Extended Warranty ?

[Bill&Anneli]

Hello,

We are purchasing our first DP motor home, not mechanically inclined so will not be doing any of our own mechanical work. We are looking at the extended warranty plans out there, GoodSams offers one for a 2015 Dutchstar (which is what we are considering) for $1629/yr with a $1,000 deductible, that is for comprehensive.

Does anyone have any experience with these types of extended warranties ? or any advise for us ?

Thanks so much !

[sandsys]

I like Barb's system--put that payment money in a special savings account, adding to it as you go,  then use it if and when you need work done. You can get a lot of work done with that amount of money and you won't be restricted by what the insurer says.

Linda

[Bill&Anneli]

Thank you Sandy, so what does it cost to repair a 450hp diesel engine ? 

[Barbaraok]

Depends upon what the problem is.   How old is the coach?  If used, do you have access to all service/repair work done?  As Linda said, we started with 10% of purchase price in an account and add to it every month.  That has covered not only repairs, but annual service, tires every 6-7 years, new batteries, windshield wipers, repairs to house portion, etc.  We’re on year 14 of owning our rig.

[Bill&Anneli]

10% of purchase price would be $21,000, if we don't have that to set aside - are we fools for purchasing the motor home?

[Twotoes]

You purchase liability insurance hoping you will never have an accident. I have never heard of anyone suggesting putting the premium in a savings account. I have $500,000 limits on my policy. Buy term and invest the difference never works either. If you were buying a trailer then maybe go without an extended warranty but you are buying a diesel motorhome with a motor, transmission and lots of appliances and components. Make sure it is an all inclusive policy that lists anything that is NOT covered and NOT a policy that only lists what is covered leaving everything else out.  The price you stated for Good Sam sounds high and I have seen many negitive reviews regarding Good Sam. Shop around, you don’t have to buy from the selling dealer. Check out Wholesale Warranties, who is a broker for many companies. 

[sandsys]

39 minutes ago, Twotoes said:

You purchase liability insurance hoping you will never have an accident. I have never heard of anyone suggesting putting the premium in a savings account. 

Liability insurance was not part of the question. Vehicle insurance and extended warranty are two very different items. I would not be without insurance but I would not buy an extended warranty.

 

55 minutes ago, Bill&Anneli said:

10% of purchase price would be $21,000, if we don't have that to set aside - are we fools for purchasing the motor home?

So don't put 10% of the purchase price into savings. Put your initial warranty payment payment plus your deductible into savings. Add the annual cost every year plus anything else you feel comfortable adding. You're still likely to come out ahead unless you bought a true lemon and a pre-purchase inspection should keep that from happening.

If you do decide to buy an extended warranty be sure to read the fine print first. It usually doesn't cover wear items like tire, belts and hoses so you'll end up paying out of pocket for those things anyway.

Linda

[Barbaraok]

3 hours ago, Bill&Anneli said:

10% of purchase price would be $21,000, if we don't have that to set aside - are we fools for purchasing the motor home?

We bought a used DP, so our initial contribution was less than what it would have been for a new DP.  I negotiate the price down because I was going to set up the fund and we were willing to walk away from the deal if they said no.    You didn't say what you are buying so we have no way of knowing whether the MH you're looking at is from a manufacturer with a long positive history or one whose products don't hold up as well, and whether it is new or use, and if used, whether the records of service, etc. were available.  The previous owner of our coach  had a binder in the coach with all of the service records,  etc. 

 

[Barbaraok]

3 hours ago, Twotoes said:

You purchase liability insurance hoping you will never have an accident. I have never heard of anyone suggesting putting the premium in a savings account. I have $500,000 limits on my policy. Buy term and invest the difference never works either. If you were buying a trailer then maybe go without an extended warranty but you are buying a diesel motorhome with a motor, transmission and lots of appliances and components. Make sure it is an all inclusive policy that lists anything that is NOT covered and NOT a policy that only lists what is covered leaving everything else out.  The price you stated for Good Sam sounds high and I have seen many negitive reviews regarding Good Sam. Shop around, you don’t have to buy from the selling dealer. Check out Wholesale Warranties, who is a broker for many companies. 

We aren't talking about liability insurance - - Texas wouldn't let us register without liability insurance.

We have had our DP for 14 years, and have used the fund to not only pay for any needed repairs (and ALL RVs will need repairs at some point) but also for our yearly service, for new tires/batteries as they age out.  Just put 4 new tires on the rear of the coach this spring - put on credit card, then paid out of fund at end of month.  Timed it so that our cash back card was giving 5% on fuel/service during that quarter so got 5% of the cost of the tires in our cash rewards - - Starbucks for the summer!

[Kirk W]

This should really be made as a business decision. The so called "extended warranty" is actually a health care insurance plan for your RV. Let me suggest that you take the time to read this article on extended warranties that was published in Escapees Magazine a few years back, before you make up your mind. To put it in simple terms, you should insure against any loss that could cause you serious financial distress, but not insure if you could pay that loss from existing funds without financial stress. 

[Bill&Anneli]

Thank you to all for the thoughts, we did read the article on this topic in escapees magazine from a few years back, we both have worked in the financial services industry so are familiar with how these contracts work. What we don't know is what to expect in terms of repairs etc on a 450hp Cummins Diesel engine, the chassis, allison transmission and all the "house stuff". Is there such a thing as an "average" amount to be expected on repairs (not wear and tear that is not covered)? probably not....

We are looking to buy a used Newmar Dutchstar 2015 for what it is worth in case there are any Newmar owners out there that may have additional comments. We are having it inspected and the prior owners have provided maintenance records. Maybe after the inspection we will feel more ready to make a decision on this. 

Thanks again!

[Kirk W]

2 hours ago, Bill&Anneli said:

Is there such a thing as an "average" amount to be expected on repairs (not wear and tear that is not covered)?

If you look at your homeowner's insurance, you don't buy the insurance to pay for routine maintenance but rather to pay for catastrophic repairs. That should also be the way you look at an extended warranty. It is very unlikely that buying one will save you money on normal maintenance. Where they do come into play is in the event that you have a major engine or transmission failure, or at least a refrigerator and/or air conditioner. In addition, the cost of that extended warranty increases with the age of the RV, just as health care insurance cost rises with age of the insured and for the same reason. More parts are failing due to age. 

While I have never owned a Dutch Star, I have several friends who have and 2 of them now own their second DS. It is a quality coach from a very reputable RV manufacturer with a good history of support. With it nearing 5 years old there is some degree of risk but it sounds like a good choice. When choosing if you buy an extended warranty or not, ask yourself what the impact on your finances will be if the worst should happen and you need a major engine or transmission repair, which will likely cost you $15k or more. If you can survive that type of event, you probably should not buy an extended warranty. 

[Barbaraok]

Newmar makes a good coach. If the inspection goes well you will have yourself a nice unit.  How risk accepting you are, you have to determine.  Remember, insurance companies make money by settling fewer claims than they take in.  

Edited July 31, 2019 by Barbaraok

[2gypsies]

We full-timed in a Newmar diesel (Cummins/Spartan) for 8 years with absolutely no repairs to anything.  Diesels are known to run a long, long time if you do the necessary maintenance on them.  We traveled mountains and gravel backroads all the time.  Ours got a workout, for sure .... but no issues.  Yes, you couldn't be that lucky.  That's the chance you take.  We've never bought extended warranties on anything we've owned and have never been sorry.  Like Barb.... we've always made sure we have money set aside for emergencies and that money increases if not used.

[SOD]

Does anyone have experience with a Company called wholesale warranties they are backed by Lyndon Southern Ins. Co. They seem to have a good policy.

[Ray,IN]

My experience. When we bought this MH from CW, we also purchased an extended service contract (by law it is not a warranty). The price was rather high, deductible was $50 per visit-not per incident.During the 3-yr contract it paid for itself-including deductibles. All repairs were on the coach, none on the chassis.

If you decide to purchase an extended service contract, TwoToes offered excellent advice. I will add, be sure to purchase the add-on for gaskets and seals. Otherwise if a gasket or seal fails, allowing oil to leak out and cause an engine or transmission failure, nothing is covered.

There is a man on a different RV forum who is presently out nearly $50,000 for 3 repairs on a Cummins X15,IMO a troublesome engine. I'd stay away from any MH with that engine. BTW, he had no ESC.

Wholesalewarranties.com is a reputable company, I have never read any negative comments on any RVing forums. They have specific requirements prior to selling an extended service contract, to protect both parties.

 

[SOD]

Thanks Ray, I've had extended service contracts before but never with wholesale warranties. Their price was lower than what I had paid before and when this happens it makes you wonder is this real?

[Kirk W]

Before you buy one of the so called "extended warranties" I suggest that you take the time to read this article about them which has been published by Escapees Magazine twice. 

[Rover]

15 hours ago, SOD said:

Does anyone have experience with a Company called wholesale warranties they are backed by Lyndon Southern Ins. Co. They seem to have a good policy.

We purchased a an extended warranty with them and have been pleased. We have filed 3 claims so far with no problems whatsoever and have pretty much received back what we paid for the contract. Any other claims here on out will be gravy. When we shopped originally they had the best coverage and at the best price.

Vicki

 

[Twotoes]

As I said already if you are buying a vehicle with a motor and transmission, especially a used one, it is a good investment to purchase an extended warranty. The RV you are looking at a Newmar Dutch Star is a great vehicle and the Cummings motor and Allison transmission are both good too, but they do sometimes breakdown. I have a friend who has an older DutchStar and his diesel motor broke down last summer. It cost him over $30,000 in repairs. I know he did all the service, it just was bad luck for him. Putting $1,629 in a savings account will not even come close to a major repair. I purchased a ESP for my used 2015 DP when I bought it in 2017. Cost me $7,500 for 5 years with a $50 deductible. I have almost broke even in less than 3 years on just minor issues.

[Ray,IN]

As that Escapees  article points out, it(vehicle service contract) resembles a copy of a health insurance plan. Would you forgo buying health insurance, opting instead to set aside a fixed amount monthly?

Of course that is over-stating the question, but you see the point. BTW, our MH had been parked in a barn for 6 years prior to our purchase. Non-use is very hard on a vehicle, thus the ESC.

[mptjelgin]

1 hour ago, Ray,IN said:

As that Escapees  article points out, it(vehicle service contract) resembles a copy of a health insurance plan. Would you forgo buying health insurance, opting instead to set aside a fixed amount monthly?

Of course that is over-stating the question, but you see the point. BTW, our MH had been parked in a barn for 6 years prior to our purchase. Non-use is very hard on a vehicle, thus the ESC.

Apples and Oranges.  Health care can get into tens and even hundreds of thousands of dollars pretty quickly, and perhaps over a million dollars if things go very badly.  On the other hand there is absolutely nothing that can go wrong with our fifth wheel (or truck for that matter) that would result in a crippling financial burden for us.  So we keep our money in our "pocket" and self-insure our RV. We've done this for 20+ years and are way ahead on dollars saved vs. dollars spent. 

Not what everyone should do, but talking about it as if it is an "investment" or a must-have is simply not accurate for many folks. 

[Barbaraok]

Same with us, we put 15% of the purchase price into a fund and ADD TO IT EACH MONTH.   Not only do we pay for repairs, but if something is worn and we find it, we have it replaced before it breaks.   Or if we have two of the same thing and one breaks, we replace both since they are the same age.   In addition this fund pays for yearly maintenance, as well as batteries and tires as they need to be replaced.  Not for everyone, but we've been doing this since 2005 and the fund has always been in the positive.    

[Kirk W]

4 hours ago, mptjelgin said:

On the other hand there is absolutely nothing that can go wrong with our fifth wheel (or truck for that matter) that would result in a crippling financial burden for us.

You must not have read the article linked to? It clearly states that one in your position should not buy such coverage. You should insure against a loss that you could not afford to cover but if you have the money to replace any loss, then no. And that is also true for any other type of insurance. I have an SUV that only has the required liability insurance because it has a replacement value that is less than my currently maintained bank balance. My truck is insured because it would be much more expensive to replace. 

[mptjelgin]

33 minutes ago, Kirk W said:

You must not have read the article linked to? 

It wasn't a matter of reading an article. This is the philosophy that I've adhered to for 40 years and it has worked well for me.  But our conclusions are the same, correct?