In December 2016, I bought a 2015 Vary Rover Sport with 10,800 miles. On the time, I had been driving a Honda Match however sought a bigger car as my spouse was anticipating in early 2017.
Through the buy, the choice to accumulate an prolonged automotive guarantee was offered, providing protection for seven years or as much as 100,000 miles, whichever got here first. The price for the prolonged guarantee with out a deductible was $4,500, whereas choosing a $1,000 deductible lowered the price to $2,500.
I selected to not spend money on the prolonged automotive guarantee because the car had solely accrued 10,800 miles and was nonetheless beneath the unique producer’s guarantee, offering protection for 4 years or as much as 50,000 miles till July 2019. Now that the automotive will likely be 9 years previous in July 2024, let’s overview the upkeep prices incurred.
The Vary Rover Sport serves as an excellent case examine, significantly as a consequence of Land Rover’s constantly low reliability scores. Given these scores, an prolonged guarantee would probably maintain extra worth in mild of the model’s historic reliability challenges.
How A lot I Spent Sustaining My Used Vary Rover Sport
In late 2019, I incurred a $700 expense to switch my fan, an unlucky value that stemmed from a delicate clicking sound I had observed simply earlier than the unique guarantee expired. It took a number of months for the click to accentuate, prompting me to have the automotive inspected. This was my first out-of-pocket automotive expense.
In June 2023, I confronted one other restore, spending $1,200 to switch a leaking water pump. The service additionally concerned a flush of my coolant system. Notably, water pump points are a prevalent concern for European automobiles.
An important takeaway from this expertise is the significance of utilizing the right sort of coolant throughout alternative. It is important to decide on both the orange or inexperienced coolant and keep away from mixing the 2, as their mixture triggers a chemical response resulting in coolant congealing.
On January 11, 2024, I needed to spend $1,050 to switch my vacuum pump and a PCV valve after my test engine mild got here on. Initially planning for a routine $212 oil change (was $140 final yr!), this surprising expense was disappointing. However it’s important to incorporate it for a extra correct and balanced illustration of current automotive upkeep prices.
Whole upkeep bills, excluding oil modifications, tires, and breaks: $2,950. $2,950 is after seven years and two months of possession. The automotive has about 50,000 miles.
Affordable Upkeep Bills
To me $2,950 in upkeep bills appears fairly cheap after such a time period and 40,000 miles. After changing the water pump, vacuum pump, and PCV worth, these ought to hopefully maintain up for an additional 40,000 – 50,000 miles.
There’s additionally an excellent probability this may very well be the final of my upkeep bills for at the very least two years, bringing the potential 10-year upkeep value to $2,950. Or, this may very well be the beginning of much more upkeep bills to return. Let’s hope it is the previous.
If I had been to incorporate the price of altering tires, brake pads, brake rotors, and oil since possession, I would like so as to add one other ~$3,800.
Evaluating Upkeep Price To Prolonged Guarantee Price
$2,950 in upkeep value is cheaper than a $4,500 guarantee value with $0 deductible.
$2,950 in upkeep value can be cheaper than the $2,500 warrant value with a $1,000 deductible.
The essential level is that each prolonged warranties would have expired on the seven-year mark, in July 2022. There might need been a possibility to deal with the water pump situation, because it occurred in June 2022. Nevertheless, the alternative of the vacuum pump and PCV valve for $1,050 occurred in January 2024.
In less complicated phrases, if I had opted for the no-deductible guarantee, I might have paid $4,500 plus $1,050, totaling $5,550 in upkeep and guarantee prices. Alternatively, with the $1,000 deductible guarantee, the bills would come with $2,500, $700 for the fan, $1,000 deductible for the water pump, and $1,050 for the vacuum pump, amounting to a complete of $5,250.
Inconvenience Issue Of Fixing The Automobile At The Supplier
The choice to not go for the prolonged guarantee additionally stems from the inconvenience related to having the automotive repaired on the Land Rover vendor. The restore store shouldn’t be in shut proximity to my residence, making it impractical for me. If I had been to take the automotive to the Land Rover vendor, I would must depend on Uber for transportation to and from the store.
I want the extra handy possibility of getting my automotive repaired at a extra reasonably priced non-Land Rover vendor that occurs to be inside strolling distance from my residence. That is exactly what I did for my final two repairs.
I dropped off my automotive on the restore store after driving my son to high school, then walked the mile again residence. When it was time to retrieve the automotive, I walked to the restore store and picked up my son from faculty. This not solely resulted in important time financial savings but additionally allowed me to keep away from the extra expense of utilizing Uber.
Get The Prolonged Guarantee Or No?
Based mostly on my 20-year expertise proudly owning two used Land Rovers (LR3 and RRS), I’ve concluded that buying an prolonged guarantee shouldn’t be the optimum monetary resolution. A more practical strategy entails conducting a radical inspection earlier than shopping for the automotive and securing an reasonably priced and dependable mechanic.
Whereas the peace of thoughts offered by an prolonged guarantee is efficacious, particularly in main incidents like an engine failure, such occurrences are comparatively uncommon. Nearly all of points are sometimes related to regular put on and tear, which may be adequately budgeted for.
For people, like myself, preferring to maintain their automobiles for 10 years or extra, an prolonged guarantee may appear interesting. Nevertheless, prolonged warranties hardly ever lengthen past 10 years. The finance consultants within the prolonged guarantee division have calculated the optimum length and mileage to cowl the automotive whereas maximizing income.
Subsequently, I might forego an prolonged guarantee.
The doubtless worst-case situation is breaking even and paying out of pocket what the prolonged guarantee would have value. Extra doubtless, you’ll find yourself spending much less on out-of-pocket upkeep than the price of the prolonged guarantee. That mentioned, a minority of individuals will get unfortunate and find yourself paying far more out of pocket than in the event that they obtained the prolonged guarantee.
Bear in mind, the automotive sellers are providing prolonged warranties as a result of they’re worthwhile. In the event that they weren’t worthwhile, they would not supply them or they’d cost a worth excessive sufficient to make them worthwhile.
When To Promote The Automobile
As my automotive approaches its ninth yr in 2024, the concept of buying one other car inside the subsequent three years is changing into more and more interesting. I am primarily seeking to drive a protected and enjoyable automotive to move my household round.
Nevertheless, now that I’ve spent one other $1,050 on upkeep, these components ought to final one other 30,000+ miles at the very least. With my common driving distance of about 6,000 miles a yr, my automotive ought to final for an additional 5 years with none main upkeep bills. Nevertheless, as identified by my auto mechanic, put on and tear on a automotive shouldn’t be solely decided by mileage however can be influenced by time.
Contemplating these elements, my plan is prone to contain buying a brand new automotive in 2027, when my present car reaches 12 years previous. This resolution permits me to take advantage of the cash spent on repairs in 2023 and 2024 for an extra three years. Furthermore, the purpose is to promote the automotive earlier than dealing with one other substantial expense exceeding $1,000.
It is time to begin saving up in my automotive fund! After I purchase a brand new one, I am going to absolutely comply with my 1/tenth rule to attenuate monetary stress. I hope you do too.
Reader Questions
Do you suppose an prolonged automotive guarantee is price it? If that’s the case, what sort of protection did you get and the way a lot did it value? Has your prolonged guarantee ever coated something extraordinarily costly?
Pay attention and subscribe to The Monetary Samurai podcast on Apple or Spotify. I interview consultants of their respective fields and talk about a number of the most attention-grabbing matters on this web site. Please share, fee, and overview!
For extra nuanced private finance content material, be part of 60,000+ others and join the free Monetary Samurai e-newsletter and posts by way of e-mail. Monetary Samurai is without doubt one of the largest independently-owned private finance websites that began in 2009.