Saturday, April 04, 2020 Detailed Auto Topics
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Con-men work by making the mark think they are getting a good deal

Con artist often use an enduring method to make the person being taken think they are getting a great deal. Something in human nature tends to make people abandon caution when they think they are going to gain. This is the basis of many classic cons and I believe the basis of extended warranties.

New car dealerships tenaciously push extended warranties. With new-vehicle sales margins down they stand to gain a lot by selling extended warranties. How much; maybe up to $800.00 and more on some policies. The vehicle owner that pays the tab will normally gain a lot less.

Extended warranties are not actually warranties at all. Extended warranties are more like a decreasing value, term-insurance policy. The insurance company has your money and you hope they will pay some back if there is a problem. Unfortunately the less they pay back the more they keep; and they are professionals at holding onto money.

Consumer advocates like Consumer Reports and consumeraffairs.com constantly warn people be very careful when looking to buy extended warranties. Unfortunately warranty companies have a LOT more money to promote their policies than the average consumer agency has to warn people.

A far better plan is to put the amout you would spend on an extened warranty into an investment account and follow good maintenance on the vehicle. With good maintenance and care the odds of an expensive problem that might be covered by the extended warranty are very low. The other benefit is when the period that would have been covered is over you will likely have most of your money.

 

 Extended warranty companies make lots of money. The money comes from people paying more in than the company pays out. If it were a good deal for you they would not push it.

 Extended warranties are notorious for denying claims. They have your money and if they say no there is little you can do.

 A defective vehicle component will normally fail well within the manufacturer’s warranty. With good maintenance there is very little chance of a problem.

 Extended warranties are vastly over-priced for the actual coverage. This is why they are so actively pushed. They are very profitable for the extended warranty company.

 If the warranty company goes out of business you lose your money. The company could be little more than a back-room operation with a telephone.

When a warranty is being pushed, watch for the hookYou will win when you control your money. Warranty companies push their policies because they know you will lose.  The odds are greatly stacked in their favor.

Save money by buying a quality vehicle and maintaining it. This way you can keep your money and avoid being hooked.

For more ideas on overall lowest cost of driving an automobile, come to AGCO. AGCO is the place to go!





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