Car Maintenance Contracts

[Geila]

When I bought my car, the dealership pushed their maintenance contract pretty hard. Since they were pushing it so hard, I figured it's mostly profit for them so I didn't buy it. Dh thinks maybe it's a wise investment so I wanted to get y'all's opinion on it. The contract covers a bunch of stuff every 7,500 miles, even a loaner car if you need it, and the cost is $1,800 for 5 years or 60k miles. We're in a HCOL area if that matters. They offered us a $300 discount after we refused it, so we can possibly buy it for $1,500.

What's the collective wisdom on these things? Wise investment or waste of money? (They claim that by prepaying for the program you save over 50%, but I'm not really buying that.)

[catherine]

In my mind, it's a philosophical argument, almost. I tend to be against extended warranties/maintenance contracts, and DH swears that they've "saved" him hundreds of dollars. However, I truly don't believe he took into account the price of the warranty.

In my experience, good, brand-new cars shouldn't require much maintenance over a 5 year period. I personally would place my bets against needing a warranty/maintenance contract. But I tend to try to avoid "what if" purchases. And I KNOW that these warranties are significant profit centers for the dealers, which ought to tell you something.

And I'm certainly not an expert, so I'll let others weigh in.

[herbgeek]

Personally, I think its a waste of money. Cars are now so reliable, they rarely need service. I certainly don't pay $300 a year on unexpected maintenance. If there is a design flaw, you're covered anyways (I don't know a new car that doesn't at least come with a 2 year warranty).

[Teacher Terry]

Waste of money.

[Geila]

This contract is for regular maintenance (oil change, tire rotation, cabin air filter replacement, wiper blade replacement, etc), rather than repairs.

[mschrisgo2]

Waste of money.
I have a Kia Soul that I bought new in mid 2014, so 4.5 years ago. it just had its 90,000 mile service, which is a big one, cost $399. I've had the oil changed at the suggested intervals and regular service done at the dealer. They give me a ride or a loaner car for the big services, the oil changes are less than an hour, so I take my tablet or book and wait. With my mileage, which is another 50% more than your would be covered for, I have not spent $1500.

The only way that would be worthwhile is if it covered your next set of tires also.

[Teacher Terry]

Goodness, that’s even a bigger rip off.

[catherine]

I think that maybe they're trying to retain you as a customer for maintenance rather than going to JiffyLube or anything like that. Honestly, I still wouldn't want to be locked in. JiffyLube is $19.99. Of course there are regular maintenance things that go beyond an oil change, but I don't know.

I've had my Prius for 11 years. I just had a tune-up/maintenance check (odometer was about 122,000). I had the works: oil change, air filters, tires rotated, etc. PLUS I got two new tires and the bill was $408.

[Tammy]

Our son is a maintenance manager by trade and is a genius at auto, electrical, plumbing, AC, heating, etc etc. he fixes anything. So he maintains our car for a small price for labor. Of course this is the best deal for us - but also his opinion is that for those who don’t fix their own stuff, self insuring is almost always cheaper than buying a maintenance contract.

[SteveinMN]

I wouldn't do it.

Every now and then you hear about someone who was spared a four-figure repair because (s)he had a maintenance contract on the car. But those "winners" are rare. You're essentially placing a bet that your car will need repairs costing at least what you paid for the contract in the period the contract covers (and that's assuming it's something the manufacturer's warranty doesn't already cover).

Fine print abounds in these contracts. If you (or anyone else) is still interested, check if the contract extends the manufacturer's warranty or runs concurrently (so you're really getting only a year or two of coverage for your money). Most contracts will require you to have repair/maintenance work done only at a dealer ($$$$) or require a periodic inspection (hassle) whether or not anything is wrong. Check if work is covered anywhere other than at the dealer which sold you the contract (what if something breaks down while you're driving in another state?). Find out what is considered a "wear item" (tires, belts, hoses, even things like automatic transmission fluid) and, therefore, unlikely to be covered and your expense.

While I'm posting, I'll throw in that I'm not a fan of national quick-lube places. My experience is that their business model encourages cut corners and mistakes. If you do get a conscientious tech, they likely won't be there long because of the low pay and constant push to get jobs out the door or the need to upsell ("We did our free safety check and found you need a fluid change and new wiper blades." Ka-ching). IMHO it's a false economy.

[Gardnr]

1st review your service manual. What is recommended each year and/or every 7500 miles? I don't know about you but I follow my manual. My annual maintenance runs average $400/year. Your contract offer is now $300/year.

If you drive higher miles it could really be a bargain. Only you can decide what's best for you.

[Tybee]

It sounds expensive since it is not an extended warranty--Steve, I think you are thinking of extended warranty and she says it is maintenance only. If it is only that dealer, then it will not help you if you move or need oil change elsewhere.

In 2009 I paid 1200 for a ten year extended warranty. I think I might have had one repair on it that totaled 700 dollars, so the dealer made money on me. It gave me peace of mind. I probably would not do it again, though. But that could be used anywhere.

I also found I loved my Toyota dealer in South Carolina and hate the one up here. So I would not go there anymore, anyway. I'd be wary of getting hooked up with that dealer for 1500 dollars worth of service, but I get you have to do the warranty work and it's expensive.

[SteveinMN]

Steve, I think you are thinking of extended warranty and she says it is maintenance only. If it is only that dealer, then it will not help you if you move or need oil change elsewhere.
You're right, Tybee, I was thinking more "extended warranty". But many of the same questions (and caveats) apply to a maintenance contract. I still wouldn’t go for it. I like the flexibility of choosing who maintains my car (sometimes it's even me!). But that's my preference and not everyone's.

[ToomuchStuff]

It would be worth it, if a maintenance part they covered was fuel. (filling up the tank every time it is low)
Otherwise, pull out your owners manual and look at the maintenance section in the back and tell us what is needed and when, and what is covered by the contract, and where do you go for your work (always a dealer, small mom and pop shop, etc). Then do a quick search on Youtube to see how the stuff is done.

Another option, is to put that $1500 in a separate car fund account and see how often and how much you hit.

To some it may be worth it (I know one case where when the person bought the car, they were told it wouldn't need anything for the first 100K miles and they blew the motor at 30K due to no oil changes/not understanding), to others, your prepaying for services, that means you will be going back for everything to the dealer, and that just gives them more opportunities to say you need this which isn't covered. (those of us who do our own oil changes, check our tires once a month, replace our own wipers, etc)

As to the quick lube places, I have horror stories from both a friend who worked there, and customers I dealt with, after there.
There oil come in drums, so if they were out of fresh, using the old oil drum to refill.
Forgetting to put in oil.
Overtightening the plug or forgetting the plug gasket.
Charging in two cases for services not performed, one of which we still had the old part (husband had us do it, the wife paid for the just done thing to be done at the quick lube). The second instance was for a radiator fluid flush and fill on an old VW (air cooled, no radiator).

[Geila]

This is what the program covers:

Every 6 months or 7,500 miles:
Lube, oil and filter changes (with synthetic oil)
Tire rotation
Multi-point inspection

Every 15,000 miles:
Cabin air filter replacement
Engine Air filter replacement
Wheel balance

Front wiper blade replacement every 12 months

Wheel alignment every 30k miles
Front Brake Pad replacement one time during the term of the contract


I always thought tires had to be aligned every time they got rotated. I guess we've been getting ripped off all this time. Whenever we take Dh's car to the Honda dealership to have the oil changed and tires rotated (every 6 months), they always say that they ran the diagnostics and that the alignment needs to be done, which I think is about $100. How often do you guys do the alignment?

ETA: I was surprised that 7,500 miles is the new standard for oil changes. That's what my owner's manual recommends. Actually it's 12 months or 7.5k miles. I guess it's the new synthetic oil.

[catherine]

Another option, is to put that $1500 in a separate car fund account and see how often and how much you hit.



That's a good idea. I have $400 a month taken out and put in a "car sinking fund" (Dave Ramsey term) for maintenance and also savings for the next car and I love it. It's amazing how quickly at adds up. I think that a $1500 fund would be a good way to see how much you actually spend on maintenance

[Geila]

Yes, the $1500 fund is a good idea. I think my credit union will let me setup a sub-account for it. It would also be a good way to budget for car expenses. I'm sure at some point the repairs will start coming in.

[Geila]

Oh, I believe that by law they have to refund you the balance if you move and/or no longer use them for maintenance. They cannot charge you for a service that they have not performed. Not in California anyway.

[Geila]

Steve - The program covers $35 per day of rental car expense for a max of 5 days if your car is in the shop. It also covers a loaner car while your car is being serviced for maintenance. I don't know how it would be handled if traveling out of state. Maybe you contact the local Mazda dealership to make arrangements? The car itself comes with 24 hour roadside assistance automatically.

I wouldn't take my car to a Jiffy Lube type of place but might take it to one of the AAA Auto Repair Centers, there is one not far from us. But I think for the first 3 years while it's still under warranty I would like to take it to the dealership, just for some peace of mind. Even if it's not justified, I guess.

[ToomuchStuff]

This is what the program covers:

Every 7,500 miles:
Lube, oil and filter changes (with synthetic oil)
Tire rotation
Multi-point inspection

Every 15,000 miles:
Cabin air filter replacement
Engine Air filter replacement
Wheel balance

Front wiper blade replacement every 12 months

Wheel alignment every 30k miles
Front Brake Pad replacement one time during the term of the contract


I always thought tires had to be aligned every time they got rotated. I guess we've been getting ripped off all this time. Whenever we take Dh's car to the Honda dealership to have the oil changed and tires rotated (every 6 months), they always say that they ran the diagnostics and that the alignment needs to be done, which I think is about $100. How often do you guys do the alignment?

ETA: I was surprised that 7,500 miles is the new standard for oil changes. That's what my owner's manual recommends. Actually it's 12 months or 7.5k miles. I guess it's the new synthetic oil.

Oil and motors have improved. As for alignments, that depends on road conditions (potholes/tire damage, etc), and vehicle issues (broken tie rods, etc). I know of a vehicle that received its first alignment around 100K.
Multipoint inspection is a keyword for they look at your car and see if there are other things they can recommend or charge you for. (general look around)
That seems often for an air filter, but they are $15-$40 roughly at Walmart.

[SteveinMN]

This is what the program covers: my comments in blue [ETA prices are per occurrence]

Every 6 months or 7,500 miles:
Lube, oil and filter changes (with synthetic oil) $60
Tire rotation $40
Multi-point inspection (what ToomuchStuff said)

Every 15,000 miles:
Cabin air filter replacement $30-50
Engine Air filter replacement $20
Wheel balance $40

Front wiper blade replacement every 12 months $20-50 depending on the quality of blades they use

Wheel alignment every 30k miles $80
Front Brake Pad replacement one time during the term of the contract Only pads, not rotors (if needed)? This cost is more variable but you'd be OK budgeting $250-400 for a front-brake job and that includes more replacement parts than just the pads.
IMHO just not worth what they're charging for it. I note that they're not covering the battery (it may or may not have a warranty from the OEM) or bulbs; tires would come with their own manufacturer warranty).

Pretty much anyone with opposable thumbs in a temperate climate :) can change an engine air filter and, on most cars, the cabin filter isn't much harder. The most expensive components there are the filters themselves. Wipers are not difficult to replace; I typically spend more time getting the wipers out of their blister packaging than I do putting them on the car.

Some of the work being done requires equipment most people would not have in their garage at home but would be available at any place that calls itself a service center -- and there's nothing here to which a dealer would bring special useful expertise (any good tech can look up the service requirements, replacement part numbers, lug-nut torque figures, etc.). The dealer's service department might know to look at a part of the car that, by design or use, has become problematic ("they all do that") but you'd have to know about that to ask them about it and then determine whether their repair "opportunity" was looking out for you or looking for your purse.

Still wouldn't do it. Even if you do none of this work yourself, you're ahead putting that money in a subaccount and using it for the maintenance and wear items and repairs this agreement does not cover.

[mschrisgo2]

I remember many years ago now, around 1990, when I bought a new Mitsubishi Colt (made in the US) they were leaning on me really hard to buy the maintenance package, which was $3000. That was a whole lot of money in those days! In fact, 20% of the price I paid for the car. I think they thought because I paid cash for the car that I had lots of money to throw around. Anyway, I told the guy I was buying a New car so I wouldn't have to spend that kind of money on it. He countered, and I said, "Wait, give that contract back. If this car is going to have so many problems, I don't want it!" They back peddled real quick, hauled out all kinds of statistics on what a reliable car it would be- and it was! In all the years I had it and drove it to over 200,000 miles, I never spent that on it.

[Geila]

Thanks, everyone. I will not be buying the contract. It's been good to become a bit more knowledgeable about car maintenance.