year 60k miles extended warranty. This warranty covers most of the electrical and mechanical parts. I have attached the coverage plan and I have opted for the Plus coverage. This can be canceled anytime for a refund. It did cost me $2500.

Here is my question: Should I have purchased this extended warranty since my vehicle is protected by factory warranty? What is NOT covered by a factory warranty? Can I get the Volvo protection plan from my local dealer once the factory warranty is over? (I am buying this car online and not from a dealer)

I am trying to understand if I have double coverage and if I should cancel the extended warranty and repurchase it from another vendor when the factory warranty ends.
There should always be extreme caution when purchasing 3rd party warranties. Many try to insert so many exclusions, these policies can become worthless. So before buying, it's a very good idea to read all the fine print.

Volvo sells it's own extended warranties. Honestly, the value here is again limited in your instance. Had you purchased a CPO, then the 10 yr / unlimited mile is the best deal. It would start from in service date. So that would have given you 90 months / unlimited miles if your vehicle were eligible. Unfortunately, not being a CPO, this plan isn't applicable.

Furthermore, I really don't recommend the other plans too heavily. Which if my memory services me correctly, the best "non CPO warranty" is 10 year / 120k. Not a whole lot of mileage.

Quite honestly, I am not sure the value of any extended warranty in your case. Thus, if available, I would cancel the Carvana Plan. Unless you are a low mileage driver, I would simply take the money that were to be spent on a warranty, put it in the bank for a rainy day, and use it for any potential future repairs. Versus picking up another warranty (I.E. Volvo).

My 2 cents.
 
#8 ·
I have a Route 66 warranty which is also exclusionary. You can only purchase those if you finance through a credit union. My backup was a warranty from Steingold. It was a few hundred more than the RT66, and didn't offer quite as many miles. But this was also on a used car close to the limits of what most extended warranty will cover.
 
#9 ·
As someone who's done math into those extended warranties (7 years 70k miles or 10 years 100k miles), I can tell you anyone that signs up for them is getting robbed.

Here's my recommendation for anyone that is frequently buys extended warranties because the fear of one time shocker payments is very great and you want to be risk averse.

1) Create a simple brokerage account that can trade some index ETFs
2) Any time you feel enticed to buy insurance (whether it be $10 a month on your cell phone or some $2,000 bull crap extended warranty); just deposit the value you would have spent on the warranty into this investment account instead
3) Use the brokerage to buy an ETF of your choice
4) If you need a repair, sell some of the ETF (including excess to deal with the taxes on the gains) and use the proceeds to do the repair.

About 98% of people will come out ahead with this method. If you ever sell the car that you were willing to protect with the insurance... subtract the actual amount of your repairs (repairs that may have otherwise been insured) from the original insurance value deposit. Cash that out and buy yourself something nice.

Also keep in mind actually getting these insurance things to pay out is tough. They only cover certain types of failures (like a leaking oil pan won't be covered by your typical extended warranty).
 
#10 ·
Agreed. I said that above. There are some exceptions here.

1. A car that has known potential failures that can be costly. Great example, The Early 2016 and before 4 Cylinder Drive-E engines. Boy am I glad I have the CPO coverage. $6,000+ in repairs for the $1600 7yr / 100K old CPO. Sometimes, these warranties pay off if not through luck or chance. I lucked out. Car had only 2000 miles and 11 months of usage. My warranty doesn't expire until June 2022. About 1 more year 14,500 miles to go.

2. High Mileage Drivers. A 10 Year / Unlimited Mile CPO has merit. A lot of driving can be done in say 9-9.5 yrs, assuming you pick up a lightly used vehicle with minimal in service time.

For someone who drives for Uber, Lyft, or work, this plan (while one may not want to disclose this openly as there may be exclusions) this plan has the most potential value. It's not that hard to drive 30,000 miles in a year. That's less 90 miles or so a day. So by the end of the 9-9.5 years, the car could conceivably have close to 300,000 miles. Something will break and I'm sure it will equal or exceed the warranty cost.

That being said, taking the money and investing it is usually a wise move over most warranties. Take the $3000 on the warranty and let the money grow. Use the proceeds for a rainy day car repair fund. If you use it all, great. If you use half, well then you came out ahead.

Still, I think Option #2 isn't a bad investment given the unlimited mile constraint and 10 year time frame. Assuming the car one buys has the majority of that time remaining.
 
#17 ·
@Holeydonut @MyVolvoS60 Thanks for your comments. I see what you are saying. I am a little scared about major components failing. I guess this is the fear insurance companies live off of. Here is what I am thinking:
Get the car from Carvana, get it inspected (have an appointment with a dealer in Worcester, MA) and hopefully I get to keep it. At that point, I will go ahead and cancel my extended warranty with carvana. I am covered for the next year and half or 26k miles. I forgot to mention, Carvana also has a limited warranty for 100 days.
 
#18 ·
@Holeydonut @MyVolvoS60 Thanks for your comments. I see what you are saying. I am a little scared about major components failing. I guess this is the fear insurance companies live off of. Here is what I am thinking:
Get the car from Carvana, get it inspected (have an appointment with a dealer in Worcester, MA) and hopefully I get to keep it. At that point, I will go ahead and cancel my extended warranty with carvana. I am covered for the next year and half or 26k miles. I forgot to mention, Carvana also has a limited warranty for 100 days.
In your case, I think that's the best bet. Take the car for a pre purchase inspection to a Volvo Dealer. Make sure nothing major is wrong. You'll have 1.5 years / 26k left of coverage to fix any issues that appear. Put the $3000 or so you'd spend on a warranty in the bank or an investment account. Use proceeds towards any repairs after the 1.5 year / 26k warranty has expired.
 
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#19 ·
@Gary-16-Xc90 @The_Vermonster @DFrantz I have another quick question. I have found multiple references of Steingold on this forum. Looks like this dealership is pretty good and well regarded amongst Volvo owners here. Long shot but do you guys have any reviews about Steingold's service department? Should I take it to RI for my inspection? It is 50 mins away from where I live. (I am okay with driving that much for a good and honest opinion)
 
#20 ·
@SteingoldVolvoCars has a very good reputation on here. I believe they are also a forum sponsor. If you look up threads, people seem very satisfied with both Steingold's sales and service. This is speaking only from reading the forum.

Google reviews puts them at a 4.9. A few unhappy customers but majority seem very satisfied. Reviews
 
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#26 ·
Not true at all. You're alluding that all warranty repairs are going to run you over $2700. About the cost of the cheapest plan (6 yrs / 100k). Or exceed over $5,000 in the 11 yr / 150k extended.

Plus, failures become more likely with age and higher mileage. Which is why prices increase. So let's do the math. Op picks up the Platinum $5000 11yr / 150k or can invest that money..Op has 8 yrs / 124k remaining on plan due to 3 yrs / 26k at time of purchase

General net return on investment 6%. Op buys extended warranty right now at year 3.

Year 4: $5300 ($300 return)
Year 5: $5618 ($318 return)
Year 6: $5955.08 ($337.08)

etc etc......So it becomes very apparent that his money can grow faster to cover any repairs if he invests it early on versus banking on coming out ahead on a warranty.
 
#30 ·
STEINGOLD WARRANTIES

I pulled the numbers from Steingold. An 11 yr / 150k warranty is $5172 before any additional Steingold discounts.

Again, failures become more likely with age. The shorter the term of the policy, the less likely you are to recoup the money spent.
 
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#29 ·
Not necessarily. So long as you reinvest the returns, you don't pay taxes. If he withdraws the net proceeds, then depending upon the amount, it's taxable. Of note, if an investment is held less than a year and cashed out, you pay capital gains on net proceeds. Otherwise, I'm not sure the taxable rate on withdrawing the premiums post the 1 year mark. I'm by no means an accountant.
 
#31 · (Edited)
FYI: The reason I say the 10 year / unlimited miles has value is due to the unlimited mileage. But value is dependent upon an individual's driving habits. For someone driving 30,000 miles a year, the chances something breaks in exponentially increased with age. Say your car has 1 year in service. You get 9 years of usage out of the 10 yr / unlimited.

At 30,000 miles a year, you could throw 270,000 miles on the odometer in 9 years. Anywhere between 100-270k, the chances for problems due to wear, mileage, and age are elevated. Meaning the $3500 invested may have less of a chance to grow with someone who is a road warrior and subjecting their vehicle to constant use and abuse.

On the other hand with a 11 yr / 150K policy costing $5k doesn't favor the buyer's odds. Your money will grow much faster being invested due to the increased purchase price of the Policy. Combined with the fact that mileage limits on 11 yr / 150k are "low". And someone cannot be a road warrior doing 30k miles a year without blowing through the policy.
 
#36 ·
Some of you are quoting these really high extended warranty prices, but that's not necessarily what it takes to have a good extended warranty. My mom's S60 has a 10 year/120,000 warranty with a small exclusions list that cost less than $3,000. Again, "wear and tear" items within 10/120K covered buy this warranty are GUARANTEED to earn back a massive chunk of what is paid. That's just a FACT. You will not have ANY car go 10/120K an not have to have ball joints, tie rod ends or a few suspension components replaced, and I've yet to see a 10 year old car with "tech" not have at least one failure in 10 years. That GREATLY reduces the actual real-life cost of the warranty, as it is GUARANTEED you will get a good amount of that back.

Anyone that things $1,000-2,000 to have a comprehensive warranty on a car for 10/120K is a waste of time is just not being reasonable. This notion of "put money in the bank to cover repairs because a warranty is a rip-off" is ridiculous. So many people here keep repeatings how warranty companies "make bank" on warranties because they are a rip off. Oh really....car to share where you are getting those facts? I'll let you in on a secret as someone that worked for years with extended warranties (both selling them and then honoring them in service).....warranty companies loose a lot of money on contracts. Want to know where they make their money? The cars that are traded in, sold, or totaled out that refund a "prorated" portion back to the owners. THAT'S where the profit is from. That is pure profit, and it happens a lot. Many people don't even realize or bother to call for a pro-rated refund. If you think warranties are a rip off because they cost more than the average persons saves on covered repairs, you are showing that you totally know nothing about how extended warranty companies earn money.

Show me a service manager, service writer or mechanic that doesn't have an extended warranty on their own personal car......it's a slim minority? Know why? They see every day what % of customers come out ahead on them. It's just a fact. Warranties don't make money by not paying claims....they make money on cancellations, pro-rated refunds and cars that are in the junk yard while their warranty is still in affect.
 
#37 ·
Show me a service manager, service writer or mechanic that doesn't have an extended warranty on their own personal car......
I'm going to call B.S. on that. I know a lot of professional mechanics -- both as friends and a few family members. Not a single one buys an extended warranty. In fact, we've had conversations where the tone could be described as "mocking" towards those who buy warranties for everything. The term "rube" has been mentioned, for example.
 
#38 ·
Highly recommend the Volvo VIP Platinum warranty. We have had over $20k in services on our 2017 XC90 (including an engine replacement at 55k miles). It paid for itself 6 times over, and we still have 3 years/45k miles left on it. Laughing at or mocking those buying extended warranties is... laughable [emoji2369]

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#40 ·
For a Ford I certainly won't buy extended warranty. But the repair cost of SPA Volvo cars is quite high when out of warranty. One or two repairs could make the $3k or less extended warranty worthwhile.

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#41 ·
You're basically making an argument for leasing Volvos instead of buying. If a party puts the same $3,000 to $4,000 from an extended warranty towards subventing the lease residual, an owner could get the value of max-reliability and freshest tech provided by leases instead of taking the chance that they miss a service trip and Volvo says a component isn't under the extended warranty any more.

Anyway some owners out there will come out ahead on these extended warranties. But the vast majority of owners people do not. That's why these warranties are offered to begin with. It's sort of a like a negative-event pick 3 lotto.
 
#44 ·
Agreed.

Companies sell warranties because they make big profits on them. They don't sell them to lose money. And warranties have administrative overhead costs... So you know that they pay out much less than what they charge, on average. A small minority of people will get (un)lucky on a warranty purchase... But, again, even if it would have saved you on ONE car, you're still better off passing on the long-term. Let's say you KEEP your cars a long time and thus will only have 6 cars in your lifetime -- 12 for a couple. Even if ONE warranty saves you on a bad vehicle, you've still screwed yourself on the other ELEVEN warranties.

If a vehicle is soooo unreliable that buying a warranty ever came close to making sense, then I'd suggest simply not buying that vehicle, in the first place... Or lease it if you really love it and just "have to have it". You'll be much better off leasing such a hypothetical unreliable vehicle.
 
#45 ·
Everyone is also overlooking the bigger picture that not only do the warranty companies get the money upfront, but they can also invest all that money over the course of the policy. So for instance, on the example for below, the warranty company gets the 5,000, but the money grows exponentially as well through investment.

So the profits exceed the initials purchase price by accruing over time.

General net return on investment 6%. Op buys extended warranty right now at year 3. An. 11 yr / 150k for $5172. Rouneded to $5000

Year 4: $5300 ($300 return)
Year 5: $5618 ($318 return)
Year 6: $5955.08 ($337.08)

Etc
 
#46 · (Edited)
Yeah, and the worst part is when people finance the extended warranty. So depending on their credit they may be paying 1.9% to 8.99% depending on their credit for the privilege of someone else then earning like 15% (large companies always leverage up their positions to get a much nicer IRR than what an individual may get). And the likelihood of them even recouping of the warranty is actually pretty low. There are lots of loopholes that companies find to disqualify extended warranty claims. The most obvious is usually when the car owner misses a scheduled oil change or full-multi-point inspection.

Basically if you take 100 car owners and they buy extended warranties; these 4 buckets usually plays out (ignoring untimely death or the car being totalled in an accident, etc).

Bucket 1: About 5 people get a real minger of a car that actually has quite a few repairs from 36,001 to 120,000 miles. And these people are fastidious and careful to hit all scheduled inspections and service (they follow the owners manual to a T). They either come out equal to or net positive in terms of claimed value against the money they put in up front.

Bucket 2: About 10 people never file a extended warranty claim because their car simply doesn't need one.

Bucket 3: About 20 people get denied on extended warranty claims because they missed some oil changes and also didn't do the 60,000 service and didn't put in the new belts/battery/blah that was recommended.

Bucket 4: About 65 of them will have some work done under the warranty and feel "happyish" they purchased the warranty. But they don't get near using the face value they put in once you adjust for lost opportunity cost on returns that you pointed out.

So when a customer is shopping for the warranty, the warranty sellers point at examples from the 5 as "happy customers" who got the warranty and everything is rosy. If you're in this bucket without gaming the system (like driving for Uber)... then congratulations. You win some weird lottery and are smart for having bought the rather pricey expensive warranty.

But since we're talking about general recommendations; I think buckets 2 through 4 can be self managed by your own personal "fund" than paying someone to do it for you. If your household has 2 vehicles, and you slam cash into a brokerage account. You'll basically be covered for about 95% of likely outcomes over the next few years during the reasonable useful life of a modern automobile (about 10 years). Yes, capital gains tax sucks. But it sure beats watching big mega corps pad their profit margin instead of keeping the profit for yourself.
 
#47 ·
Also, consider reading this article.

They cite a statistic of 1 in 10 extended warranties actually get used; but I think that's a bit misleading as well. I think the person meant to say 1 in 10 get used in such a way that a high value event is covered. But keep in mind a high value replacement may still cost less than what the person paid up front for the warranty anyway.

Dealers pitch warranties using the worst-case scenario: The electronic system goes on the fritz and the bill will be three grand. Or, the transmission falls out. Yes, it's possible. But it's more likely you will have a leaking water pump or a failing oxygen sensor.
I think quite a few people (not just 1 in 10) actually use the extended warranty to a small extent; just nowhere near enough to pay back the warranty's up front cost. For the vast majority of car owners who want to keep the car 10 years... set aside the money yourself for a rainy day repair. If your doesn't actually need the full fund for repairs... then you come out ahead with money in your pocket. Minus capital gains taxes of course.
 
#48 ·
First, most important part is understanding how much @Shobs is planning on driving. Using the Steingold prices, a 10/100k warranty is $600 more than a 5/100k. That's not worth it if he is doing 25k a year. Likewise, the 10/150k is $1,600 more than a 10/100k, so not worth it if he is driving 8k miles. The risk of the longer terms is that you driving habits may change and you'll hit your mileage before your 10 years. This is part of what the warranty companies bank on. If you look at the Steingold prices you'll see that adding miles almost always costs more than adding years. Going from 7/100k to 7/120k is just shy of $400. But going to 8/100k is only $150.

Another thing to ask is "where is this car getting serviced 5+ years from now?" The Volvo warranty is almost a must if you're doing work at a dealership. If you really want to be talking about smart financial moves, then doing out of warranty work at an indy shop is a decent alternative to an extended warranty. Many indy shops run about half what the dealership costs.

Another important way to look at it is as insurance, not a warranty. Can you self insure? Absolutely. Some people just cant wrap their head around that. The idea of taking the $3k you would have spent on a warranty and investing it is great in a perfect world. But most people wrap a warranty into financing. Or perhaps a "better investment" would be to put that $3k towards a debt like credit cards. Lets be real, a majority of Americans have a significant amount of credit card debt, Volvo owners included. But I digress.

If you think of it as an insurance policy, then you can stop thinking of it as winning or losing. Start focusing on the opportunity cost. Lets say you spent $3k now and at the end of the warranty you only used $2k of it. Was it worth the $1k net cost to not worry about having a bank breaking repair? Did you get a free loaner from the dealership? That could be $35/day in savings right there. I'm not going to say that you will "make money" off a warranty. But the net cost might be a more palatable number and worth it.

When we bought our Volvo we were also dropping down to a 1 car family. It was a no-brainer paying for that peace of mind. It paid itself off with the first repair which ended up being 2 cvs, and a driveshaft. $4500 plus 4 days in a loaner.
 
#63 ·
While the loaner car is a perk, you forget two important arguments.

1. The benefit of a loaner is dependent upon downtime for the repair. If you're in and out within a few hours, you got a loaner for a day. Congrats, you got a $35 benefit.

2. However, don't forget loaners are provided during the factory warranty of 4 yrs / 50k. So any benefit outside of the 4 yr / 50k is the only benefit where you can "dock savings" against a service contract. Utilizing your example. Let's say someone buys a 10 yr / 100k warranty. In those additional 6 years (4 years factory + 6 years extended service contract), you had $2000 in repairs. Let's say 4 repairs with a duration of 2 days each. @ 35/day, that's only $140 dollars saved on rentals. So you spent $3000 and gotten $2140 in benefit, but missed opportunities to save and grow that money over the 10 years.

Plus, the argument of rolling it into financing means the policy costs more than $3k. After factoring in interested accrued against the $3k policy! Wanting "assurance" and "poorly money management skills" are a crap reason to buy a warranty. It's almost like Americans wanting a $1 million dollar house on a $50k / year salary because a bank says "Sure" we'll give you that mortgage! I.E. 2008! Just because you can, doesn't mean you should.
 
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#49 ·
Our extended warranty on the 2017 paid for itself 6 times. Or it paid for itself 5.5 times and paid for my previous car's extended warranty [emoji2369]. And we still have a lot of time/miles left. I'm unsure how I'd be alone in this, given that we are 0/3 for SPA XC90's and their reliability/build quality. Goes back to a couple of my threads about if I'm that unlucky [emoji849].

Extended warranties are definitely a gamble. But Volvo has only solidified that they are mandatory to have any form of confidence in the brand.

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#51 ·
Lol you sound like the least lucky person if you're 0/3 on SPA Volvos. Although, my friend is on his second SPA XC90 and he's having a terrible time with reliability too. Seems like these SPA cars could be rolling lemons worthy of needing a mega warranty. Maybe I should sell my XC60 and get something else...

Most volume car brands can get through 10/120 without too much issue now-a-days... but it's also a crazy strong statement of brand loyalty that a car manufacturer could could go 0/3 with one buyer and still be in contention to try and go 0/4.
 
#50 ·
I guess if Volvos are the bottom of the barrel in terms of reliability, it seems these extended warranties become more reasonable and equitable to procure. But this seems more of an indictment that Volvos aren't cars to own long term than it is a statement that extended warranties are the way to go.

People active on web forums tend to be the most dedicated to their particular vehicle. Most people couldn't even be bothered to create an account on a web forum let alone actually researching ways to use their car effectively or improve reliability.

As a result, many "normals" end up voiding parts of their extended warranty whey they miss service intervals. Maybe someone doesn't get that alignment at 60k so their ball joints, CV, tie rods, bushings, and control arms get voided from the extended warranty. Or someone misses an oil change and sludging/oil-pump issues get voided. Miss an air filter change and your MAF isn't covered. If they let a fuel tank run dry, that voids the warranty on the fuel pump, injectors, and PCV/emissions systems. It's surprisingly easy/common for someone to miss their service appointments after 36k miles; and this is work a fastidious owner needs to do in order to get that value of their vehicle and warranty.

And if they can't be bothered to save/invest $3,000 as a rainy day fund; I think they also cannot be bothered to hit scheduled maintenance milestones. Kind of a lose-lose proposition for someone who isn't ready for the commitment either way (self funded or extended warranty).

I agree the extended warranty is a smart proposition for the buyer of an exceptionally unreliable car, and is also willing to do the legwork to do the scheduled maintaince.
 
#53 ·
If you want to talk about extended warranties and reliability go to multi-brand stores than compare and track service metrics. Go to a store than has Volvo paired with Audi, BMW, MB Jaguar or Land Rover. Interesting enough, the SPA Volvo's continue to be towards the top or the top of the reliability scale. That's not always information the average consumer has privy to, but all this talk of Volvo being unreliable is really a shame. There are countless comparisons in the industry that shows it's just not true.
 
#55 ·
the SPA Volvo's continue to be towards the top or the top of the reliability scale.
Volvo is in the bottom third of all brands consumer reports ranked, and of eight brands luxury (or near-luxury) brands they're third-worst.

Volvo also has a rather small product lineup; despite that, they have two of the ten-least-reliable models. None of the other luxury brands made that list.

Here is Consumer Reports' ranking of the major automotive brands, according to their average reliability score:
  1. Mazda (83)
  2. Toyota (74)
  3. Lexus (71)
  4. Buick (70)
  5. Honda (63)
  6. Hyundai (62)
  7. Ram (58)
  8. Subaru (57)
  9. Porsche (55)
  10. Dodge (54)
  11. Infiniti (54)
  12. BMW (52)
  13. Nissan (51)
  14. Audi (46)
  15. Kia (45)
  16. GMC (43)
  17. Chevrolet (42)d
  18. Volvo (41)
  19. Jeep (41)
  20. Mercedes-Benz (40)
  21. Cadillac (38)
  22. Ford (38)
  23. Mini (37)
  24. Volkswagen (36)
  25. Tesla (29)
  26. Lincoln (8)

The 10 least reliable 2021 models, according to Consumer Reports:

1. Chevrolet Silverado/GMC Sierra 1500
2. Subaru Ascent
3. Volkswagen Atlas
4. Jeep Compass
5. Volvo XC90
6. Chevrolet Colorado/GMC Canyon
7. Tesla Model S
8. Jeep Wrangler
9. Ford EcoSport
10. Volvo XC60
 
#54 · (Edited)
The problem is repair is costly. A/C evaporator is reported to be replaces in the 5th year and it is $2k. This is quite minor stuff. Anything taking hours to replace would be from $1k and up, plus $$$ for parts. And hard to find indy shop that can work on it. So $3k for peace in 10 years sounds quite good to me.

I'd rather to see longer factory warranty and priced in the car price. It is unfair to some unlucky people that they have to pay much more than others to fix their cars after warranty expires.

Sent from my Z978 using Tapatalk
 
#57 ·
One other thing to consider is that these Certified by Volvo extended warranties don't kick in until the 5-year (from in service date) Volvo CPO warranty expires. This makes a 6- or even 7-year warranty far less palatable. Looking at unlimited mile / $100 deductible plans, the 6-year warranty costs $2,222, but it's really only providing a year of coverage. The 7-year warranty costs $2,523, which averages out to around $1,260 per year of coverage. At $2,796, the 8-year warranty gives you an average cost of $932 per year of coverage. And at $2,930, the 10-year warranty gives you an average cost per year of $586.

But here's where it gets interesting. You can always cancel the warranty and get a pro rated refund (less a $50 administrative fee) based on the greater of time or mileage (the latter of which is irrelevant for the unlimited mile warranties discussed above), and this number is calculated from the date you purchase the warranty. So let's assume that your CPO warranty expires on June 8, 2023 (2 years from today). And let's say that today you purchase the 10-year warranty for $2,930. If you decide to cancel the warranty on June 8, 2024, which effectively turns your 10-year warranty into a 6-year warranty, then you should get a refund of around $1,600, making the cost of your 6-year warranty ~$1,300 instead of $2,222. If you cancel it on June 8, 2025, then you will have paid around $1,700 for what amounts to a 7-year warranty. And if you cancel it on June 8, 2026, then you will have paid approximately $2,100 for an 8-year warranty.

All potentially (but probably not) useful information to consider. :D