Buying a warranty at the time of sale: Rip-off or Bargain?

Amber Watson Tardiff

We’ve all been there.  You just made the decision to purchase a new car.  You’ve finally come to terms with having car payment for the next four to six years.  You may even be feeling sick at this point as you get ready to sign the paperwork. 

And no sooner than you sit down, you’re hit with the infamous sales pitch that goes a little something like this: “Will you be purchasing an extended service plan —because if you don’t take advantage of our offer TODAY, the price will double or even triple when you go to buy it later….”

Then you panic.

As a former finance and insurance manager, I can spot that panic from a mile away.   But I also know what it’s like to be in your shoes as a consumer.

So is there any truth to the manager’s insistence that you have to buy a warranty at the time of sale?

Honestly, it depends.

In most cases, the warranty cost will not significantly jump within the first 12 months/12,000 miles that you own the car.  Therefore, if you are unable to buy a warranty at the time of sale, you can generally come back with a credit card down the road and still find a significant savings than if you wait until the expiration of your factory warranty.

However, there are a few situations where buying the warranty at the time of sale makes good financial sense for you, the consumer.

The number one reason to purchase your warranty at the time of sale is to include it in your monthly car payment.  Comprehensive warranties can cost anywhere between $800- $2500.  Therefore, it’s much easier to tack on an additional $25 a month to your payment than come up with one lump sum down the road.

You should also consider buying a warranty at the time of sale if you plan to keep the car for more than 3 years.  Your business manager isn’t lying when he/she tells you the price can double or triple right before your factory warranty expires.  If you have any doubts, ask the manager to quote the price for a car that already has 3 years/36,000 miles on it.  You’d be amazed at the increase.

Finally, I’d highly recommend buying a warranty at the time of sale if your car is pre-owned.  In most cases, dealerships sell “wrap” coverage that extends the remaining factory warranty or provides better coverage to match an existing powertrain warranty.  Either way, these plans are discounted and you usually can’t come close to the price of a “wrap” after you decline the initial offer.

 

So based on the information above, it’s clear that buying an extended warranty at the time of sale isn’t for everyone- but it’s certainly not a gimmick either. 

It’s up to you to evaluate your circumstances and plans for the vehicle.  If you’re the type of person that keeps their cars and doesn’t have spare change laying around for a $2500 car repair, than budgeting an additional $25 in a payment is the way to go.  Then again, if you buy cars like a woman buys shoes, forget it.  Educate yourself on GAP insurance instead (because that’s definitely something you’ll need!)

The bottom line is, don’t be put off by the sales pitch.   Yes, the dealer wants to make money, but some of the things they offer are for your good.   To come to a site like MyDealerReport.com means you’re on the right track, so take the time to learn what products they are offering and what kind of savings you will get for immediately signing on the dotted line.

You may visit Amber’s personal blog at www.caringlegalservices.com

Also vist us at MyDealerReport.com, http://twitter.com/MyDealerReport, http://mydealerreport.tumblr.com

Mr. Big Volume “Bill Heard” is Silented

It was totally shocking to hear that Bill Heard Chevrolet the largest Chevy retailer in the nation was going out of business.  I was extra shocked because Bill Heard is where I was introduced to the car industry as a sales person.  According to comments left on this article “Bill Heard Closes” consumers are happy with the closing of the Bill Heard stores.

Bill Heard has been plagued with consumer complaints for years.  The Bill Heard location I started at in Nashville, Tennessee shut down over a year ago due to continuous complaints filed with the BBB and Consumer Affairs office.  So those of you who don’t think dealer ratings and reviews are powerful or even necessary, think again.  The old school way of doing business is gone.  Consumers are tired of being victimize.  Some dealers get it, however there still remains those auto industry insiders who doubt.

Well our mission here at MyDealerReport.com is to help those dealers and consumers who want a healthy trusting business relationship.  As for the rest of those dealers who want to continue bad business practices “Good Luck”.  And I don’t even believe in luck. The question is how many more closings or complaints will it take to clean up the auto retail space?  Listed below are some of the comments left by users concerning the closing of Bill Heard from the above article:

View of company twitter also and keep up with the latest activities: MyDealerReport Twitter

pziasd wrote:

Bill Heard Chevy has ripped off his last customer with their high pressure sales tactics and predatory loans. Good bye and good riddance! I tried to buy a truck from them a few years ago. The sales guy wanted the keys to my car so he could get it appraised. They wouldn’t return the keys and kept trying to get me to sign off on a truck I didn’t want. I called the police who came out and told the sales guy to give my keys back. The sales manager lied to the cops telling them that I was the one that caused the disturbance. Unbelievable!

 

mtm747 wrote:

What a great move! This car dealership must be ranked #1 in the nation in complaints too! Terrible service after the sale and all they want is to get you into a vehicle no matter what it takes, then your on your own. Good Riddens!

 

MeteorMan wrote:

Whlie most dealerships suffer this, Bill Heard in Sugar Land was staffed with the worst bunch of leg-humping sales guys you ever saw. Couldn’t get out to there fast enough.

 

texiban wrote:

I would have never bought a car from these dealerships. I went to LandShark once and that was the most ridiculous dealership I have ever seen. I bet that I ahd at least 6 salesmen at my door before I got out of my car.

Dr. Phil: The dysfunctional Car Buying Relationship

Watch our CEO as he explains why MyDealerReport.com exist and why we are needed.

Dealer Digest Daily | Home

Dealix and WardsAuto Are Now Believers in Dealer Ratings…

I received two interesting emails this week, a press release from the Ward’s “Automotive Spring Training Conference,” presented by Autobytel (http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/03-10-2008/0004770844&EDATE=)
and the other came from Automotivedigest’s interview of Dealix’s Kevin Root (http://dealerdigestdaily.com/video//index.html?videoIndex=1) . I have spoken a lot about how our space, car dealer ratings and reviews is gaining traction, now I can shut up and let the rest of the industry do the talking for us. Therefore, click on the links above and see what the experts have to say about car dealer ratings and reviews.

 

 

 

Thanks, Auto Users and Dealers!

On behalf of our team and myself I would like to thank all the users and dealers for their feedback. The excitement level on both sides was extremely high and satisfying. I personally want to thank my team for the great work they have done and their continuous efforts. But the best has yet to come!  Keep watching and we will keep innovating.

The “Digg” for Bazaar Car Shopping & Servicing Experiences

Today we have launched our newest tool for car shopping consumers, MyDealer Stories. Yes, we used a similar model as “Digg.com’s” news website. However, our service is unique to the needs of the auto consumer. At MyDealer Stories you will found the wildest, unbelievable and informative stories about Car Dealerships and Service Centers.

Users have the ability to become publishers of their own experiences or share in the unbelievable bazaar news stories about car shopping and servicing. This new tool will further our ability, along with the consumer’s, to police the auto industry. There is no better way to read the pulse of the consumer, than having the consumer directly share their views and experiences.

Note: This new tool is still considered under BETA Testing, so please feel free to give us feedback – info@mydealerreport.com

What consumers are saying about us.

This lets us know that we are doing something right!  We are glad that our users love us.

This weeks comments: 

“MyDealerreport.com tells us about complete reports on dealerships, legal and lawsuits against dealerships. and ratings and comments.  The website gives the consumer and open opportunity to rate the dealership and tell of bad experiences and even good experiences, because I believe some dealerships should pay for what they do to innocent people who are taken advantage of.  And some dealerships deserve a good rating for the excellent services.  I believe that MyDealerreport.com gives honest, and upfront information that is greatly needed to the community.  MyDealerreport.com has a huge database that has every known dealership known in the United States, some have yet to be rated and others already have 1 or more ratings.  I also believe that MyDealerreport.com’s employees have good first hand knowledge in what is good, bad, illegal or legal.  The website also gives links such as car buying tips, car shopping, dealer ratings and reviews, leasing, false ads, car ads, bad credit, financing, etc.” 

                                         Julie Code

                                         Haslett, MI

 

“A GOOD SOURCE TO FIND INDEPENDENT INFORMATION WHEN CONSIDERING A PURCHASE.”

                                         Kevin Hartong

                                         Somerset, NJ

“Any or all individuals that purchase a vehicle anywhere get on and let the public know which are the dealers that have earned business from others and or the ones that need to learn how to do business again.”

                                            Luke Scadden

                                            Monticello, MN

Value and Trust Takes Time, Ask MySpace and YouTube.

You can not be everything to everybody and beware of the person who tries to be. Lately, we have found ourselves in an unique position. The “rating and review” arena is starting to become a highly desired frontier and especially for many larger corporations within the auto industry. We have been in discussion with multiple entities that desire to enter into this arena. While this is flattering, we must be cautious about potential partnerships. In a partnership each party must have respect your each others proposition of established trust and value within their industry.

When I think of the words trust and value I think about our slogan “Who do you trust? Know, before you go!”. I feel these two words are developed over a period time. MySpace and YouTube are great examples. They created a great following over time by developing value and trust among their users. One’s users will determine if you are trustworthy, not an ad campaign or a name. You can not buy trust and value, but as proven with the acquisition of MySpace and YouTube one can purchase a company who has earned it.

You must ask yourself something. Why did NewsCorp purchase MySpace? Why did Google purchase YouTube? NewsCorp and Google have well trusted established brands. However, value and trust is not always transferable. We have seen or heard of multiple entities who were well established in one field, only to be unsuccessfully entering another. I might trust Starbucks with making my vendi Carmel Macchiato with non-fat milk extra hot, but I would be apprehensive about them making donuts or bagels. However, I would not object to purchasing Krispy Kreme donuts at Starbucks. By doing so I would be receiving the best product(s) from two different entities through one well established channel. Now this would allow Starbucks to increase their value by sharing Krispy Kreme’s trust factor.

NewsCorp and Google were smart. Why should they go through the trust and value building stages, when they could acquire it? They could have purchased or developed a concept in a box, but the box would have been missing two important pieces, value and trust. It not a matter of development or technology, most concepts can be duplicated or cloned. But a concept’s value and trust can not be cloned.

Typically people comprehend the word trust, but the word value is so more abstract. I think value is created by the degree of difficulty to acquire something. But value also belongs to the eye of the beholder. This is the reason why two analyst will perceive a company’s value differently. One might appreciate the degree of difficulty to develop a concept, while the other dismisses it. Certain jewelry and art are more valuable than others, due to the perceived level of difficulty to discover or create them.

Let us look a MySpace and Youtube again. They developed great social networking communities, each in their respective areas. Along the way they had to test the waters and course correct. Their value was created through the development and somewhat perfecting of the system, their Know- How.

Therefore, everyday I examine ways MyDealerReport.com can increase its value and trust factor? I also examine how our partners are continuously adding to these areas? We appreciates every user that has deem us trustworthy and valueable. There we must continue to perfect the system, through healthy partnerships.

Website Issue Resolved

Late yesterday, Sunday Feb 25, 2007 to early afternoon Monday 26, 2007, we experienced some database issues. Our servers were just recently upgraded for higher speed capability, due to the demand on it. There were some key IP address issues, resulting in our databases in-connectivity to the user interface. However, all is well now. Hopefully, not too many of our users were affected. But if you have any feedback or concerns resulting for this brief unfortunate down time please contact us immediately, customerservice@mydealerreport.com.

Why I do, What I do…

I was invited to do a radio show interview this week about our website, MyDealerReport.com. The host of the show asked me why I create this website. Was it for the money? Was it because I need forgiveness for my car salesmen days? Well, money is always a motivator and forgiveness is always needed. However, I think my true reason for starting MyDealerReport.com stems from my first bad car buying experience.

It was the one of the most stressful experiences I encountered. I was only 17 years old, my grandfather was kind enough to co-sign for me a Mazda 323. This was my first car and I was truly excited, until we had to sue the dealership. The car broke down the very same day it was purchased. So we demanded that the dealership fix the car. They fixed it, 30 days later. Nevertheless, I was excited once again when I pickup the car, until a mile down the road where it broke down again. This time we told the dealer to give us our down payment back and take the car. Well, two years later after suing the dealership we received our down payment money back.

Everyday we receive tons of user comments that are very similar to my own personal experience. Now this tells me something important. It tells me that in 18 years nothing has changed in the auto industry. Consumers are still be defraud and abuse by dishonest auto dealerships. Now are all dealership bad, well according to our website No. But the real question is, how do you know who to trust? Well, now you see why my team and I had to create MyDealerReport.com, to help prevent others from experiencing the same car purchasing ordeal I did. I know what some people are thinking, “But you became a car salesman and dealership owner”. Well, my answer to that is, others now get to benefit from both of my experiences. First, as a victim and later as a ________ (Fill in the Blank). Furthermore, who better to help auto consumers than a victimized recovering car guy.