My dealer offered me a 7 yr 100,000 mile extended warranty for $1695. I told him I could get it for $990 elsewhere (thanks to this site), but he said that his version comes with GPR, Guaranteed Price Protection Rate. If I never use the warranty, after 7 years I get my money back less $50. Has anyone heard of such a deal? Is it worth it?
I think this warranty essentially comes with a 1645$ deductible. The deductible applies the first time you use it. Also, assuming 10% interest rate, 1695$ put somewhere else would almost double in 7 years. So you are only getting half of your money back. In my opinion, one is better off going with the 990$ plan all other things being equal.
Good point about the opportunity cost. The other thing I considered was what if I had a $200 repair. It would be tempting to pay the bill instead of use the policy, but then that defeats the purpose of the warranty. Thanks for your input.
I got the $1700. refundable warranty since that was what my deal/distributor sells. Another thing about that warranty is if you cancel it is prorated, but from the first year onward so you will lose $700. in value before it even kicks in. Also the refund portion is not transferable. 10% always seems easy to achieve in hindsight. If you have both available and you're sure the dealer will honor them equally the discounted one seems like a better deal.