Re: ARTICLE: Extended Warranties. Yes or No? Quote:
Originally Posted by Ashley2 What actually happens is, with the additional amount we pay, manufacturer buys an insurance policy which covers the failures of the car. And in case anything fails, the insurance agency will pay the money.
Few weeks back, Tata motors has announced 4 years warranty in their heavy commercial range of trucks and buses.In this case, its a large scale insurance where in any failures above standard warranty of 2 years will be covered by the insurance company. Infact product discounts where reduced after the 4 years warranty announcement and the same is used for insurance.
So my point of contention is warranty cannot be taken as the confidence of the manufacturer and its purely a marketing tool. |
Agree mostly and Disagree on just a few minor points.
Warranties are indeed a Marketing Tool to some extent, but they are also required for Customer Satisfaction at times (if say the vehicle has higher than normal issues and )the company actually wants to support the customer and assure him of their backup they need to take care of issues under warranty for a higher period. The higher number of issues could possibly relate to a newer model or quality issues withing the company or just coping with Indian environmental and fuel conditions (SKODA - had to increase warranty from 2 to 4 years after a lot of the earlier lot of Laura's developed significant issues post 1.5 years or rather after about 45,000 kms. TATA and Mahindra do have higher rate of issues with the Safari Dicor, Aria, XUV500 etc. and the customer putting in that kind of money needs a certain assurance of not being left high and dry in event of a significant issue at say 90,000 kms and 3 years.
How the extended warranties are funded and what they cover is a separate topic that does not really matter. It is kinda like buying insurance (in some cases that is exactly how the warranty is funded internally) and just as a person with not that perfect heath constitution will feel the need for greater insurance (not that others should not take insurance as one never knows) similarly one does require greater warranty to be able to confidently buy some cars.
At the other end of the spectrum:
BMW's Total Coverage Warranty plans are real expensive but yet a customer buys it knowing that BMW's though great cars (like Merc and Audi) are not exactly Toyota class reliable, and if there are issues it can be a major disappointment. That maybe even helpded BMW taken an edge over Merc which have equally or more unreliable vehicle (feels odd to be refering to very safe european permium vehicles in this manner) but they did not offer longer warranty terms and many Merc owners have not exactly been ok with the issues they faced in the 2-5 year time frame for their vehicle, BMW provided an option that though costly gave more peace of mind.
Yep I guess warranties should always be bought to the max level (unless one is going to just use the car for say 5000 kms a year and that to for about 4-5 years. (Being in Warranty period does increase the resale value of a car but that is only valid if one sells within the warranty period.)
Own Example 1:
I bought a peowned Laura many years back within the warranty period and actually within 2 months required to replace the Turbo Intercooler and the Gear Shifter Switch and the Infotainment Head Unit within warranty. Later The Turbo and AC Compressor also blew and that had to be paid for as it was by then out of warranty. So though the Laura 3rd and 4th year warranties are now (not an option earlier) available more or less in the form of insurance buying them would have helped me significantly.
Own Example 2: The TATA Safari bought in 2001 did have an extended warranty option but the company contact through whome I bought it goofed up and I could not buy it later after the first 3 months had passed. - This resulted in me actually having to replace a lot of parts out of warranty after just 1.5 years or 2 years (dont remember exactly) but kept the car for 10 years and a warranty of 4 years would have helped.
Own Example 3: Aria - New Car - Original Warranty 3 years 100,000 kms Extended to 4 years 150,000 kms.
Have in the first 2.3 years been able to have a lot of parts replaced under warranty and the good bit is that the newer parts inherently tend to be of better design as TATA keeps improving on the design constantly, this will hopefully help in the future post 4 years when the warranty runs out.
Last edited by ACM : 1st March 2013 at 11:08.
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