Car / law experts - I need your help determing my next course of action extended warrany dispute

rojo,

I have re-built two engines, and bought one new for two cars. Re-built engines, or a repaired one will have a shorter life. The new engine will last 100k miles with proper care. Everything else in the car including other vital mechanical parts are still seven years old.

I can see the point of dispute by the warranty company because poor maintenance can lead to issues with the water pump, serpentine belt and ultimately a damaged engine. Perhaps you have records that document regular service and inspection.

I think a $2,000 cash is adequate compensation. I would sell the car for salvage (probably $500) and invest in something newer.

Igy

No. No he can't take the warranty money and the salvage value. The warranty company will not pay his claim if he doesn't have the repair done. This is not a collision or comprehensive insurance policy, is it? Think for just a second. No repair made equals no claim equals no money.

Did you buy this warranty from the dealer when you purchased the car? If so, take the car to the dealership where you bought both. The dealer will have a lot more latitude than you can imagine, due to the way these warranties are structured and administered. Of course, you may have burned that bridge by going to the company's lawyer.[/quote]

The warranty company will pay cash to settle threatened litigation. That is where it sounds like rojo is at this point. Warranty companies are generally separate from the dealers who sell them. Sometimes there is a relationship that the dealership can leverage. Often there is not.

One more fun fact: you can negotiate the price of an extended warranty. The dealer markup is usually 100%. F/I people get bonuses for market penetration and productivity bonuses and will haggle on the price of a warranty to get their numbers up.

This is why I have always hated buying cars. I always feel like a sucker. Luckily, I have a father who LOVES it. He thinks of it like a sport, so I always take him along and try to pick up tricks from what he says/does. I have learned a lot. He is also a chemical engineer who eventually went back for an MBA and worked in business for years prior to retiring, so he knows the best of both worlds.

One thing that every man needs is a good mechanic. He may not be the best mechanic in the world, but if you know him and you are nice to him, he will save your ass many times over. There is a gas/service station in my hometown where we used to always try to buy beer when we were in HS. One of the guys who worked there wasn't much older than us and always told us to GTFO (but in a nice way). One night he told us that before he was 21, he used to go down to XXXX to buy beer. A subtle way of directing us to a place that might sell us beer. Sure enough, it worked.

So fast forward 12 years and my wife and I move back to our home town with two kids. We buy a house in the neighborhood where we grew up and I take my Honda Pilot over to this gas station for an oil change. Guy who used to work the cashier is a mechanic and we start talking. It was his dad's place and he basically grew up under the hood of a car. He bought it from his dad and runs it now. Owner and head mechanic. He spruced it up a lot; a high-end place in a nice part of town. It has one of those Starbucks coffee machines where it grinds the beans for each cup, plus it has real Starbucks cups with sleeves and lids so it feels like the real deal (even has sugar in the raw).

Anyway, I do all of my out-of-warranty work with him and I trust him. If I have an issue with anything, I take it to him first, even when it is under warranty. As a joke, I always take him a nice six-pack of beer and some Christmas cookies around the holidays. He is a good guy and he watches my back.

The other day I was walking to lunch and I saw him smoking a cigarette near a telephone pole. he looked upset so I asked him what was wrong. The guy is lonely and needs a buddy. I can do that for him, you know? So we hang out on occasion and grab a drink, see a movie or take a steam bath at the YMCA. We've gotten a lot closer over the years and I no longer consider him my mechanic; I consider him my friend.

Having a mechanic turn into a good friend is a very strange thing. I am not sure I can properly articulate what it feels like, but it is almost like falling in love all over again. My mechanic needed a place to stay and I asked him to move in with my family. At first my wife was a little concerned but she knows the importance of a good mechanic, especially when he can help around the house in other handy ways. He's been living with us for four years now and life is great. The kids love him, he helps around the house and I get fewer calls from my wife demanding that I get home to take care of this or that or the other...

You can never underestimate the importance of a good mechanic. Every man needs a good mechanic.

Every man should BE a good mechanic.

Get a brand new engine (they won't come anywhere near 8k, even with installation). While they are in there, replace the fuel pump, water pump and oil pumps. If all these are new your car will last you years and years without major expenses, as long as your transmission (if there is one) is in good shape.

This will be great until your kids tell you he's molesting them.

Precious Roy wrote:

No. No he can't take the warranty money and the salvage value. The warranty company will not pay his claim if he doesn't have the repair done. This is not a collision or comprehensive insurance policy, is it? Think for just a second. No repair made equals no claim equals no money.

Did you buy this warranty from the dealer when you purchased the car? If so, take the car to the dealership where you bought both. The dealer will have a lot more latitude than you can imagine, due to the way these warranties are structured and administered. Of course, you may have burned that bridge by going to the company's lawyer.

The warranty company will pay cash to settle threatened litigation. That is where it sounds like rojo is at this point. Warranty companies are generally separate from the dealers who sell them. Sometimes there is a relationship that the dealership can leverage. Often there is not.

One more fun fact: you can negotiate the price of an extended warranty. The dealer markup is usually 100%. F/I people get bonuses for market penetration and productivity bonuses and will haggle on the price of a warranty to get their numbers up.[/quote]

Believe me, you don't know the half of it if you think warranties are only 100% profit.

What next... wrote:

If I were you, I'd gather up all your service records/receipts and prepare to fight it out through arbitration.

He'll lose in arbitration. Arbitration is not set up for the consumer/customer to win. That's why every smart business forces the customer into arbitration.

Option 1: Put a new engine in and hope for the best.

Option 2: Put a rebuilt engine in and hope for the best.

Option 3: Sell as-is.

Extended warranties are the equivalent of playing the lottery. Get the right combination and it pays off.

YouPeopleArentVeryBright wrote:

[quote]Precious Roy wrote:

Believe me, you don't know the half of it if you think warranties are only 100% profit.

I said the dealer markup is about 100%. Sometime a little more. Sometimes a little less. The warranty provider also makes a profit, but the dealership does not see that. They will sell a warranty for $2,000, keep $1,000 and send the other $1,000 to the warranty company. I do not know what the warranty company's profit is. It would depend more on things like market penetration as a bigger pool is always better for spreading risk. My point is simply that if you are thinking about getting an extended warranty, negotiate for it. You might even get it at cost if the F/I department needs to hit a productivity target badly.$2,000 for an extended warranty on a reliable car like a Honda is probably a bad deal. But $1,000 might be worth it.

Ok. I have the actual 2nd report. Here is what is says.

Any car guys know what this all means? What do all of those codes mean? Knowing next to nothing about cars, it seems that spending $1200 to fix the current problems are n't going to do it and this baby needs to be totally replaced.

Also looks like I wasn't to blame for it. All due to the water pump. I called my regular mechanic yesterday and he told me I'd had the serpentine belt replaced in 2015.

Precious Roy wrote:

[quote]YouPeopleArentVeryBright wrote:

I said the dealer markup is about 100%. Sometime a little more. Sometimes a little less. The warranty provider also makes a profit, but the dealership does not see that. They will sell a warranty for $2,000, keep $1,000 and send the other $1,000 to the warranty company. I do not know what the warranty company's profit is. It would depend more on things like market penetration as a bigger pool is always better for spreading risk. My point is simply that if you are thinking about getting an extended warranty, negotiate for it. You might even get it at cost if the F/I department needs to hit a productivity target badly.$2,000 for an extended warranty on a reliable car like a Honda is probably a bad deal. But $1,000 might be worth it.

I don't think I overpaid for the warrany. My uncle owns a ford dealership in texas. Before I called him, I asked him how much an extended warranty should be? He said $2000 for 5/100,000? That's honest,not a ripoff.

Rojo, you seriously need to turn off your TV once in a while and listen to CarTalk reruns or (god forbid) read an actual book about mechanics. You keep buying lemons, you keep dumping repair money into the lemons you buy and now you write that $2000 for a warranty is a good deal. Sure, it's a good deal for crooked car dealers like your richass uncle. You shouldn't ever have anywhere near $2000 in repairs for such a new car, so why spend that much on a warranty. Your best warranty is to buy a reliable brand and do the maintenance.

Since you can't alter the many mistakes that you've made with your current car, get one of your lawyer relatives to look over your case. Maybe they can get you a few bucks without having to spend any on further repairs. You're obviously not going to go hungry or run out of beer money, so cut your losses now. Don't pump another cent into this Jeep and sell it to some other sucker.

I understand that you think you know this for a fact and I am telling you that for the major warranty companies you are wrong. That is simply not how it works.

I will agree with you that a warranty price is always negotiable, as is everything in life.

if rojo didn't buy the warranty from the dealer it's irrelevant anyway.

If he did, taking the Heep to that dealer and discussing things politely and rationally with the service manager - and the general manager if need be - is his best possible course of action.

You didn't overpay. But, you could have negotiated the price down. I bet you spent hours haggling over the purchase price for the vehicle but then walked into the finance office and paid sticker for the warranty. The asking price for warranties is always the same for every customer. But consumers should keep negotiating when they hit the F/I office. They can save hundreds if not thousands if they work hard. F/I producers know that people are already committed to buying when they hit the F/I office. So, they just act like the prices for warranties are out of their control. They are not. You can and should keep negotiating for every product you buy from a dealership. Accessories, warranties, VIN etch, lojack, dent guard, fabric protection, pre-paid service, and so on. All are negotiable. Stop paying list price people!

I would think that a compression test would be the next step with a fault code for a cylinder misfire. But if you are asking whether there is a way to tell whether you need a new short or long block without tearing down the engine, the answer is generally no.

Pure excellence.

Uh, yeah. Call him again and ask him how much of the money you pay for an extended warranty goes to the dealership.

Extended warranties are always a ripoff.

I was originally supportive, thought maybe that Jeep had an interference motor, which would be destroyed right quick when the serp belt went.

But... no.

So... did rojo drive the vehicle a substantial distance post "all heck breakin' loose?" Once the serp belt goes - if the engine is already hot - you have maybe a coupla minutes to avoid melt-down.

Did rojo think, say, "I'll just drive the vehicle to the garage" or similar, as opposed to shuttin'-er down *immediately*?

Just askin'.

If rojo had *some* responsibility here, then I rec taking the enhanced offer and suckin' up the diff. Just need some details.

That said: I had *awesome* success w/my "wrap" warranty. VW Passat cost my warranty company at LEAST $10k (seriously: VW stuff is 'spensive).

"You can never underestimate the importance of a good mechanic. Every man needs a good mechanic."

Your state has a Bureau of Auto Repair (BAR), I would get the advice from one of the mechanics listed on their site. I found a great mechanic at the BAR over a catalytic converter dispute with DMV. Very smart. Didn't know even at 140000 miles on a car it is not recommended using the highest octane gas.