The pro and cons….should you buy it?

Greetings from the Hemet Car Guy,

You ask, “Should I buy an extended warranty on a car purchase”?

Actually only the manufacture can offer a warranty, however, there are many choices to purchase an “Extended Service Agreement” aka SVC.

Pros:

With an extended SVC, that provides the proper coverage, you are basically insured against all sorts of nasties that could wrack up thousands of dollars in repairs. In the long term, this can save you more money than if you pay out of pocket for those repairs.

The peace of mind you get from knowing that you are guarded against that rainy day should not be underestimated. It is human nature to believe that the long shot of bad luck will never happen. Unfortunately, it is almost inevitable that it eventually does happen down the road. An extended SVC covers that long shot for an additional period of time, hopefully until you are done with the car. No one likes nasty surprises.

Extended SVC’s make very decent bargaining chips at the table if you decide to sell the car. Of course, the SVC has to be transferable; it is something you should take into consideration when you purchase the extended SVC in the first place.

The perks that come along with some SVC’s are icing on the cake like covered rental car, towing and discounted maintenance.

Cons:

If your car does not break down during the period or duration of the extended SVC, your money is wasted. Extended SVC’s are a lucrative business for companies selling them.

This suggests that ultimately they pay out a lot less in repairs than they take in. Extended SVC’s cover additional time/miles where breakdowns are more likely to occur, and are proportionately more expensive because of it.

That said, companies still feel extended SVC’s are a profitable business or they would not keep offering them. This tells you something about the odds.

There’s also a bit more hassle at the contract table, trying to figure out what every last word in the contract means and just how deep your coverage will be and how much you will have to pay if you sign the dotted line. No doubt, there are plenty of warranty companies who deliberately word contracts to leave loopholes the size of barnyards for them to wriggle through. Be sure to double check a company’s reputation at the Better Business Bureau or Consumer Reports for comments and ratings from other consumers.

Also, keep in mind not only who backs the Extended warranty,  but also the dealership selling them. The dealership is the customer of the extended SVC: the dealer can at times call the SVC to get an exception for their customer when there is a shade of gray.

Here is a big tip. In many cases the longer the policy the lower the cost per year. For example, they may offer a 2 year/24,000 mile SVC for $1995.00 and a 5 year 100,000 for $2,300.00.  The second is a much better deal, especially if it can be cancelled at any time and prorated for a refund.

Don’t be afraid to ask questions and also keep in mind that, by law, you have a right to a full refund within 30 days after you buy it.

Hope this helps.

Good Driving,

The Hemet Car Guy

For more information go to www.hemetcarguy.info

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Greetings from the Hemet Car Guy, recently our friends Bill and Aida Nowark came to us knowing that we buy vehicles they wanted us to buy their 1999 Dodge passenger van, needing paint and transmission work among other things. Bill and Aida have used the van for their home assisted living Business in Quail Valley, they knew they wouldn’t get much for it, but they needed the space. 

At the same time, I’ve been listening to the radio station 102.5 the Vine, and “Doc” on the radio has been talking about Pastor Hawkins from “Divine Appointment Worship Center” has been taking underprivileged kids to Stadium Pizza in San Jacinto for a Pizza Party and then to a Lake Elsinore Storm Baseball Game. A great collaboration of a church, Business, nonprofit Radio Station, and Baseball team all for a worthy cause.

In speaking with Pastor Hawkins, he was hoping to one day have a vehicle large enough to take all the kids in 1 vehicle as he and his wife (pastor) Nicole has been packing them in their two cars.

Prayers were answered! As the Nowarks decided to donate their 11 passenger van.

This was a win/win for everybody involved.

As with this and other nonprofits and Charities like “Cops 4 Kids and Communities,” I was fortunate to introduce and assist in completing the process in helping them.

DMV.org offers good advice on this relating to the Pros and Cons to Donating and Selling a Car.

For some, donating used cars is more appealing than slapping a “car for sale” sign in the window.

What are the pros and cons when you donate a car to charity? Would selling your car be a better move?

Donating a Used Car: Pros

•Car donation helps people in need. Donating your car to charity will help a cause you believe in, and also give you a sense of personal satisfaction. You’ll help make the world a better place to live.

•You’re getting rid of something you don’t want. A broken-down car might cost more to repair than it’s worth, or it may have little-to-no trade-in value. A more valuable vehicle might require too much time and money to keep. Also remember that, as long as you own the car, you’ll pay extra taxes on it and incur other expenses.

•Generally, donations are tax-deductible. You can deduct the fair market value of the car if the charity gives the vehicle away or uses it for charitable purposes. If the charity sells the car, you can deduct the amount and get a break on your taxes. Check with the IRS for more details.

Donating a Used Car: Cons

•Car donations bring no money. Auto sales put some cash in your pocket. Donating it won’t. You need to decide if that’s all right, particularly if you plan to buy another car to replace the old one.

•You can’t avoid paperwork. Donating your vehicle doesn’t mean you drop it off somewhere and never think about it again. It’s still your responsibility to transfer the title and provide accurate information about the car (like the odometer reading). You also need to know the fair market value of the vehicle and file the appropriate forms with the IRS come tax time.

•Some charities are scams. If you don’t carefully research the charity to which you’re giving the car, you might find yourself donating your vehicle to crooks. That will become a problem if you try to deduct the fair market value of the car on your tax returns, and it may result in your being flagged for an audit.

That’s why it’s best to get referrals before you go with your Heart.

Hope This Helps 

Richard Perry

The Hemet Car Guy”

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