100,000 mile warranty versus money in the bank

broberts · 03-06-2009, 05:04 AM

I am contemplating a "bumper to bumper", 100,000 mile (10 year) warranty for my smart to supplement the 2 year 24,000 standard warranty. I am trying to compare that to putting that $1,800 in my home safe and using it ONLY for repair work on the car; OR putting it in the bank and letting it draw interest (?) and (again) using it only for repair work on the car or purchasing the warranty - $100.00 deductible. I have the self-discipline to use the money only for repair work.

I can not imagine a repair other than blown motor, air conditioning or transmission that would (by its self) come close to costing $1,800. One BIG factor is if it should break, Mercedes comes to me (I live 110 miles from the dealer) with a flatbed truck and takes it to the Mercedes hospital in Atlanta.

Your opinion would be appreciated.

Bill

**JPaul** · 03-06-2009, 05:10 AM

smart and/or MB do NOT offer extended warranties. Those are only private contracts and vary greatly as far as coverage is concerned. Be sure to read the fine prints... (towing distances, non-covered items, limitations, deductible, loaners, etc...)

lebikerboy · 03-06-2009, 05:50 AM

smart is offering extended warranties in Canada. They will probably do the same thing in the US however it won't be 10 years bumper to bumper...

chieftmc · 03-06-2009, 07:12 AM

Those are "Service Contracts" and NOT a manufacturer warranty !

There are NO "bumper to bumper" service contracts, read it carefully and make an informed decision

2micro4u · 03-06-2009, 07:51 AM

Hey Bill,
I would say get AAA Premium membership for $96 so you can have your car towed to the dealer if in the event you need to. With that plan you get 3 tows up to 100 miles. So you only pay 10 miles of towing vs 110.
As far as the extended warranty if you do have the discipline not to touch the money put it in a Cd or a account that can earn you interes then that would be the wises option. Then in the event something goes wrong you can just withdraw what you need.

*I got the extended warrany only because of how much I drive, how hard I drive and I know the chances of me not touching the money is slim to none.

broberts · 03-06-2009, 08:04 AM

A lot of great responses.

I am leaning toward keeping the money in reserve as opposed to the "warranty". Good advice about reading the fine print. I am aware that the warranty is a "vendor product" but I was encouraged (and more tempted) since it is purchased at the smart dealerhip.

Thanks for ALL the good advice.

Bill

SuperGeek · 03-06-2009, 06:12 PM

I paid about 1500 for a 5 year extended contract at the dealer. I much prefer to have a pro work on the car, and it really is about having the money on hand when it's needed. The extended warranty on my Explorer paid for itself in one month when the AC compressor died @45k, and half again with some other things @55k. In both cases I didn't have the cash and being without the vehicle would have cost me horribly. If you do turn down the extended coverage, be sure to keep that money reserved for 10 years and don't touch it. In 10 years the stock markets will triple and you could be in a great position if nothing breaks.

Butch · 03-06-2009, 07:43 PM

The dealer told me that the extended warranty (mechanical repair service contract) is backed by Mercedes-Benz Financial. Not to worry about the warranty administrator going belly up on the contract.

Godfather · 03-06-2009, 08:11 PM

Always wondered about one thing regarding this. If you buy your smart, buy the extended service contract, and total the car a month later, do they give you your money back, or pro rate it? Just curious.........

SuperGeek · 03-06-2009, 08:17 PM

Depends on the contract, and that's stated in some form within the contract itself. Usually you have 30 days to cancel and get a full refund. On a lot of the service contracts I've read, I can cancel 50% into it and get 50% of the premiums back. But some, you're just SOL.

Totaling a car doesn't automatically cancel a contract for warranty, service, or even the loan. FYI - If you ever total your car, you still have to make payments until the insurance company settles and the entire loan amount is paid off. A friend of mine got burned when he assumed the insurance company would have everything magically fixed in a week. They didn't, and he spent 2 months clearing up details on his credit report.