Wholesale Warranties

[Fleetwood Matt]

I am taking delivery next week on my new motor home and considering an extended warranty. I understand the plans from dealers tend to not be so good but come with a big price tag. 

I am researching Wholesale Warranties.  Anyone have experience (good or bad) with them?  If so, would you recommend them?

Thanks for helpful responses!

[Kirk W]

Extended warranties are not really a warranty but an insurance policy covering repairs. It is very important to make sure that any you consider be of the type that covers everything except the listed items, rather than the type that only cover listed items. You should also shop the extended warranties, if you plan to buy one and Wholesale Warranties does seem to have a pretty good reputation, but don't discount the one offered by the dealer without checking it out first as some of the are good and others not so good. Realize that only rarely does an extended warranty, or any other insurance policy save you money as they are written by "for profit" companies and must take in enough to pay their salaries and profits in addition to what is paid out in claims. We buy insurance for our homes because it would be a financial disaster if it was destroyed and because the mortgages companies require us to do so. Insurance of any kind should only be purchased if it will pay for a loss that would be financially destructive if not covered. While it was some time ago, RV Extended Warranties was published in Escapees Magazine and most of what it says still applies.

[Second Chance]

I'll echo what Kirk said in a slightly more negative tone. My wife found a very good description of extended service plans a while back (they are not warranties, but rather insurance policies with lots of fine print). They are another form of legalized gambling. The company is betting that nothing breaks that would cause them to pay out more than you paid for the policy; you're betting it will. As in all forms of legalized gambling, the house usually wins. Otherwise, these companies wouldn't be in business or make a profit.

Dave Ramsey and Clark Howard have commented on these plans many times, too. The standard seems to be that 80% of extended service plan revenue goes toward commissions and marketing. Only 20% goes toward paying for actual repairs, which means most people are getting a really bad deal. We prefer to set money aside regularly (earning interest) and pay for repairs as they come up.

Rob

 

[Kirk W]

28 minutes ago, Second Chance said:

We prefer to set money aside regularly (earning interest) and pay for repairs as they come up.

While this is by far the best approach, it requires both the funds to do that and also the selfdissipline to keep all of it there and to contribute to it as planned. If the cost of replacing an engine or transmission would mean the end of your travels, then you should consider an extended warranty, but if you have ability to pay for even the most expensive of repairs, then you would be foolish to get one. An average traditional gasoline engine will cost between $4,500 and $6,000 to replace with a new engine. Even a used engine may cost you around $3,000 to $4,000. Four-speed transmissions are going to run between $3,000 and $4,000. If it's a six-speed, you're probably looking at between $4,000 and $5,000. 

If you were to set aside $10,000 as a reserve and then add $100/month into it for the years that you travel, paying out of it only for major repairs, you could have the needed funds to help replace the RV when the time comes, if you never have a major repair to pay for. 

Edited February 8 by Kirk W
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