Maintenance Contract

[bdunc]

We are purchasing our first RV, a class A motorhome.  The dealer of course is recommending a 5 year service contract.  The cost is about 7% of the selling price.  Is this worth it?  Would you recommend purchasing one?

[Optimistic Paranoid]

Not just no, but HELL NO!

These are high profit items for the dealers who sell them.  So no wonder that they push them.

See this article by Consumer Reports:

Don't Buy Extended Warranties

[Barbaraok]

We set aside a maintenance fund with 10% of the purchase price and add to it every month.   Extended warranties will only cover when something breaks.   We have been able to find some things that are worn but haven't broken yet, replace them on our schedule, or if something breaks, not only do we replace what is broken, but if there is a second one, replace that also if it is worn.    The set aside also includes amounts for batteries and tires that need to be replaced every few years.   

[richfaa]

At 7% of the purchase price it is not a good deal. We do have extended warranties on our Rv and truck.BTW on the RV they are not extended warranties they are service contracts that cover items identified in the contract. We use cornerstone  Rv warranties.We do not buy from a dealer.

We have had them on both our  5th wheels since 2006  and they have covered big $$$ repairs with no problems. We also put aside a amount every month to cover items like tires, etc..

Do your homework on extended warranties  read them carefully and understand what is covered and the terms of the contract.The exclusionary contract is preferred as it clearly states what is NOT covered.  Then make a decision that meets your needs.

Should you  need service all it takes is a phone call to the service contract  company for prior approval as stated in the contract.

 

The service contract is not for everyone but make your own decision. 

[Kirk W]

First of all, welcome to the Escapee forums!

Your question is one that always gets a lot of very strong answers but I suggest that you weigh the question carefully. It should be made as a business decision and a business will only insure against issues that it can't afford to pay for from existing funds. Let me suggest that you read this article about such contracts before you make your decision. If you have the financial ability and the self-discipline to do as Barb suggests, that is a much better way to go but you do need to be sure to keep adding to the fund to be secure. Keep in mind that if you buy from the dealer and roll that cost into your payments, you will actually be paying significantly more for it than to go outside to one of the other vendors and pay it all up front. 

[Twotoes]

There are many extended warranties/service contracts available from multiple sources so if you decide to purchase one do some shopping around before you buy. The Dealers offer may be the best or worse. There are two types of contracts, ones that cover everything unless it is listed as excluded, and ones that list what is covered and everything else in not covered. The best is one that covers everything unless it is excluded.

The decision to purchase a contract depends how handy you are at fixing things and how much funds you can set aside for future repairs. If you have a fifth wheel or a towable trailer your repairs may be less than if you have a Class A Diesel motor and transmission which will be more expensive to repair. Also if you are buying a new RV while the RV manufactures warranty may be only one year, the components (water pump, microwave, stovetop, inverter, refer etc.) will come with a manufactures warranty (usually two years).

[bdunc]

Thank you everyone.  I will go the route of setting aside the money to use for future repairs and maybe take another look when the manufacturers warranty expires.  

[stripit]

I just needed some repairs to the motorhome. Called a dealer near me, they asked is it a warranty repair? if so, we can schedule you in 4 weeks. I said no, customer pay. She said I have an opening on Monday, three days away. They got me in and out in one day.  They really are not too excited about dealing with warranty companies to try and get paid.

[Ray,IN]

On 8/21/2018 at 8:45 PM, bdunc said:

Thank you everyone.  I will go the route of setting aside the money to use for future repairs and maybe take another look when the manufacturers warranty expires.  

I would do the same in your situation. We bought MH in my signature in 2013, and an extended service contract. During the 3 year period it paid back the entire purchase cost. We reasoned, since the MH had been in storage 8 years, things would fail.

That said, never buy an ESC with an included items contract, buy an exclusionary contract which states what is NOT covered, by omission everything else IS covered. ( can you name every item in your chassis or body?) Buy the gaskets and seals rider, otherwise if a gasket/seal fails allowing the component to run dry of oil or water and ruin, the component is not covered = consequential damage from the not-covered failed seal/gasket.

[FL-JOE]

On ‎8‎/‎21‎/‎2018 at 10:53 AM, bdunc said:

We are purchasing our first RV, a class A motorhome.  The dealer of course is recommending a 5 year service contract.  The cost is about 7% of the selling price.  Is this worth it?  Would you recommend purchasing one?

This is almost like asking folks if it is a good idea to take a vitamin every day.  Some people think they are a rip off, some think they are a good idea, and some are in between.

I've been pitched a lot of extended warranties, but never for a percent of the purchase price.  Don't know if you are buying a new MH for $160,000 or $400,000, but either way anything close to $10,000 for an extended warranty is a RIP OFF.

Consider how you will be using your RV, will it just be used during part of the year and on weekends?  Will you be going long time or full time in it and put a lot of miles on?  The factory warranty and most of the appliances/systems will have you covered for at least one or two years under their own warranties.  Engine, chassis may be covered longer.  Maybe if you do want an extended warranty it doesn't need to cover anything but the coach, not the engine/tranny.  There are just a lot of personal choices to consider and everyone looks at this issue a little differently.  No matter what way you go make sure you shop around because good extended warranties can be found for under $4,000 in most situations.  

Good luck and congrats on your new purchase!

[Ray,IN]

If you decide to purchase an ESC, contact wholesalewarranties.com and request a quote on that same MH. I think you'll be surprised.

[noteven]

Aren’t warranties, extended warranties, and service contracts different?

They are in the heavy duty truck business. 

The esc’s I worked with involved services and maintenance inspections, not just addressing failures after the fact. They were mainly used by operators needing maintenance away from “home base”.

Extended warranties were purchased extensions to the original warranties. They covered specific failures and circumstances.

None of the above were lifetime repair of use and abuse contracts for the vehicle.

You need to understand the difference between warranty and extended service contract as it would apply to your purchase. 

Think of them as a type of insurance.

Ask to sit down with someone at the dealership who deals with warranty claims and explain the process for the warranties your coach or whatever comes with, and then explain how the extended service plan works. 

Read the documentation and be informed before fussing about “the price”. 

Insurance is the “worst rip off in the world” until you need it...

[Kirk W]

1 hour ago, noteven said:

Aren’t warranties, extended warranties, and service contracts different?

I agree with your thought because I came from the service industry, in the RV community they tend to be interchanged with all referring to what is called an extended warranty by the RV dealers. The only types of contract that I am aware of being offered to the RV buyers are the "extended warranty" and "road service" which are very different. I am quite sure that this thread is addressing the extended warranty contracts. 

1 hour ago, noteven said:

Extended warranties were purchased extensions to the original warranties. They covered specific failures and circumstances.

While the name does come from the extending of the original warranty, in the RV world they are available for used RVs that are no longer under any warranty. I very much agree with you that they are in fact insurance and I call them a health insurance plan for the RV. There are actually two common types, the inclusive one and the exclusive. In the first case, the contract only pays for the items specifically listed in that contract, while the second type lists the items which are not covered and anything not listed is covered. I would only buy the one listing what isn't covered. It might be helpful to read the article which I wrote for Escapees Magazine that has been published by them on two occasions.

[Captain Happy]

DO NOT BUY WARRANTIES.

As some one else has probably already pointed out, take the money (7%) and start a separate saving account and put that money into it. And every month add a little more each month. And when the time comes to have things fixed or replaced you've got it covered. And you won't have to deal with the warranty companies what will more then likely refuse to pay for the repairs. And you'll save your sanity to boot. Besides there are mobile tech you can call, and they come to wherever your at.

And of course there's the other possibility, learn how to repair yourself and save a bundle.

[richfaa]

On 8/24/2018 at 9:38 AM, noteven said:

Aren’t warranties, extended warranties, and service contracts different?

They are in the heavy duty truck business. 

The esc’s I worked with involved services and maintenance inspections, not just addressing failures after the fact. They were mainly used by operators needing maintenance away from “home base”.

Extended warranties were purchased extensions to the original warranties. They covered specific failures and circumstances.

None of the above were lifetime repair of use and abuse contracts for the vehicle.

You need to understand the difference between warranty and extended service contract as it would apply to your purchase. 

Think of them as a type of insurance.

Ask to sit down with someone at the dealership who deals with warranty claims and explain the process for the warranties your coach or whatever comes with, and then explain how the extended service plan works. 

Read the documentation and be informed before fussing about “the price”. 

Insurance is the “worst rip off in the world” until you need it...

You are 100% correct.We have the FORD ESP on the truck it is a extension of the OEM warranty therefore a extended warranty.  It is a service contract on the Rv and  clearly stated as such. It covers stated items on the RV.