Is extended warranty worth the cost?

Hello,

We just bought a new 2016 Winnebago Vista 31BE (our first class A!) and the Camping World dealer we purchased it from is trying to sell us a Good Sams 7 year extended warranty. Supposedly it covers everything for the next 7 years with a $50 deductible per visit, but the cost is $4400. I generally shy away from extended warranties, but knowing how motorhomes tend to be a little more finicky than other vehicles, my wife and I are wondering if it would make sense to purchase this warranty. Any thoughts on this would be appreciated.

I'm surprised that you're considering an extended warranty on a new RV.  You're, no doubt, covered by Winnebago's warranty for at least the first year, plus all the appliances and other major subsystems are covered by their own manufacturers' warranties.  Essentially, you're paying GS a lot of money that they can earn interest for more than a year when they know there will be no payout.

As for extended warranties in general, they give you peace of mind in exchange for a known fixed cost.  You have to be the ones to decide which approach is best for you.  We purchased an older MH and didn't get what would have been a very expensive warranty.  In our case the costs were probably a break-even but we were able to upgrade and change things as we made necessary repairs.  For us, that gave us more flexibility than a warranty would have provided.

Welcome to the Winnebago family!  You made a great choice and congratulations on your purchase.  Extended "warranties" are basically insurance - some extended "warranties" are inclusionary (only certain things are covered) and some are exclusionary (many things are excluded.)  This insurance is a major profit center for the dealer - they are probably going to receive 50% or more of your payment in clear profit.

You are far better off taking that $4400 and setting it aside for future maintenance.  Now if you had a diesel pusher, that could weight the decision a little bit, but a gas rig - no way.

Keep in mind the objective of the "warranty" underwriters is to avoid paying out claims and any work performed must be pre-approved before work begins.  You could be stuck for a day or three waiting on approval.  This reminds me of a quip about life insurance - the underwriter is gambling that you are going to live and you are betting you are going to die. 

If you want to look at one that pretty much covers nothing, look at the one from Camping World.  I almost fell for it to the tune of $2800 on my used TT. 

Thanks to this Forum, I am $2800 richer and the few minor things that I had to fix myself, weren't covered by the extended warrant that I was  being high pressured into buying on my TT.

Pretty sure they have enough wiggle room to not pay for much...

There are no "right" or "wrong" answers to your question... only opinions as to everyone's individual comfort level and finances. One thing to be aware of is, extended warranties do not cover all the things that factory warranties cover. I feel very much the same as John about them - I'd consider getting an extended warranty for a diesel pusher, but not for a gasser.

I'd also recommend that you not buy one for the little things that might go wrong - especially if you're the least bit handy and can fix them yourself. You learn a lot about your RV when you repair minor issues yourself, and it can be a real PITA to take your RV in everytime something minor breaks.

For what it's worth, we did not buy one when we bought our two previous gas motorhomes. They were each 1 year old when we bought them and I was pretty comfortable working on their engines. However, we did buy one when we bought our current diesel pusher. It was 1&1/2 years old, and it was the 1st diesel vehicle I'd ever owned.

Even though the Cummins/Allison combo is about as bullet proof as they come, I just didn't have that same comfort level working on the drive-train. If there were a catastrophic failure (which I admit is highly unlikely), it could cost upwards of $30,000. That's the sole reason we bought one. FWIW

Kev

John Canfield said:

You are far better off taking that $4400 and setting it aside for future maintenance.

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This, exactly.  If you actually have that much cash, set it aside for any RV emergencies or unexpected breakdowns or repairs that are needed.  It WILL happen eventually if you RV for long enough.    And as mentioned, RV ownership requires some amount of tinkering and you'll learn to handle a lot of small stuff yourself.  Just like you do around your house when something minor breaks and does not need a professional to repair.

Thanks for the responses. I was already leaning towards not getting the extended warranty (especially for $4400) but wanted to make sure I wasn't missing something. We'll be passing on this added expense and save our money for later use. They sure do have a way of making it sound like a good deal, but I guess part of their job is to try and sell you as much as they can.

cliftonda said:

They sure do have a way of making it sound like a good deal, but I guess part of their job is to try and sell you as much as they can.

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... as does every dealer.  Their goal is profit, and extended warranties often result in a very high profit margin for them.  Even if you do use the warranty later on (and there would be ALL kinds of fine print that restrict many uses), that is being handled through some other insurance company.  Camping World gets a hefty commission for selling the policies.

Well, some folks self-insure, by setting aside xx amount of money monthly. When we bought a used MH we bought an extended service contract (they are NOT a warranty). It cost $4,000 for 3 years on a 13 yr old MH. To date it has paid out almost $4,000, and it expires April 30, so I'm about break-even. I just received an application for renewal from GS. If I renew my contract they will cover it to 18 years old, so I will, given the odds of something major breaking. I wil highly recommend adding the gaskets and seals rider to the contract, otherwise if a gasket or seal fails, causing catastrophic failure you are not covered because the failure was consequential damage of the gasket or seal failing.
We have a Good Sam extended service contract. They have fulfilled their obligations to the letter. I called them one time for a claim because the mobile RV service will not mess with these contracts. I was told to pay the bill then file a claim and they would pay what the contract covers.
Now, you are buying a new MH with a 1 yr warranty. I would not buy from the dealer now. I would wait until the 11th month to buy an extended service contract. It will be less money for at least 2 reasons; you"ll be buying from a broker probably, but there are a few that sell direct to the customer; #2- you'll have time to shop around for a contract that fits your preferences.
Back to the self-insurers; I know of one couple who traded for a newer MH that had previously had engine repairs. It dropped the valves in the same cylinders. Yes they were self-insured, BUT they had not saved up the $33,000 it cost to repair the ISX engine. That put a crimp in their lifestyle.
I did not/will not attempt to sway you either direction, just stating the facts.

Ray said:

Well, some folks self-insure, by setting aside xx amount of money monthly. When we bought a used MH we bought an extended service contract (they are NOT a warranty). It cost $4,000 for 3 years on a 13 yr old MH. To date it has paid out almost $4,000, and it expires April 30, so I'm about break-even.

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You just illustrated why the cash "self-insuring" process works well.    Breaking even is perhaps the same as never needing to buy it in the first place.  Cash can go a lot further too, because most folks will do whatever they can to keep from spending it.  When a person has prepaid for a warranty (or service contract) you may be more likely to make claims, in order to try and break even and make yourself feel better about the purchase.    Deductibles, percentages, and loopholes can often leave contract-holders paying money out of pocket along the way too.  Very rarely does extended coverage pay for 100% of all costs associated with every claim.

Just in case you're keeping score, I'll add my experience.

I've never been a person to buy an extended warranty, and I've never been sorry I didn't, but we got talked into one on our very slightly used 2013 Winnebago, and I'm glad now that we did. The premium was rolled into the payment, and I would not have had enough saved up to fix what I've needed them for, so far.

Of course, I'm FT; plus I imagine you have to vet the warranty company carefully (mine is with United States Warranty Company). My first (disappointing) experience with them was when it took my mobile tech 2 hours--plus charges to and from my rig--to find a household wiring problem. Not covered, but that's because the entire cost was diagnostic labor.

Second thing that happened was that my awning motor died (conveniently, in a wind storm). My I-don't-know-what-I'd-do-without-him mobile tech looked it up before I even had time to get to a computer and discovered there was a chance that it was a recalled motor. That happened to be the case, and even though it wasn't recalled for the issue I had, Dometic (bless them) replaced it and paid for the labor.

If it hadn't been recalled, that would have been about a $500 repair altogether, and the warranty would have covered it all.

While the tech was replacing the motor, I asked him to look at one of my front power jacks, which appeared to be leaking. Cost: almost a grand, plus installation. (The old one has to be cut off and the new one welded on.)

Here was the United States Warranty Company's adjuster's response when I called in the claim: "Okay." No BS, no song and dance; not even any questions about how it might have happened (who knows?). He arranged to have one shipped to my repair shop (got there in 3 days) and will pay the labor cost to install.

IF I were a grease monkey, and IF I weren't living in here and had to move a minimum of every 3 weeks, then a warranty would likely not be a wise investment. But in my situation, I feel very relieved that I have it.

I've surmised that if the insurance companies weren't making big money by offering RV warranty insurance then they wouldn't offer it...

Like others have said, it's a gamble but IMHO the odds are in my favor by NOT getting a warranty...

One thing you can be sure of: that policy does NOT cover "everything" like that salesman claims. Far from it. You would not be buying a continuation of the manufacturers bumper-to-bumper warranty. Just to give a few examples of things NOT covered: the RV body, interior furnishings, and flooring. The these policies have a lengthy list of items and types of things that are excluded.

I make all insurance decisions the same way (and this is an insurance). If I could afford to make the repair/cover the loss, I don't buy insurance. If I can't then I buy it! Therefore I have liability insurance on vehicles, but usually not collision or comprehensive.  I certainly don't buy extended warrantees. Note that this is not a simple "do I have the money?" decision, but "will I be comfortable after I absorb the cost myself?".

You really need to make that evaluation yourself and insure or not based on the result.

Ernie

Like other posts have mentioned -  you have a new coach and a warranty for the first year.  You can purchase the extended warranty in year 2 if you feel it will be required.  I purchased the warranty on a 2011 DP, but have the highest deductible offered.  Significantly lowers the extended plan cost.  I use it like catastrophic coverage.  I put aside other money to cover repairs should the need arise. 

You have been given great advice regarding the value of having an extended warranty.  Generally speaking they are stacked in favor of the insurance company so your more likely to pay more for the premium than in actual repairs.  There are of course the occasional horror stories where an extended warranty might pay for itself, but those are few and far between.  Still there are some who feel warm and fuzzy having a policy and for those I would say wait until the Mfg warranty is due to expire and negotiate heavily because the dealers typically inflate the premium price significantly. The $4000.00 premium you were quoted can probably be had for under $2K.  As an example when I bought my ruck recently, the salesman of course offered an extended warranty at if I recall correctly around $2,800, which I declined and indicated I was not interested in an extended warranty the price quickly came down as I kept insisting I did not want a policy.  Had I wanted the policy I could have gotten it somewhere around 1K.

I bought a car not too long ago. I was going to decline the offer for an extended warranty, but when I was told that I would have the bank interest lowered by about two points, I went with it. If you will be paying a bank, you might ask if this same thing might apply to your loan.

Gizmo said:

You have been given great advice regarding the value of having an extended warranty.  Generally speaking they are stacked in favor of the insurance company so your more likely to pay more for the premium than in actual repairs.  There are of course the occasional horror stories where an extended warranty might pay for itself, but those are few and far between.

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You have been given some excellent advice. If you are not comfortable without a warranty after the manufacturers warranty runs out, you can always purchase one at that time. Understand that you have a lot of negotiating room on these types of policies. I happen to be one of the "Horror Stories" and am glad that my DW convinced me when we purchased a 10 year old DP. So far the "Insurance Company" has paid out $10,540 on one major and several minor repairs.

Gizmo said:

There are of course the occasional horror stories where an extended warranty might pay for itself, but those are few and far between. 

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Although I'm not a fan of extended warranties for vehicles, I have bought them occasionally.  I can honestly say that three times in my ~40+ years of car buying I have bet correctly and those policies more than paid for themselves.  In fact one of the policies paid so much (to replace an engine) that I can buy warranties for the rest of my life knowing that I'll always be in the black when I sum the totals.

The chance of having successfully picked the correct vehicles to have bought warranties on was, I admit a fluke.  The engine replacement was on what should have been a bulletproof Chevy 350 CID V-8 (very long story) and one that had an automatic transmission replacement was a Honda.  Not likely choices of things which might need warranties which is why buying these policies is a crapshoot. It's the luck of the draw as to when you will really need one.

We've had several RV's over the years and never had an extended warranty, until we decided to go full time.  Insurance is about the odds, and overall the odds favor the insurer. However, I believe the odds for using the RV full time, lean more in favor of the insured.  We purchased the extended coverage and have used it to our advantage. Approvals were made on the spot and waiting was never an issue.  One time we waited two days for parts, but approval was immediate. New awning motor, new convection/microwave.  New grey water dump valves (2), replaced hot water heater electric thermostat. We are slightly ahead at this point with a little over a year left on the policy.. If your use is occasional, I would pass.  If full time, or extended use, odds are on your side.  It's still gambling, but odds swing more your way as usage increases.