Extended Warranty Worth It?

[foilwagon]

We have 2022 Cross Turismo 4 owned since new and have had no issues with the car, other than some recall work and has 34K miles.
I plan on keeping the vehicle another 4 years and am exploring extending the warranty an additional 4 years to be co-terminus with the battery warranty (8 years).

Most warranties are just insurance policies and offered/priced for the warranty provider to make a profit, so I have never considered extending a warranty. Based on the warranty providers calculations (with supporting data) for what it would cost, generally would assume it would be better financially to self insure against future issues vs paying a premium for something that may never be needed. I just traded in my Tesla Model S (for second CT) after 8.5 years of ownership, so experienced with older, out of warranty EV ownership. Shockingly, the S had only 1 service visit over the last 3 .5 year period.

Taycan seems to be complex though with limited independent shop service options. Plus, it has 3 screens.
Therefore, curious if others find it worth paying for an extended warranty after the manufacturer warranty expires?

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[Jasper4S]

There are many threads with the same question. I suggest you use the search function and read those threads.

 

[foilwagon]

Thanks- Many of the threads were for 20 and 21 model years which are known to have many more issues from the beginning. 22 MY seems to be hit and miss and 23/24 MYs much better.
Also, wasn't sure if problem items that were replaced with the Taycans, were they re-occuring or solved. My Tesla took 5 years to "get sorted out/was a nightmare" and after that, was reliable.

But will search again.

 

[Jonathan S.]

I generally agree with your assessment in the context of, shall we say, normal cars?

But as for my 2022 4CT ... today I received an update from the body shop for a problem I've had with the front camera, which required a new wire. This goes all the way back to a deer hit on Sep 27 (with various time lags that were unrelated to the extent of the damage).

Since that new wire, the cameras have been going all wonky.
The tech is now confident of the fix, and confident that it will be covered entirely under the original insurance claim.
But if it had not been, he's heard of similar fixes costing $12k to $15k.
Even if he's off by a factor of two, I would have already been way ahead on my Porsche-branded Safe-Guard VSP.

 

[SergeyIndy]

You cannot own a Taycan without a warranty, period. Align your warranty to 8 years and 100 miles warranty of the HV battery. Any simple break down will cost you big.

I own a 2020 Cayenne for 6 years now and 60k miles and would not consider extended warranty for it, as this specific generation built like a tank with impressive reliability. The only issue I had while being under warranty was a cracked windshield washer tank, most likely VW quality part.

 

[gnr3312]

I gotta say the same thing here, peace of mind to me is worth more than saving money in the short term to losing money in the long term. Get the warranty.

 

[69Mach390]

Just like the other active thread on the subject you’re going to get very strong opinions from both sides:

People saying “never buy it,” based on general data and math.

People saying “always buy it, because I had X repair cost $X.”

Both are very passionate. Haven’t seen one person switch sides yet, despite all the statistics on one side or the anecdotes on the other.


So should you buy it?

Are you a data person or a feelings person? Pick a side!

 

[Jonathan S.]

^ I definitely switched sides! I have never bought any sort of extended warranty or service plan for anything until now. But the prospect of getting hit with a five-figure repair bill was just too much to bear.

 

[gnr3312]

^ I definitely switched sides! I have never bought any sort of extended warranty or service plan for anything until now. But the prospect of getting hit with a five-figure repair bill was just too much to bear.

+100000000

 

[69Mach390]

^ I definitely switched sides! I have never bought any sort of extended warranty or service plan for anything until now. But the prospect of getting hit with a five-figure repair bill was just too much to bear.

Seen plenty of threads about people buying warranties.

Haven’t seen one since I’ve been here about someone getting hit with an out of warranty five-figure repair bill.

The ratio of people buying warranties to people with a 5 figure bill to favor it being highly unlikely.

Sounds like you’re a feelings person if the data didn’t sway you.

I’m not paying $5k out of fear of a 1 in 20 chance of having to pay $10k. Bad odds.

 

[Jonathan S.]

Oh I'm definitely a data person, both for creds and personality.
And had this on-going camera repair not been covered by the collision repair (long story ...), I would have already gained a 100% return on my Safe-Guard payment.

 

[69Mach390]

Oh I'm definitely a data person, both for creds and personality.
And had this on-going camera repair not been covered by the collision repair (long story ...), I would have already gained a 100% return on my Safe-Guard payment.

Dealer told me it was about $5k for CPO.

CPO covers you for years 5 and 6.

What do you think the odds are of a “more than $5k repair” in years 5 and 6 that isn’t HVB related?

I already know the answer based on historical data. It’s 1 in 8.

If going purely data based, it’s a bad bet. You couldn’t have been swayed by the data. It was the fear of “what if???” That’s a feelings argument.

Don’t get me wrong, not every decision should be data based. If people literally lose sleep or stress over the “what if?” But the warranty. Life is too short to stress over finances.

 

[Jonathan S.]

^ Those weren't the numbers for my particular situation. Also a potentially big difference between expected values vs risk aversion. So I suppose that means it's all feelings-based, yet informed by quantitative factors. Purely on an expected-value basis, I would never buy any type of insurance other than liability, since I can effectively self-insure against financial losses that are limited to specific asset values (e.g., housing burning down, or car totaled), repair bills (Taycan of course), income streams for my family (i.e., my death), or backcountry rescue (for which the unlikely best choice is the UK section of the Austrian Alpine Club, go figure!).

 

[Avantgarde]

I am genuinely torn on this.

Let me try to argue both sides.

Extended warranties are essentially insurance products designed to make their providers a lot of money. Even though they look like regular insurance, they are often A LOT more profitable than traditional insurance, which is a highly competitive business. The extended-warranty market is usually much less competitive and often captive.

I used to work for a large automotive company, and I was shocked by how much insurance providers were willing to give up economically just to get the right to offer extended warranties under the official brand name through the dealership network. That alone tells you how lucrative these products are for the providers.

That’s one side of the coin. The case for extended warranties—especially for something like a Taycan:

On the other hand, warranty companies don’t pay the same prices for repairs that retail customers do. Fixing a failed camera might cost you $1,000 out of pocket, while the warranty company may only pay a fraction of that. For simple, mass-market cars, that difference probably isn’t huge. In a competitive market, you can always shop around for cheaper repairs. But for a specialized, high-tech product like the Taycan, I suspect the gap could be massive. A heater replacement might cost a customer $5,000, while the warranty company may have a pre-negotiated rate with Porsche or the dealer at around $1,000. (I dont know but speculating here). In that case, even if the warranty itself is priced very lucratively for the provider, it could still benefit the customer on an “expected value” basis. It effectively acts as an “up-front collective bargaining tool” against eye-watering list prices for complex repairs.

Overall, I’m pretty convinced that most extended warranties—for electronics, household goods, and regular cars—are economically irrational for customers. But for something as specialized and expensive to fix as a Taycan, it feels like it could be a closer call.

Even so, I’m currently leaning toward not buying an extended warranty for my car when the time comes in couple months…

 

[69Mach390]

^ Those weren't the numbers for my particular situation. Also a potentially big difference between expected values vs risk aversion. So I suppose that means it's all feelings-based, yet informed by quantitative factors. Purely on an expected-value basis, I would never buy any type of insurance other than liability, since I can effectively self-insure against financial losses that are limited to specific asset values (e.g., housing burning down, or car totaled), repair bills (Taycan of course), income streams for my family (i.e., my death), or backcountry rescue (for which the unlikely best choice is the UK section of the Austrian Alpine Club, go figure!).

Yes and no.

We wish the extended warranty payouts were regulated and mimicked insurance.

Flood insurance for example pays out 67% and the potential losses you’re protecting are in the hundreds of thousands. 2/3 payout ratio.

Extended warranty payouts average 12%. 1/8 payout ratio. And there is almost never catastrophic loss that you’re covering.

This isn’t insurance.

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