Extended warranty

[DrBob]

Whether or not to buy an extended warranty is an individual decision, but I'd like to make a couple of points:


I don't believe that my wife or I have ever bought an extended warranty on anything, except our motor home. The decision to spend an extra $4000 for a 5-year Good Sam Extended Warranty was based on the facts that we had never previously owned a travel trailer or motor home: our first trip lasting more than a week was to be from Jacksonville, Florida, to Alaska and then to Southern California before traveling to Tennessee to find our retirement home. We figured that we'd recover at least a good part of our investment over a five year period because that would be less than $1000 or repairs a year.


Four years later, we have recovered more than the cost of our investment, and would have recovered even more if we hadn't forgotten that we had the extended warranty when our rear air conditioner failed a little more than a year ago. Just since then, the warranty has covered most of the cost of replacing our hot water heater before we learned anything about anode rods, repairing the slideout mechanism, and more recently replacing the front air conditioner and the backup camera.


The original water heater in our coach was a gas-only unit, even though the saleswoman had told us that in could run on either gas or electric. When we discovered otherwise, the dealer agreed to install a Hot Rod at no charge, but we only learned about checking/replacing the anode rod three years later. The extended warranty, however, covered nearly all of the cost of replacing the water heater with a dual-source unit.


We've been fairly satisfied with what the extended warranty covers, but disappointed that they refused to cover a few things that we assumed would be covered. For example, the leatherette covering on the passenger-side seat is peeling in several places, even though none of the other pieces of furniture show any wear. Yet, the chair is not covered per the insurance company.


Our bigger problem is getting service scheduled and completed. That wasn't the case for the water heater, but it took from early March of this year until early July to get the front air conditioner fixed to our satisfaction: Three weeks before we could even bring it in for service, another three weeks before the problem was diagnosed, a week to get the new air conditioner into the dealership, a few more days to get it installed, two days after picking it up to discover that it was vibrating so bad I was afraid to use it, another two weeks before I could bring it back to the shop, and a solid three weeks before they could find an open service bay to fix it!


Just because your are able to self-insure doesn't mean that you should self-insure. We paid cash for our home, but we wouldn't dream of going without homeowner's insurance. We could have paid cash for our motorhome, but chose to finance at 4% after making a 20% down payment because we bet that our stock market investments would earn enough that it made sense to leave that money in the market (that's proven to be a smart bet, at least so far). However, modern motorhomes are complex machines with a lot of expensive mechanisms and electronic controls. As a result, they can be very expensive to repair or replace, and you will need to repair and replace things if you plan to use yours as much as we've been using ours (roughly half-time) to make long trips on sometimes rough roads (like I-40 in parts of Arkansas).


Again, whether it might be worthwhile to buy an extended service plan is something you have to decide based on your how much you have invested, how much you can afford, how you plan to use your new home, how often you plan to use it, your personal risk aversion, how your partner feels about it, and a host of other factors. It made sense to us, and we got "lucky" by having enough failures to make it worth the investment.

[jerichorick]

Originally Posted by sewmom6

Buying a used unit- any suggestions on good extended warranty companies?

From my experience, if you are handy at all, save your money. Truly, save your money. Start a repair account. Pay it each month like you would a bill. Put, lets say, $250 a month in this account. In 10 months you have $2,500 available for repairs. Build this fund up to about $10k. Use it for your repairs. Doing this gets you away from the hassle of dealing with the insurance company, deductibles and you may be able to negotiate the repair cost.

I have had 2. Never again. The last one just expired. I lost more than they ever covered.
Happy trails.
Rick

[BobC]

I think this has been beat to death, I'm unsubscribing. Over and out.

[sajohnson]

Originally Posted by BobC

I think this has been beat to death, I'm unsubscribing. Over and out.

I guess that means you won't see this post, but I'm sorry to see you go.

Your posts have been fantastic and really added to the discussion.

[sajohnson]

Originally Posted by DrBob

Whether or not to buy an extended warranty is an individual decision, but I'd like to make a couple of points:


I don't believe that my wife or I have ever bought an extended warranty on anything, except our motor home. The decision to spend an extra $4000 for a 5-year Good Sam Extended Warranty was based on the facts that we had never previously owned a travel trailer or motor home: our first trip lasting more than a week was to be from Jacksonville, Florida, to Alaska and then to Southern California before traveling to Tennessee to find our retirement home. We figured that we'd recover at least a good part of our investment over a five year period because that would be less than $1000 or repairs a year.


Four years later, we have recovered more than the cost of our investment, and would have recovered even more if we hadn't forgotten that we had the extended warranty when our rear air conditioner failed a little more than a year ago. Just since then, the warranty has covered most of the cost of replacing our hot water heater before we learned anything about anode rods, repairing the slideout mechanism, and more recently replacing the front air conditioner and the backup camera.


The original water heater in our coach was a gas-only unit, even though the saleswoman had told us that in could run on either gas or electric. When we discovered otherwise, the dealer agreed to install a Hot Rod at no charge, but we only learned about checking/replacing the anode rod three years later. The extended warranty, however, covered nearly all of the cost of replacing the water heater with a dual-source unit.


We've been fairly satisfied with what the extended warranty covers, but disappointed that they refused to cover a few things that we assumed would be covered. For example, the leatherette covering on the passenger-side seat is peeling in several places, even though none of the other pieces of furniture show any wear. Yet, the chair is not covered per the insurance company.


Our bigger problem is getting service scheduled and completed. That wasn't the case for the water heater, but it took from early March of this year until early July to get the front air conditioner fixed to our satisfaction: Three weeks before we could even bring it in for service, another three weeks before the problem was diagnosed, a week to get the new air conditioner into the dealership, a few more days to get it installed, two days after picking it up to discover that it was vibrating so bad I was afraid to use it, another two weeks before I could bring it back to the shop, and a solid three weeks before they could find an open service bay to fix it!


Just because your are able to self-insure doesn't mean that you should self-insure. We paid cash for our home, but we wouldn't dream of going without homeowner's insurance. We could have paid cash for our motorhome, but chose to finance at 4% after making a 20% down payment because we bet that our stock market investments would earn enough that it made sense to leave that money in the market (that's proven to be a smart bet, at least so far). However, modern motorhomes are complex machines with a lot of expensive mechanisms and electronic controls. As a result, they can be very expensive to repair or replace, and you will need to repair and replace things if you plan to use yours as much as we've been using ours (roughly half-time) to make long trips on sometimes rough roads (like I-40 in parts of Arkansas).


Again, whether it might be worthwhile to buy an extended service plan is something you have to decide based on your how much you have invested, how much you can afford, how you plan to use your new home, how often you plan to use it, your personal risk aversion, how your partner feels about it, and a host of other factors. It made sense to us, and we got "lucky" by having enough failures to make it worth the investment.

Excellent post!

Congratualtions -- you're one of the few lucky winners! j/k

You make some very good points. One of the most important being that the amount of use an RV gets is a critical factor that has not been mentioned (as far as I recall).

As far as I know, the underwriters of these extended warranties typically assume an "average" amount of use. We have no way of knowing what that average is, but with many RVs just sitting in storage, but it's a safe bet that a trip from 'Jacksonville, Florida, to Alaska and then to Southern California before traveling to Tennessee' is well above the normal amount of travel -- probably 3-5 years worth at least.

So, that is one case where buying an extended warranty may make financial sense -- when a person/couple reasonably expects to be using their RV extensively -- much more than the average owner does.

Another good point was your mention of the difficulty in getting repairs completed properly, and in a reasonable amount of time. Of course that is an issue whether or not a person has an extended warranty. I suppose there are cases where -- from the RV repair shop's POV -- an owner paying cash out of pocket may be preferable to a warranty company. My understanding is that some warranty companies are difficult to deal with and slow to pay. But assuming a good warranty company there should be little if any difference.

A third issue that you mentioned, which is very important for owners to be aware of, is that there are always items that are NOT covered. When reading any warranty (for any product) it is a good idea to go straight to the "exclusions/does not cover" section -- the one that's typically in tiny grey font that you need a jeweler's loop to read. Study it carefully.

As for being self-insured, just like casinos, insurance companies always "win". They must, or they could not remain in business. Therefore, aside from things that most of us simply cannot be self-insured for -- life; health; auto; home; disability -- it makes financial sense to be self-insured. There are always going to be 'outliers' -- like the few people who win the lottery jackpot -- but the vast majority of people will be better off financially the more they are self-insured.

Anyone who can afford an RV and the cost of an extended warranty can afford to self-insure their RV. Take the money that would have been spent on the warranty and put it in a money market fund. Add to it periodically -- maybe quarterly or biannually. The most expensive, worst case, repairs (engine and transmission) are very unlikely, and are covered under the chassis "drivetrain warranty", which is usually 5-10 years and 60K to 100,000 miles.

Smart move taking the 4% financing -- you should come out ahead on that. That's another example of 'playing the odds'. Could the market go down? Could we have another crash like the one in 2008? Sure, but it's more likely that the market will return well over 4%, long term.

[BobC]

I confess, I unsubscribed, but couldn't help looking. Thanks for the complement. Your last post, sajohnson, was right-on. Good points about the high use factor and the drive train warranty.

I, too, financed my motorhome with a home equity loan rather than take money out of my investments. I did so in Dec 2017 and I'm just about break-even +/-. I'm paying it off with my "minimum required distribution".

[Ahuka]

Originally Posted by BobC

I agree, if you can't afford to self insure, you maybe should re-consider your decision to buy. A pre-purchase, independent inspection, both "house" and "truck", with the emphasis on inspection at a good shop used to your chosen rig's chassis. You don't want to be surprised with significant transmission and/or engine work which can be catastrophic. Most house systems are relatively easy to replace for significantly less than a new transmission. Not that refrigerators and air conditioners aren't expensive, it's just that they won't break the bank. A bad engine or transmission is grounds for rejection.

I would never buy a used RV without first getting an inspection from a independent certified inspector. A really thorough inspection might easily eat up most of $1K, but not doing it is about as silly as buying a house you never had inspected. I think the outlay is worth every penny, and you will get one of three outcomes:

1. Inspector finds significant problems that get you to walk away.
2. Inspector finds no significant problems so you have some peace of mind.
3. Inspector finds manageable problems that you can use to negotiate to either have the seller fix first or reduce the price so you can fix them.

None of these outcomes looks bad to me.

[NYBobbo]

For me I once had an extended warranty for a car. The steering rack went bad and it took the dealer (who sold me the warranty) over 6 weeks to fix it. Never got a good answer from them as to what was going on, no free rental or loaner. It was many moons ago but I learned my lesson.
FWIW: I even avoid extended warranty programs for appliances. Seems they break soon enough for standard warranty or last till they need replacing.


I can understand an extended warranty for someone that is purchasing an older unit where one would assume there will be things failing, but then again why buy something that has a higher risk of needing work.

[BobC]

For what it's worth, there's only one type of extended warranty I've purchased in the last few years. That's Harbor Freight's extended power tool warranty, and then, only if I plan on using the tool heavily beyond the initial warranty and within the extended warranty period.

It's a fairly reasonably priced, "no questions asked", immediate replacement (repair if items were over $500) deal. My son-in-law used to work for them and tells me the only exception is when someone comes in the second or third time for a replacement due to obvious abuse or misuse.

Despite my purchasing these, the arguments about the house always winning in the end, still hold. I guess this falls into sajohnson's comments about use levels.

I wonder what a "no questions asked", immediate replacement warranty would cost for a motorhome.

[jerichorick]

Originally Posted by Rossi6998

I like Protective's Xtraride. I bought this warranty (service contract) when I bought the motorhome new. Now five years old, I repurchased Protective's Xtraride service contract (five years, no mileage limit, $100 deductible) through Eagle Vision RV. They are a seller of service contracts and have a couple different plans to offer. Recommend you ask for Billy Lewis (229-329-7099). He was straight forward with me and saved me quite a bit of money over my Dealership quote.

As indicted in some of the other posts above, many believe service contracts are a waste of money and you should put the money away for when you need it for repairs. Personally, I like having a service contract. Many people are not disciplined enough to put several thousand away for an RV repair. My theory is you pay now or you pay later, either way, you are going to pay if you own an RV for any length of time. Just read all of the posts within this forum of the various things that break (air conditioning, refrigerator, slide out, leveling jacks, inverter, electric steps, etc) than factor in the current labor rate in the neighborhood of probably $125 an hour.

With my motorhome already being five years old, purchasing a service contract gives me piece of mind knowing it will handle just about anything major for another five years.

Good luck with your decision.

I have 2 questions for you. 1) how much did the contract cost? 2) how much has it payed out?

[sajohnson]

Originally Posted by Ahuka

I would never buy a used RV without first getting an inspection from a independent certified inspector. A really thorough inspection might easily eat up most of $1K, but not doing it is about as silly as buying a house you never had inspected. I think the outlay is worth every penny, and you will get one of three outcomes:

1. Inspector finds significant problems that get you to walk away.
2. Inspector finds no significant problems so you have some peace of mind.
3. Inspector finds manageable problems that you can use to negotiate to either have the seller fix first or reduce the price so you can fix them.

None of these outcomes looks bad to me.

Good advice.

[sajohnson]

Originally Posted by BobC

For what it's worth, there's only one type of extended warranty I've purchased in the last few years. That's Harbor Freight's extended power tool warranty, and then, only if I plan on using the tool heavily beyond the initial warranty and within the extended warranty period.

It's a fairly reasonably priced, "no questions asked", immediate replacement (repair if items were over $500) deal. My son-in-law used to work for them and tells me the only exception is when someone comes in the second or third time for a replacement due to obvious abuse or misuse.

Despite my purchasing these, the arguments about the house always winning in the end, still hold. I guess this falls into sajohnson's comments about use levels.

I wonder what a "no questions asked", immediate replacement warranty would cost for a motorhome.

"I wonder what a "no questions asked", immediate replacement warranty would cost for a motorhome."

Now that would be nice, wouldn't it?!

No fighting the dealer over warranty work on a rig they didn't sell.

No waiting for weeks or months for work to be done.

No concerns about the work being done correctly.

No disputes with the warranty company.

Just drive in and pick up a new RV!

[GTBob]

My extended warranty choice is Good Sam. Not because it has the best coverage, or is the least expensive, or is accepted everywhere (although I think all of the above is true), but I can change my deductible (thus, my quarterly payment) anytime I wish. So, when I'm not on the road, I scale it to $1000 deductible, but when I'm traveling I go with a $250. Makes a huge difference!

[MrMarog]

I was so lucky when I purchased my slightly used 2016 Navion 24J from DeMontrond RV in Houston. Included with my MH was Warranty Forever What's Covered - National Automotive Experts It does not cover everything but for 100% free FOREVER it is unbelievably good. My MH was 11 months old and only had 7K miles, and my purchase price was 85K . When I returned back to Florida I had to pay sales tax (7% first 5000, 6% remainder).

[rrtribble]

This is my 2nd used MH and I purchased extended warranties on both. Only kept the Tiffin gasser 6 weeks so never got my monies worth but sure had peace of mind. With my new to me '07 Itasca Meridian 34H I bought a 12 month plan through my dealer and haven't had to use it yet. Fixed even the jacks myself but I do have peace of mind. Plan on using it for the full 15,000 miles during the 12 months to insure everything is as good as can be.
Staying in DP now while S&B gets new sewer lines. Camping out on our own pad. Allowing me to get some things done inside that I wanted to do.
My hope is that by this time next year I will be proficient in caring for my DP enabling me to do the oil change and filters. My back is healing fine and elbow a little slower - old age creeping in and bones not as strong as they used to be. LOL
Still will take it in for brake adjustment, alignment, etc.

By the way, make sure you keep records of all your periodic maintenance so when and if you need your extended warranty you'll be covered. If you do it yourself, copy your receipts and staple them to a sheet of paper and write the date, Odometer reading and what you did. Keep with maintenance file or warranty people could, probably would deny claim. It's spelled out pretty clear in the paperwork. Hope I don't have to use it but its like life insurance - want to make sure DW is covered and DP too.

Have a great day ya'll
Richard