Extended Warranty: smart vs Warranty Direct

[propes]

I drive my car a lot. My last car racked up 90,000 miles in four years and I don't expect my white/silver/red fortwo to be any different.

So here's my price breakdown for a 75,000 mile warranty with $100 deductable:
smart: $1,195
Warranty Direct "major care": $1,111
Warranty Direct's bumper-to-bumper: $1,338

A 100,000 mile warranty breaks down thusly:
smart: $1,595
Warranty Direct "major care": $1,296
Warranty Direct's bumper-to-bumper: $1,864

I know a bunch of you have used Warranty Direct; I'm wondering what the differences are between smart's warranty and Warranty Direct's "major care". Any help you all can provide?

[Westfield 11]

The biggest difference is that as long as there is a smart car company, the smart extended warranty will be honored. What is the financial situation of Warranty Direct? Are they fully capitalised and will they be able to continue in this down market? Remember that with fewer cars being sold there are even fewer people buying their warranty. They may be like some other independent warranty companies and use the money from new subscribers to pay claims from existing subscribers, sort of like a legal Ponzi scheme, or maybe not so legal. Can you be sure that this company will still be in business 100k miles from now? You can be pretty sure smart will still be here.

[NCC1701]

I don't know, but am glad propes asked the question, because I've been wondering too. And, I have a question to add. I live about 300 miles from a dealer. Naturally, smart warranty work must be performed at that distant dealer.

I'm thinking a second party warranty, such as Warranty Direct, will bypass this 'problem' and allow any qualified mechanic to work on the car. If this is true, my choice is obvious. Am I wrong?

I'll be watching this thread, to see what y'all think about Warranty Direct in particular. And, sorry propes.

[NJREDZ06]

Originally Posted by Westfield 11

The biggest difference is that as long as there is a smart car company, the smart extended warranty will be honored. What is the financial situation of Warranty Direct? Are they fully capitalised and will they be able to continue in this down market? Remember that with fewer cars being sold there are even fewer people buying their warranty. They may be like some other independent warranty companies and use the money from new subscribers to pay claims from existing subscribers, sort of like a legal Ponzi scheme, or maybe not so legal. Can you be sure that this company will still be in business 100k miles from now? You can be pretty sure smart will still be here.

As far as I know Smart doesn't have extended warranties. Their warranty is 2yrs 24k miles. My Smart center offered me a GE Extended warranty for anything beyond the factory 2yr/24k

[buellwinkle]

I got a Smart extended warranty for 2 additional years, think it was $600 or so. Dealers can sometimes make higher profits with 3rd party warranty companies so they push those. Personally I rarely buy extended warranties but felt the Smart one was justified since the original warranty was only 2 years and parts may not be readily available to independant shops so I'm at the mercy of a dealer's service department that overinflates part prices and has been outright dishonest with me in the past.

In contrast, I don't need an extended warranty for my MB because parts are readily available from salvage yards, OEM and discounting dealers and there are many independant mechanics so I'm not bound to the dealer like I am with Smart.

Also, don't mistake a factory extended warranty as being run by the factory. For example, I have a GMAC extended warrany for my GMC Canyon and it is not administered by GM or even GMAC, it says the company name in the contract and I would bet the Smart factory extended warranty is not run by Smart USA. As for Warranties Direct, who knows how solvent or good they are, they are not treated like the insurance companies they are like so nobody really monitors them. I know if I have a problem that the warranty company does not want to cover, I can escalate it to the Smart dealer or Smart HQ, with a 3rd party agreement, your only option is court.

[Wdhitch]

Originally Posted by NCC1701

I don't know, but am glad propes asked the question, because I've been wondering too. And, I have a question to add. I live about 300 miles from a dealer. Naturally, smart warranty work must be performed at that distant dealer.

I'm thinking a second party warranty, such as Warranty Direct, will bypass this 'problem' and allow any qualified mechanic to work on the car. If this is true, my choice is obvious. Am I wrong?

I'll be watching this thread, to see what y'all think about Warranty Direct in particular. And, sorry propes.

Honest question... can't you get your service done at the Ft. Walton Mercedes dealership? It's only 62 miles from PCB.

[jediknight36]

Aren't we having a similar duscuesion on another thread? One difference is you probably can't finance the Warenty Direct one. I might hold out till we find out about this...

[jsenka]

For what it's worth,
I purchased a bumper-to-bumper warranty from a company called "Warranty Gold" back in 99. It was a pretty highly regarded company. If I paid up front, they would throw in the zero-deductible feature, which I did.
After a couple of years, guess what? Warranty Gold went into Chapter 11. Their story line was that they themselves were solvent, but the financial institution that backed their warranty plans went bust. Bottom line was I never had a claim and I never got a refund. Luckily, my car didn't require any major repairs while I had it, although the A/C evaporator went bad and that would have been covered. I just sold the car instead of having it fixed.
May have still had that car if I wouldn't have had to pay for the A/C repair!

[rawlus®]

Originally Posted by jsenka

For what it's worth,
I purchased a bumper-to-bumper warranty from a company called "Warranty Gold" back in 99. It was a pretty highly regarded company. If I paid up front, they would throw in the zero-deductible feature, which I did.
After a couple of years, guess what? Warranty Gold went into Chapter 11. Their story line was that they themselves were solvent, but the financial institution that backed their warranty plans went bust. Bottom line was I never had a claim and I never got a refund. Luckily, my car didn't require any major repairs while I had it, although the A/C evaporator went bad and that would have been covered. I just sold the car instead of having it fixed.
May have still had that car if I wouldn't have had to pay for the A/C repair!

this theme is all too common IMHO.

[jsenka]

Yeah,
This doesn't mean that all warranty providers are that way, but the purchaser has absolutely zero recourse if the provider or their financial backers fail.