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KIA Extended Warranty Info

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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?
That seems like a lot. My extended warranty (really, an extended service contract) came from Kia of Muncie. It runs through 150,000 miles, zero deductible, and cost me a lot less than that (bought in 2020). I'm at 95k miles now and my claims have totaled just about what I paid for it. I'd connect with Kia of Muncie to see what they're currently offering for a comparison.
 
Unfortunately, there's no standard pricing for extended warranties on a 2022 Telluride. The cost can fluctuate significantly depending on several factors: the dealership, warranty provider, coverage level, term length, deductible, and your location.
 
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.
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”.
Think...its a "closed system"...much like a slot machine in a casino...money is not created no lost in this closed system...stastitically the money that goes in (aka slot machine) goes out at the same amount (to maintain the closed system)...yes some of tgat money will go to repairs...but it also goes to (a) The Finance Manager (b) The Dealership (c) The company that underwrites the warranty (who has a staff of administeative and managers who all take their cut)...so of the $100 you pay in warranty only a fraction goes to the cost of repairs that your warranty covers....you're bettrr of putting the money in a savings accoint where your $100 gets you $100+ in value...simple stats snd math.
 
Think...its a "closed system"...much like a slot machine in a casino...money is not created no lost in this closed system...stastitically the money that goes in (aka slot machine) goes out at the same amount (to maintain the closed system)...yes some of tgat money will go to repairs...but it also goes to (a) The Finance Manager (b) The Dealership (c) The company that underwrites the warranty (who has a staff of administeative and managers who all take their cut)...so of the $100 you pay in warranty only a fraction goes to the cost of repairs that your warranty covers....you're bettrr of putting the money in a savings accoint where your $100 gets you $100+ in value...simple stats snd math.

If what we were buying were a smaller consumer product like a TV, then I'd agree with your conclusion. You're certainly right that the warranty companies (and others) make a profit, and thus - on aggregate - the purchasers of these extended warranties, as a group, will not recoup all that they put in. As individuals, some will recover more than they put in (like me), while many others will have few claims and will have ultimately not received as much back as they originally paid.

But that's missing the point. The same can be said for homeowner's and auto insurance. These policies can be thought of as insurance against major expenses that might pose a serious hardship. For many, an auto is not something they can simply do without (like a TV). And sudden, unexpected expenses can pose a large financial risk for them. The cost of an extended warranty can be thought of in the same way that homeowner insurance premiums are considered. Do I feel bad that I've never had a fire or other catastrophe that has allowed me to collect more than the sum of my homeowner's premiums? No, of course not. The value of the premium is the risk reduction. That's an legitimate value regardless of whether I ever collect anything or not. This is a basic premise of business administration study of risk management.

Back to the extended warranties, it's a very similar concept. The car is an essential asset for me, and being able to insure that I won't have a major expense was (to me) worth the price the warranty. It just so happens that, currently at 105,000 miles, I've more than recovered that cost and still have $45,000 miles remaining on my coverage. But I would have been just as happy had I had no repairs whatsover. I wouldn't feel that I "wasted" the price of the warranty, because what I received was insurance against future expenses (potentially major ones).

Now, for some people, a vehicle isn't really a critical asset, so the warranty isn't as valuable. For some, the risk of a major expense isn't as concerning because they have plenty of means to fund repairs. Or they may not hold the vehicle long enough for it to make sense. I absolutely get the knee-jerk reaction to reject any offers of extended warranties. For most consumer products, I'm right there with you. For large, critical assets, though, it can be a different story for some people, and it can make perfect financial sense to absorb the cost of the warranty now in order to provide protection through the lifespan of the vehicle. Just like it can make sense to use homeowner's insurance premiums to protect against a flood or fire in the future.
 




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