KIA Extended Warranty Info

[JKM2009]

I'm interested in buying an extended warranty. Is the pricing standard for a 2022 Telluride?

 

[OldPilot]

Extended warranties are wildly profitable for sellers (and a bad deal for buyers IMO). Anyone wanting to sell you a warranty will have lots of negotiating room. Offer half price and work from there.

Hint: Read the warranty, specifically the exclusions section, and any language that if the OEM recommended service intervals are not met exactly that the warranty is void. Typically the stuff that actually might fail is excluded from coverage. My son asked me to look at a warranty once and basically everything was excluded short of throwing a rod through the block and in that event the warranty did not cover to R&R the engine.

 

[vinylhaircut]

I normally don't by extended warranties on anything. But I opted for a 150K one via Kia of Muncie for my Telluride. (Technically, I first bought a 100K warranty and later extended it to 150K). So far, I've had a GPS module and an alternator replaced under that extended warranty, plus rental cars for the days it was in the shop. Both were outside of the standard Kia warranty mileage. I'm at 81K miles now. The sum of those two claims is very close to what I paid for the warranty. So I'll either break even, if I have no additional claims over the next 69K miles, or I'll come out ahead.

The value of the warranty (or lack thereof) will vary greatly depending on your particular situation. It might make sense if you plan to keep your car for a long time, if you choose the warranty very carefully, if you don't mind some extra steps during repairs, and if the risk of a significant repair cost later on creates a lot of anxiety for you. On the other hand, it might make little sense if you are going to replace the car fairly quickly (during the mileage that carries fewer anticipated repairs), if you don't want to deal with authorized dealers, or if your cash flow allows you to more easily absorb repair costs.

As others have pointed out, in many cases the cost of the warranty will exceed the actual expenses incurred. If that total cost is the only thing that matters, then skip the warranty. But if there's value *for you* in smoothing out cash flow, then it still might make sense. Shop carefully. I found Kia of Muncie to have a much better price (and product offering) than my local dealer.

 

[JKM2009]

Thanks for the input. When I purchased an extended warranty on my Ford, I found a dealer that undersold my local by thousands of dollars. I've always made out with the repair cost well above what the warranty cost on my Ford.

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[Stan b]

Purchasing a new Telly right now and of course they are wanting to sell an extended warranty. Cost of about $1800. Say it would extend the electronics (among other things) to 100k miles. Typically don’t buy them but what do others think?

 

[vinylhaircut]

Purchasing a new Telly right now and of course they are wanting to sell an extended warranty. Cost of about $1800. Say it would extend the electronics (among other things) to 100k miles. Typically don’t buy them but what do others think?

You'll find people here who will claim that they don't make sense in any circumstance. And there are others, like me, who've had good experiences (see a couple posts above). It really depends upon your situation. Consider factors like how long you intend to keep the vehicle, your ability to pay for unexpected repairs if needed, your tolerance for risk, how you'd feel if you bought the extended warranty but never used it, and of course the specific details of the policy they're selling.

 

[Williamtell]

Extended warranties can be bought from other vendors. I believe my insurance company (Geico) sells them for less than the dealer. At least that was the case when I bought my 2016 Corvette. You may also be able to talk the dealer into a reduced price. The Toyota dealer did that when we bought my wife’s Sienna.

 

[OldPilot]

Purchasing a new Telly right now and of course they are wanting to sell an extended warranty. Cost of about $1800. Say it would extend the electronics (among other things) to 100k miles. Typically don’t buy them but what do others think?

Statistically speaking it is a guaranteed loser for buyers. Think about it: The insurance company knows far better than anyone else (including the dealers) what the loss rate is likely to be. So that is priced into the warranty. Then there is some uncertainty in their estimate so that is priced into the warranty. Then they have overhead; building, staff, etc. and advertising, so that is priced into the warranty. They need a profit margin for themselves so that is priced into the warranty. Finally, they need a big fat commission rate to motivate the F&I guys and the dealers to sell the warranty.

The question is, for an individual buyer, whether the risk of a big repair bill (like the electronics package) would cause financial difficulty significantly above the cost of the warranty. Personally I would never buy one but I do buy liability insurance on my cars even though that is also statistically a loser across all buyers.

You will always find stories of warranty buyers who have "beat the man." That's how statistics works. But you will rarely hear from warranty buyers who have had no claims. That's how human nature works. But --- guaranteed the losers outnumber the winners. Always.

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[vinylhaircut]

Statistically speaking it is a guaranteed loser for buyers. Think about it: The insurance company knows far better than anyone else (including the dealers) what the loss rate is likely to be. So that is priced into the warranty. Then there is some uncertainty in their estimate so that is priced into the warranty. Then they have overhead; building, staff, etc. and advertising, so that is priced into the warranty. They need a profit margin for themselves so that is priced into the warranty. Finally, they need a big fat commission rate to motivate the F&I guys and the dealers to sell the warranty.

The question is, for an individual buyer, whether the risk of a big repair bill (like the electronics package would cause financial difficulty significantly above the cost of the warranty. Personally I would never buy one but I do buy liability insurance on my cars even though that is also statistically a loser across all buyers.

You will always find stories of warranty buyers who have "beat the man." That's how statistics works. But you will rarely hear from warranty buyers who have had no claims. That's how human nature works. But --- guaranteed the losers outnumber the winners. Always.

I agree, with some clarification. It is *very likely* a loser when averaged across a large number of buyers. It's not quite as absolute as "guaranteed", because the insurance companies don't have data on loss rates of each new model. You can see that reflected in costs of these extended warranties from year to year. But in general, you're right. The insurance companies make a profit, which means the buyers (in aggregate, take a loss.)

But that's not the whole equation. "Value" means different things to different people, and just because the companies make a profit doesn't mean it's a poor purchase in all cases. Just think about the purchase of the vehicle itself. Kia makes a profit. The dealer makes a profit. But the car may still be a good value to you when factoring in your alternatives, your use and enjoyment of the car, etc. In other words, you derive value from things other than just the financial transaction. If not, many people would never buy a new vehicle at all.

The same is true with an extended warranty. For some, the smoothing of potential costs and insurance against a really big expense may be worth the price. They derive value from things like peace of mind, or limiting a financial "surprise". They may or may not actually come out financially even or ahead (since it only takes a couple of repairs to do so in some cases), but there may be more to the value equation than that.

 

[44Dan44]

Statistically speaking it is a guaranteed loser for buyers. Think about it: The insurance company knows far better than anyone else (including the dealers) what the loss rate is likely to be. So that is priced into the warranty. Then there is some uncertainty in their estimate so that is priced into the warranty. Then they have overhead; building, staff, etc. and advertising, so that is priced into the warranty. They need a profit margin for themselves so that is priced into the warranty. Finally, they need a big fat commission rate to motivate the F&I guys and the dealers to sell the warranty.

The question is, for an individual buyer, whether the risk of a big repair bill (like the electronics package would cause financial difficulty significantly above the cost of the warranty. Personally I would never buy one but I do buy liability insurance on my cars even though that is also statistically a loser across all buyers.

You will always find stories of warranty buyers who have "beat the man." That's how statistics works. But you will rarely hear from warranty buyers who have had no claims. That's how human nature works. But --- guaranteed the losers outnumber the winners. Always.

I agree, with some clarification. It is *very likely* a loser when averaged across a large number of buyers. It's not quite as absolute as "guaranteed", because the insurance companies don't have data on loss rates of each new model. You can see that reflected in costs of these extended warranties from year to year. But in general, you're right. The insurance companies make a profit, which means the buyers (in aggregate, take a loss.)

But that's not the whole equation. "Value" means different things to different people, and just because the companies make a profit doesn't mean it's a poor purchase in all cases. Just think about the purchase of the vehicle itself. Kia makes a profit. The dealer makes a profit. But the car may still be a good value to you when factoring in your alternatives, your use and enjoyment of the car, etc. In other words, you derive value from things other than just the financial transaction. If not, many people would never buy a new vehicle at all.

The same is true with an extended warranty. For some, the smoothing of potential costs and insurance against a really big expense may be worth the price. They derive value from things like peace of mind, or limiting a financial "surprise". They may or may not actually come out financially even or ahead (since it only takes a couple of repairs to do so in some cases), but there may be more to the value equation than that.

Two excellent posts. I'm on Team Never Buy It, but these 2 comments offer great insight to people considering an extended warranty. Also to be factored in, if financing the whole purchase, are you paying interest on the price of that warranty adding cost which could possibly change your decision on the cost to benefit ratio.

 

[MrMCar]

There's a lot to take into consideration. First and foremost is that the insurance company (Kia financial ? in this case) doesn't take surveys and cost/outlay data. Rather they pay actuarial firms to do such. Then they set the price to the dealers. (Pay attention here) Then it's up to the individual salesperson/sales mgr./dealer principal/potential sales incentives to determine the selling price. Talk to 10 people that have bought at different times/locales, there will likely be a different price for all of them. Negotiate, negotiate my friends!

Having been on the receiving end of payment for said warranty work (both at the dealer and in my shop) there is a HUGE difference between that of a manufacturer backed VS that of a 3rd. party warranty. Most (not all) 3rd. party will not pay; Diagnosis charges, full shop labor rate, often stipulate aftermarket parts and/or supply them to the shop, State dependent, may not pay the sales tax.

The factory backed warranty uses dealer (genuine) supplied parts. It often can include a loaner car.

When my customers asked if I would fix their car under their aftermarket warranty plan? My response was always: I will go to bat for you one time. I will NOT install inferior parts. Furthermore; if hypothetically; XX repair comes to $1,000, and the warranty company will only pay $659, YOU are responsible for the remainder. Some companies are decent, most suck and two of them, I stopped dealing with.

As for myself and the two newer cars we now own, I'm going in and negotiate as best as possible. I want the extended warranties. Given my knowledge of vehicles in general; Chances are at the very least, I'll break even...

 

[Williamtell]

There's a lot to take into consideration. First and foremost is that the insurance company (Kia financial ? in this case) doesn't take surveys and cost/outlay data. Rather they pay actuarial firms to do such. Then they set the price to the dealers. (Pay attention here) Then it's up to the individual salesperson/sales mgr./dealer principal/potential sales incentives to determine the selling price. Talk to 10 people that have bought at different times/locales, there will likely be a different price for all of them. Negotiate, negotiate my friends!

Having been on the receiving end of payment for said warranty work (both at the dealer and in my shop) there is a HUGE difference between that of a manufacturer backed VS that of a 3rd. party warranty. Most (not all) 3rd. party will not pay; Diagnosis charges, full shop labor rate, often stipulate aftermarket parts and/or supply them to the shop, State dependent, may not pay the sales tax.

The factory backed warranty uses dealer (genuine) supplied parts. It often can include a loaner car.

When my customers asked if I would fix their car under their aftermarket warranty plan? My response was always: I will go to bat for you one time. I will NOT install inferior parts. Furthermore; if hypothetically; XX repair comes to $1,000, and the warranty company will only pay $659, YOU are responsible for the remainder. Some companies are decent, most suck and two of them, I stopped dealing with.

As for myself and the two newer cars we now own, I'm going in and negotiate as best as possible. I want the extended warranties. Given my knowledge of vehicles in general; Chances are at the very least, I'll break even...

Mind sharing which companies you refused to deal with and which you had good experiences with?

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[MrMCar]

Mind sharing which companies you refused to deal with and which you had good experiences with?

For a multitude of reasons (defamation and memory included) I can't. I somehow knew this question would arise... Kudos to you. Best practice: Ask your repair shop.

 

[Williamtell]

I'm interested in buying an extended warranty. Is the pricing standard for a 2022 Telluride?

You’ll find the prices are all over the place. They’re also often negotiable.

 

[Williamtell]

Purchasing a new Telly right now and of course they are wanting to sell an extended warranty. Cost of about $1800. Say it would extend the electronics (among other things) to 100k miles. Typically don’t buy them but what do others think?

Try negotiating. It’s not unusual for asking price to be lowered.

 

[Katy_Tell]

Well, well, well. Very interesting discussion. I have to say, I agree with a lot that has been said about this, and, what has been discussed on other threads. I am not an expert on this, but, from experience…

First off, not to blame the little lady, we bought 3 Hondas since 2005. 1 Pilot and 2 CR-V’s. My wife persuaded me to buy the extended warranty for each of them. Let’s just say she made me an offer that I couldn’t refuse.

How many times did we make a claim on them? NONE! Zero, zilch, nada, etc., etc., etc.

So, about $4500-5000 wasted.

Currently, with our 2021 Telluride, the 36 month has expired. NEVER HAD TO TAKE IT IN FOR ANYTHING. Do we have an extended warranty? Yes. See above Honda paragraph for why.

Bottom Line. Never had to use them.

But, now for the rest of the story. A salesman, on this forum, said that in his opinion, the reason to buy a warranty is “Peace of Mind.” Or, better put in the form of a question, how important is ‘Peace of Mind’ to you?

So, upon purchasing the Telluride, I declined the warranty offered by our finance guy, and after facing the astonishment from my wife, I negotiated a deal. I told her I would look into it. So, I priced Kia warranties at various dealerships, and found one (Muncie, Indiana), that sold the exact same warranty, with no deductible, for $500 less than the next cheapest place. I bought it.

So, I satisfied my wife’s desire for ‘peace of mind’, while not being screwed as badly by “the Man”.

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[KMiles]

Well, well, well. Very interesting discussion. I have to say, I agree with a lot that has been said about this, and, what has been discussed on other threads. I am not an expert on this, but, from experience…

First off, not to blame the little lady, we bought 3 Hondas since 2005. 1 Pilot and 2 CR-V’s. My wife persuaded me to buy the extended warranty for each of them. Let’s just say she made me an offer that I couldn’t refuse.

How many times did we make a claim on them? NONE! Zero, zilch, nada, etc., etc., etc.

So, about $4500-5000 wasted.

Currently, with our 2021 Telluride, the 36 month has expired. NEVER HAD TO TAKE IT IN FOR ANYTHING. Do we have an extended warranty? Yes. See above Honda paragraph for why.

Bottom Line. Never had to use them.

But, now for the rest of the story. A salesman, on this forum, said that in his opinion, the reason to buy a warranty is “Peace of Mind.” Or, better put in the form of a question, how important is ‘Peace of Mind’ to you?

So, upon purchasing the Telluride, I declined the warranty offered by our finance guy, and after facing the astonishment from my wife, I negotiated a deal. I told her I would look into it. So, I priced Kia warranties at various dealerships, and found one (Muncie, Indiana), that sold the exact same warranty, with no deductible, for $500 less than the next cheapest place. I bought it.

So, I satisfied my wife’s desire for ‘peace of mind’, while not being screwed as badly by “the Man”.

I've seen the same opportunity on forums for other cars where a dealer in another state has realized that they can do a lot of volume in warranty sales by offering a reduced price vs. your local dealer. If you really want an extended warranty it is worth taking time to shop around.

 

[Exaggerbator]

Two excellent posts. I'm on Team Never Buy It, but these 2 comments offer great insight to people considering an extended warranty. Also to be factored in, if financing the whole purchase, are you paying interest on the price of that warranty adding cost which could possibly change your decision on the cost to benefit ratio.

I'm on the side of do not get them. I think that's a great point about people not realizing how much the warranty and add-ons actually cost when wrapped into the financing. It's also why they present the add-ons as bundles or with just the adjusted monthly payments instead of the itemized costs. Make sure you ask how much each thing is and if you are getting them make sure it's itemized on the final paperwork. We are in the process right now of buying a new Telluride and the dealer tried to sell us the extended warranty (+3 yrs on electronics etc) for ~$3500 and the protective spray for $1000. That extra $4500 adds up to an extra ~$600 if your loan is 5% for 60 months. They also might say you can cancel it at any time but it will still be in your loan so your payments won't change. I did pause for a minute and read through what was actually covered and it didn't really line up. The dealer was saying it would take care of ripped seats, cracked\scratched rims, small dings but that sure was not in the print. It really just added 3 years of coverage for manufacture-faulty electronics or hardware. I figure I'm unlikley to hit something like that and if I do it will be sooner and cost less than $3500 - *knock on wood*. Anyways, be careful. Think slowly. Don't let them pressure you.

 

[vinylhaircut]

As someone who bought an extended warranty (even though I never buy them on anything else) which has paid for itself in 90k miles, with 60k miles of coverage still to go ...

I *totally* agree that one should carefully understand what is covered and not covered, and absolutely concur that one should shop around if considering a purchase. I did NOT buy an extended warranty from the dealership where I purchased the car. I shopped, and eventually bought from Kia of Muncie after a lot of comparing and reading fine print. They have been great to work with.

As I've said in this thread, there are lots of reasons why it might make sense or not for different people. IMO, someone thinking about this should be wary of advice saying that everyone should buy them (because, for example, car repairs are so expensive these days) or that no one should buy them (because, for example, in aggregate they make a profit for the seller).

 

[JKM2009]

I just received the form letter from KIA stating that it is time to consider an extended warranty. Currently, I have 32,000 miles on our '22 Telluride. I was quoted for a 5 year, 100,000 mile, $100 deductible warranty, was $4057.
So my question to the forum is, what big expenses have owners here endured so far with their Tellurides?