Monday, February 16, 2009
Money Savings Monday: Buy The Warranty
Last year we bought a used Saturn from CarMax as a second car. We only paid $6,000 for it and decided to buy the extended warranty. I am so extremely thankful because 18,000 miles later my brakes went out, my air conditioner broke, my engine blew, the sunroof stopped working and my seat stopped moving. My mother said I have a black cloud that follows me! I think she is right.
Well, there is a $50 deductible on each breakdown so when my air went out last summer I decided to wait to bring it in. I thought I would wait to see if anything else broke to save on the deductible. About 2 months later the seat broke, but it wasn't until the sunroof stopped working that I decided to bring it to the shop. Unfortunately I got busy that week and before I knew it the wheel cylinder went out and I lost my brakes as well.
It worked out that I was going to get everything fixed for $50. I was so excited until the tow truck showed up. I started the car to drive it to the truck and guess what? The engine blew! No problem, I thought, I had 2,000 miles left on the warranty.
Always read the fine print
I did not realize there was a clause in our contract that read:
5. Limit of Liability Our liability is the cost oto repair or replace any covered breakdown; but in no even shall this cost exceed the average retail value of your vehicle as determined by the NADA at the time of loss.
Damages were around $9,000 - what did they cover? $3,700! So, I get a new engine. I get my seat fixed. I get my brakes fixed. The rest is my loss!!! If I had brought it in for each thing as it broke down it would have been covered, but because I saved up all the problems to save on my $50 deductible I have to eat $4,300 worth of breakdown!
Moral of the story - sometimes it is better not to be so cheap. I don't regret buying the warranty, but I should have been fixing things as they broke.
Hope it isn't a hot summer,