We bought a car and something else…

Did last post leave you on the edge of your seat, wondering how my epic $250 negotiating battle would go? Well, as you can guess from the title of this post, we ended up buying the car, albeit after almost walking out three different times and spending four hours there. Yeah, it was intense and my armpits got really sweaty.

Battle 1: 

I showed up to the dealership Friday morning and told them I wanted $250 off their lowest price because their advertisement online said our Pilot had bluetooth installed, which I noticed during my test drive it didn’t. At first they said it was simply a marketing mistake by their reps and that they have no obligation to honor the advertisement. I told them that didn’t give me a lot of confidence in their business and that it could be a deal breaker. They ended up giving me the option to drop price the purchase price by $250, or they would install bluetooth in the car. I opted for the $329 bluetooth option so we could enjoy hands-free calling. So technically I didn’t get the purchase price to $18,000 like I hoped,  but I did get it from $20,000 to $18,250 with Bluetooth thrown in the mix.

Battle 2: 

I wanted to pay with my credit card. I called Bank of America that morning and they upped my credit limit to $21,000 to cover the purchase price (taxes, licensing, etc). When the salesman asked if I would be paying cash I shook my head yes. He then said “So with a personal check?”, I said “No, with a credit card.” He looked like he was about to poop his pants. He told me they couldn’t allow that, blah, blah, blah. He had his manager come over and talk to me. I showed him the same stuff I posted here on Friday about their Visa merchant agreement. He called his manager over. We repeated the arguing process again. That manager realized he had no adequate excuse, so he said he was going to call corporate. He came back about 30 minutes later and basically said that since no paperwork was signed they would just stop the deal and not sell me the car if I wouldn’t budge on the credit card thing. Realizing I wasn’t going to get the full cost charged, I convinced him to let me put $5,000 worth of the purchase on it.

Battle 3: 

The fine print. Man buying a used car is tricky. You really have to pay attention to everything you negotiate verbally and make sure it appears that way VERBATIM on the paperwork. Our Pilot has a small alignment issue. The vehicle naturally drives straight, but the steering wheel doesn’t sit quite level as the vehicle is driving down the road. It was annoying so during negotiations I told them repeatedly if I was going to be buying the car, they would have to fix alignment. They indicated multiple times it wasn’t an issue and that it would be taken care of.

Fast forward to the financing office (yes, even when you pay cash you still have to go to the financing office). I’m given the paperwork indicating what they “owe” me. There are two things listed. 1) Install Bluetooth. 2) Check alignment. I asked the finance officer if check alignment meant “repair” alignment. I was told it does not and it only requires a mechanic to look at it. Had I not caught that one little item they would have had no obligation to fix the alignment, and I would have been up a creek without a paddle. I told the dude I wasn’t signing anything until the word  “check” was changed to “repair” alignment. This lead to another 40 minute debate with the sales manager. It wasn’t until I grabbed my keys and said “This was a waste of time” that they finally caved and agreed to do the repair.

And how I probably got swindled, Battle 4:  

As I was singing all of the paperwork, the financing manager offered me, like he does all clients, an extended warranty. He gave me his pitch on why this is smart for a six-year-old car. I told him I wasn’t interested. He gave some appealing reasons for why the warranty was worth my consideration (it covers wear and tear and not just breakdowns, the transmission costs twice as much to fix as the cost of the policy, etc), but I wasn’t having it. We proceeded to talk about other things like car insurance quotes online and deal with the alignment issue I described above. As everything was wrapping up, he casually mentioned that the warranty was fully refundable in the first 30 days with no penalty, and at any point in time I could cancel the warranty and be refunded a prorated amount of the policy cost.

Frick. He sold me on it. I ran some numbers on my calculator watch and decided I would pay for the longest term plan (four years / 50,000 miles) since it worked out to the best monthly rate ($48/mo). That’s right. I forked over another $2,500 (after taxes) for an extended warranty.

I  went online and googled the extended warranty company and of course there are horror stories from people who say they bought the coverage and were denied service for terrible reasons. I read through the whole policy and found out that in order to keep it valid you have to change your oil every 5,000 miles or every six months (whichever comes first) and keep documented proof from the dealership of the maintenance. If you accidentally forget and drive 5,001 miles, or wait seven months before you change your oil, your entire warranty is void and they are no longer required to provide coverage in the event something breaks. I have three weeks to decide if I want to keep this policy, and still be eligible for a full refund. For that reason alone, it makes sense to at least keep the policy for the first month on the off-chance my transmission decides to spontaneously combust.

That said, the better part of me knows this company wouldn’t offer the warranty if they weren’t making money on the product. That knowledge, by default, should indicate that an extended warranty (especially a third-party one) is typically a crappy deal for the consumer. They totally sell you on the “peace of mind”, but from what I read online, nothing about these policies is peaceful as most claims are denied.

Any of you have experience with extended warranties (not talking manufacturing warranties, but third-party ones like Olympicare)? Are they as nightmarish to deal with as I have heard? I should probably cancel the warranty huh?

 

34 thoughts on “We bought a car and something else…

  1. What an ordeal. That extended warranty looks like a big headache. Too many holes in it. Take that $2500 and put it into an auto maintenence fund. If you really wanted a warranty you should have just bought a new car like I said before 🙂 Nice SUV, but I’m not a fan of spending a hundred bucks to fill up my gas tank…I would name it the Gas Starved Recreational Vehicle 😛 J/K! Congrats on your purchase, just get that $2500 back asap!

    • I agree – that warranty sounds like much more trouble than it’s worth. And to keep up that oil change regimen for four years? No thank you. I think Stacking Cash has a great idea to set up an auto repair account instead. As for naming that car, I don’t know how you feel about girls names or boys names for cars, but if that is a boy, it looks like a Thomas to me. Tom for short – he just seems like a good, solid Tom, not in your face loud or wanting to show off, just a Tom.

  2. Congratulations on buying a car. Now your life will get more complicated. Anyway, CANCEL the extended warranty and put the money in the bank to pay for repairs on the car. If anything big happens bad, just sell the car then.

  3. NINJA!!!

    DUMP the warranty. The “lemon law” will protect you for 30 days anyway, which the financing manager knows, so that’s why they don’t mind the “refund” because they have to give you another car or your money back if something major (like the transmission) goes out in the first 30 days. You can look up the lemon law online and see for yourself.

    Congrats on the new car! Now get rid of that warranty!

      • Not exactly, but I don’t think he qualifies nonetheless:

        “You do not have to be the original owner to request arbitration. Later owners of a vehicle may request arbitration if the vehicle was purchased or leased:
        within two years of delivery to the original retail consumer and within the first 24,000 miles of operation.”

        • From the Washington State Attorney General:

          What is the Lemon Law?
          The Washington State Motor Vehicle “Lemon Law” is designed to help new vehicle owners who have continuing problems with warranty repairs of substantial defects. Among other consumer benefits, the law allows the owner to request an arbitration hearing of Lemon Law disputes with manufacturers through the Attorney General’s Office.

  4. Cancel that warranty ASAP.

    If you want an extended warranty, get one yourself. You are right… the dealer is making a bunch of $ off of you. I have a buddy who was the finance manager, he told me that everything they offer you is a scam and they know every counter argument in the book.

    • Agreed. As I said, Ninja, these guys know every trick in the book for getting money out of your pocket. So what if the car is 6 years old. It’s got plenty of life in it yet, depending on mileage and how you treat it. Consumer Reports always recommends against extended warranties; more often than not they just put more money in the dealer’s pocket.

      Check your insurance policy also on repairs. With my last car, I was covered by Geico for all repairs (excluding normal wear and tear) over $250 for the life of the car. This was a big help when I needed a $1100 brake pedal booster. (With my present car, the coverage lasts up to 75K miles.)

      But these companies are getting hilarious with extended warranties. Just last week I bought a $6 1-foot audio cable at Radio Shack. The kid behind the counter offered me “peace of mind” if I bought a 3-year extended warranty for 99 cents. Needless to say, I decided against peace.

  5. I got the warranty with my car and loved it.

    You just have to use it.
    Wipers out of sync? Bring it in.
    Engine knocking? Bring it in.
    Slow starter?
    Drips on your driveway where you park?

    Then, a month before the warranty expires, invent something wrong and take it in. Tell them you want a complete checkup on everything the warranty covers.

    I made my money back a couple of times over.

  6. Buying a car from a dealership might be the most painful thing i’ve ever done–they wouldn’t honor their ad, they gave us all sorts of song and dance about our trade-in, blah blah blah–so glad we walked out with our pants still on (but not our shirts) and a car we’ve enjoyed the past two years. My dad always warned me that the more confident you feel walking out of the dealership, the more likely it is you were big-time hosed.

    I’d dump the warranty if I were you.

  7. For the love of God, cancel the extended warranty, it is a waste! Instead, take the money you would spend each month and put it in a “car repair” savings account.

  8. If you did want peace of mind in an extended warranty, check out Costco, they offer a warranty that is pretty affordable and provides great coverage (exclusionary).

  9. My husband works for a dealership (not sales but repairs) and he said the biggest mistake people make is not using their warranty. Repairs that cost hundreds/sometimes thousands of dollars are covered. All that is really required is changing the oil (which can be done at the dealership at a reduced cost in most instances and would be documented) and regular maintenance.

  10. I have purchased three used cars, each with factory extended warranties. In 2 out of the 3, I made my money back plus a some, or a lot. The factory warranties seem to be legit in my experience. Third party warranties might not be so great, not sure?

  11. Yup, you got ripped off on the warranty. Warranties are negotiable, like everything else. If you REALLY wanted one, you could offer them $1K for it and they probably would’ve taken it! I wanted one on our Prius because of all the electronics, negotiated the dealer down, and got a great warranty that includes roadside assistance and towing for all cars in the household for under $1K. It did improve my peace of mind, so it was worth it.

    Congrats on the car! You did a great job. Since you didn’t enjoy your purchase experience, here’s my method for getting a good deal with no sweat:

    Give the dealership a full business day after a test drive before contacting them again by phone. More often than not, the sales guy or gal will call you back first and save you the trouble of getting their phone number out! Then make the dealership work for you on the phone. Sometimes I drag the negotiating process out 3-4 days. I’ve gotten crazy good deals this way. By about the third phone call they are getting tired of negotiating and start to cave, sometimes calling in a manager or finance guy that you’re then speaking to directly. They don’t have you captive in their show room, so they have less leverage and are afraid of losing the sale. It eliminates most of that 4 hour visit to do your deal. Personally, I hate that and won’t do it. Once we’re agreed on price I ask them to prepare all the paperwork before I get to the dealership. Much less painful for the buyer!

    Again, congrats and enjoy the ‘new to you’ car!

  12. Warranties are pretty good in my experience. What got me was the “check alignment” versus “repair alignment” in the contact… man, good thing you caught that. I hate dealerships, I always feel like I”m getting cheated, and I think eveyrone does, and it’s because we ARE getting cheated!

    Dr. Awesome should be your new cars name.

  13. I bought an extended warranty on my used car (which I bought from Enterprise). Never had any trouble getting it honored and it more than paid for itself. And that car was only 1 year old when I bought it!

  14. I bought an extended warranty with my last dealership purchase, a used 2005 Toyota Camry. The car had previously been owned by my father-in-law who traded it in without notice for a Highlander. That was in 2009. I had buyers remorse over the extended warranty and lost sleep until I cancelled the darn thing. Three years later I have put about 80,000 miles on the car and have had no issues and no regrets. If you do decide to cancel, they will probably try to only refund the base price before the sales taxes, as this is what they tried with me. I am in Washington state as well, and I did eventually get the sales tax returned to me, but only after some creative story-telling on their part. Congratulations on your new ride and best of luck with it’s longevity!

    • Back in college, my friend Eric had a VW van he called “Henrietta.” As no doubt the original Henrietta is long dead and buried, I’m sure the name is available now.

  15. I would cancel the warranty. I live in St. Louis, where the biggest used car warranty company is. They were recently sued by multiple people and now the government is forcing them to go bankrupt and dissolve the company because of ridiculous rules like the ones you stated. They hardly paid for anyone’s service. Instead they built a castle in a suburb around here with all the money (NOT EVEN JOKING!)

  16. Both my brother and my husband bought extended warrantees on used cars that paid off. Given I’ve only known 3 people to buy used cars from dealers, if I ever have to buy a used car from a dealer, you can bet I’ll be buying the extended warranty.

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