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Why Not to Buy an Extended Car Warranty (Scam)

rev up your engines, today I’m going to
help you decide if you should buy an extended warranty when you buy a car or not, now
extended warranties came into my mind a few days ago, when one of my customers
was buying a brand new car and they said, the salesman was pushing and
pushing for hours to sell them one of these extended warranty plans, and since
they’re buying a new Toyota I said, well you didn’t waste your money and buy one
did you, they said no, we just went with a warranty that the car came with, but they
wanted to know why they were pushing the warranty sales to him, well I did a
little research on the internet and found out why, the answer was simple, it
turns out that when they’re selling you one of these extended warranty plans, the
Commission to the sales guy is almost 50% of what you’re paying for the entire
insurance policy, so they’re making the money selling it to you, and conversely,
that means that half of the money you’re spending goes for a commission, so the
insurance policy is only worth half of the money you pay for it, that’s a great
deal for the salesman, but not such a hot deal for you, as an example, I had a customer
with a Volvo that bought one of those extended warranties on a used car, and he
brought it to me and I looked I said, well the rear main seal the engine is
leaking oil, so I called up the company and they said, oh well that’s not covered
under the warranty, you have to realize that an extended warranty is just an
insurance plan through an insurance company, and guess who decides what’s
covered and what isn’t the company itself, and when I read through the guys
policy, I told him, I said, the only person that could really comprehend this
policy would be a lawyer / mechanic, because there were legal terms, but there
are also mechanical terms, so you’re not going to find too many lawyers /
mechanics to help you out, and to make matters even worse, I had another
customer who had a Fiat, and they bought an extended warranty from a third party,
when they brought it over here and I found out that it needed an alternator, I
called the 1-800 number, only to find that the company didn’t exist anymore,
they’d gone bankrupt, I find if you’re buying a quality car like a Toyota, or Honda,
and something that’s really going to last, you’re better off looking at the money
that it costs for the extended warranty, just put that in the bank, and use that
for repairs, and you’ll probably be thinking Scotty years down the line, when you
don’t spend any of that money on the repairs that would have been covered, and
you still have the money that you would have wasted on this policy, but there are
times that I do advise my customers to buy a warranty policy, and that is when
they buy the wrong type of car, if they buy a Mercedes, or a Jaguar,
by all means buy a policy, but buy it from the dealer where it’s going to be
stood by, because I’ve had many customers with Jaguars, Mercedes, Porsches, they
ended up getting five or six times the amount of work done that they paid for
the policy on those cars, because they break down as they age, but then again if
you’re wise, don’t even buy those cars in the first place, so now you know a bit
more about extended warranty policies why it’s probably not a good idea for
you to waste money on them, but why the salesmen love try to sell them to you, more
quick fixes on the Scotty Kilmer channel.