extended warranty in Canada

[PGI007]

I have read many of the posts regarding the extended warranty issue, and I am debating this option for my 05. It has 2 years of warranty left, the last one being the dealer CPO add-on. They are offering an additional 2 years for $2500, but it will be more expensive to get as my current warranty runs out.

My question is, are there other 3rd party warranties offered in Canada as exist in the US, and is the price asked by Volvo reasonable? I would like to defer this purchase until closer to when the existing warranty is up, but if it is a good deal I may do it sooner.

I am a little paranoid about big ticket repairs like the transmission and bevel gear issues, but little things can also add up. The service records on my car showed that the dealership recently repaired some issue with the rear parking brake cable to the tune of $1200! So it is hard to estimate the average maintenance and repair costs of these recent models and what to expect after 5 years.

Some experience from fellow Canadian XC70 owners would be appreciated.

Thanks

[goldxc70]

As far as I know, most third party warranties have deductibles as well as fairly strict terms and conditions that make their value questionable. If a warranty costs $2,500, with a $1,000 deductible, and a transmission replacement costs, say, $4,000, I would question the value of the warranty. Plus, the warranty company decides where you can get the work done. Extended warranties are, IMHO, good for everybody except the customer!

[PGI007]

The warranty offered by Volvo is an extension of their CPO 3rd party warranty with a $100 deductible per visit. The car has nearly 60 000 km on it, and based on our driving habits I expect in years 5-7 it will have between 80-110 000 km. For mileage related issues, this is not a lot so the probability of requiring $3000 worth of repairs (on an 05 which supposedly is more reliable than earlier models) is likely low. Where I may face the dilemma is when it exceeds 100 000 km in year 7 and beyond and the warranty, if obtainable, is more costly. Ah, the wisdom of preventive maintenance!

Just wondered what others in Canada were doing about the warranty issue.

Cheers

[wgriswold]

It seems clear that statistically the warranty is a bad deal. Volvo knows how many parts will fail in the cars they sell. They take this expected expense add their costs of providing the warranty and a lot of profit and sell individual policies.

I make the decision to buy insurance and extended warranties on the basis of can I afford the repair. Sort of like my house insurance. Statistically house insurance is a bad deal. The insured group pays all the cost of fires plus the costs of the insurance industry and profit. But I could not afford the cost of replacing my house so I buy insurance. My Volvo is at the upper end of what I can afford in repairs so I don't buy the warranty.

[Forkster]

Ditto on that wgriswold. I live in Canda and the CPO add-on extended warranty on my04 with a $100 deductible was $4100 including tax. If I have $4100 in repairs on a vehicle 4 years old, I'm going to be pretty P.O'ed at Volvo. Smaller items like bushing and other 'common' wear items I can live with - plus I'm fairly comfortable doing my own work.

But seriously, if you can afford it without question and can't be bothered with the occassional issue that crops up, then spend your money away. But $$ to donuts, I highly doubt you'll spend $2500 in repairs in 3 years - Volvo is counting on it otherwise the warranty would cost a lot more.

[PGI007]

Good points. Insurance companies set premiums carefully to ensure they make a healthy profit, statistically. I was coming to the conclusion that >$3000 in warranty-covered repairs in that 2 year span is unlikely if I take good care of it. If Murphy's lawyer pays a visit, well so be it. The wife immediately declined the extended warranty, so now I am comfortable in once again saying she was right...

[mlagersson]

Well here is my side of it.
In 2006 I bought a 2002 S60 2,4t and I opted to go ahead and get the extended warranty and sure enought, in the first year of the extended warranty, things started to go wrong, transmission change, radiator change, and head gasket change plus small things here and there. The total amount that I got fixed through my extended warraty was a whopping 10,253. Now I do realize that its not expected to happen to each car, but an warranty is not for you to get free repairs, its just in case you get that car that has the extra problems, you dont sit on the ****ter and regretting buying the car.
Just like any insurance, life, auto what ever you pay probably more in auto insurance in your lifetime that it would cost to fix it in case something happened. Its for many people to share the cost of the few individuals that does get problem. And sure there is a profit, but come on who would provide a service in this day and age if there is no money in it??

Im looking to buy a 2003 xc70 and I am buying a 3 year extended warranty, its a small monthly cost on top of everything, for even a chance of some piece of mind.

[KILOFINAL7]

PGI007, I would probably get the factory extended warranty if I was planning to keep my car longterm. I drive a 2004 XC70 which I bought used last month. The previous owner had the extended warranty and I found out that alot of work was done at the volvo dealership.

I bought the car because I knew it was serviced at the dealership after the factory warranty was over. I think $2500 is a pretty good deal considering the costs can rack up as we all know.

BTW, I grew up in Guelph. Lived there for 35 years. I also owned a 2005 XC70 Titanium Edition. Very nice car with the xenons and dynaudio. Really nice package.

[PGI007]

Well, seeing as this old thread was resurrected I thought I would give an update just out of interest. The 3 years have just ended, so if I had purchased the added 2 year warranty it would have expired last month. When the initial CPO warranty ran out I took it to the dealer to see if there was anything that needed repairs while still covered, and they resealed the bevel gear plus a couple of minor things to the tune of $1300 (no cost to me). Since then I have only had to repair a tie rod and replace the breather box hose for a total of <$250, and I'm not sure if these would have been covered under the extended warranty anyway. So, luckily I fell on the broad side of the statistical curve and saved myself over $2000.

We'll see what the next 3 years bring!