Extended Warranty Worth It?

[69Mach390]

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…

While warranty work pays lower labor rates and has less markup than we pay…… the difference is nowhere near as large as you’re suggesting above.

Even if they paid half (it’s not that much of a delta), that would only bring the payout ratio equivalent to 24% (about 1 in 4), definitely not enough to make it a good deal, but you do make a fair point to consider in “the math.”

Counterpoint- I rarely recommend doing out of warranty work at a dealership. They charge significantly more for parts and labor than independent shops. Of course it may be hard to find an independent to work on the Taycan, but they exist. That would help the math on paying the out of of pocket costs.

Extreme example would be replacing the HV battery out of warranty. At the dealer? $30-50k.

Independent shops for EV? Could do a refurbished battery for $10k.
Of course the extended warranty doesn’t cover it either way, but was just an example of price differences at the dealer.

12v battery not much different. People have been quoted $3k to replace at dealer. You could have another shop swap out an AGM battery for $500 or less. (Another thread discussing this now).

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[snstevens]

See my thread from May 2025 for my 2021 4S here.

I’m both a data and feelings guy. Made sense to buy an Extended Warranty for both sides of my personality. Cost was reasonable ($4,676), and since it is insurance, if I sell the car I can get some of the fee back.

 

[Tooney]

The number of 'extended warranty worth it?' threads may reach 'Porsche Connect not connecting' threads level soon.

 

[Jonathan S.]

This isn’t insurance

Agreed, it’s not an insurance policy, but it’s the same analysis of whether to effectively self-insure against a financial risk or instead purchase some sort of contract.

 

[69Mach390]

Agreed, it’s not an insurance policy, but it’s the same analysis of whether to effectively self-insure against a financial risk or instead purchase some sort of contract.

Yes, but the math is waaaaay different.

In comparison, insurance covers catastrophic (complete) loss and has significantly higher payout rates.

The closest comparison would be like Aflac policies. They pay you $200 if you break your arm and are relatively quite expensive when you look at payout rates.

Very different than your health insurance that will cover you for a $500,000 hospital stay.

If you do any analysis on extended warranties, self-insure should be the only conclusion.

But if instead it’s a “feel good, sleep better without worrying about a possible repair bill” situation. That’s fear based on anecdotal stories, not the complete stats.

I’ll say it again though, if you have real anxiety and/or lose sleep at the thought of paying cash for a repair in year 5 or 6, buy it. You’ll probably lose money 7/8 of the time, but you’ll sleep better.

 

[Red4S]

I purchased the 4 year extended to also run with the battery. Very reasonable price of $2,500.in the USD; assuming you negotiate a substantial discount from the dealer. Although I have had no problems, other than battery cells and recalls on my 2020 4S, I would not leave home without the extended warranty.

 

[Dee]

Many of the threads were for 20 and 21 model years which are known to have many more issues from the beginning.

There is no specific model year with more or less issues.
The first Taycans had issues cuz they were new back then!
The issues were solved by s/w updates, like the draining 12V battery.
Most common issue on ALL Taycans are the 22kW OBC and HV heater.
And the funny thing is, the early Taycans didn't even had the 22kW OBC but the 11kW OBC which is much more reliable.

I have an early Taycan and I'm out of warranty cuz I'm driving less than 5000 km/year now (I'm 58, retired), that's not enough km to justify the cost of the extended warranty.
Best car I've ever had, no major issues.
It'll be 6 years soon, I just love it, that's enough.

 

[Jonathan S.]

I sure hope that the chance of losing money on the life insurance for my wife and myself is more like 7.99999 out of 8.

Meanwhile, had I not lucked out in a way with the deer hit covering my camera failure, I would have been looking at a high four-figure (at least) bill, which Safe-Guard would have covered but for the $500 deductible.

 

[Dee]

I would have been looking at a high four-figure bill

If you didn't have insurance you wouldn't have hit the deer.
If you change one variable, the outcome is different.

 

[SoccerMan94043]

The number of 'extended warranty worth it?' threads may reach 'Porsche Connect not connecting' threads level soon.

Wait till they morph into "I can't connect to the extended warranty company".

 

[Jonathan S.]

If you didn't have insurance you wouldn't have hit the deer.
If you change one variable, the outcome is different.

And the irony is that I was travelling to a safety-related event (ski patrol annual refresher training for instructors in avalanche safety and mtn travel/rescue).

The good part is that my Taycan probably would have been totaled were it not ... a Taycan, with the ability to pull of a crazy fast swerve yet still maintain control, such that the deer hit was only a glancing blow. Otherwise, might have been head-on.

 

[B61]

I’d never own Taycan without warranty.

 

[Stan]

Some great posts in this thread. In particular, the 'numbers' vs 'feelings' discussion. I'm a numbers guy and have almost never bought extended warranties. For my '22 CT, my big decision is first, whether to keep the car when the lease ends in 2 years, and if I do, whether to buy an extended warranty. A couple thoughts that haven't been mentioned:

For those who believe the 'numbers' are correct (i.e. self-insure if financially better) but 'feelings' getting in the way (i.e. can't sleep with the thought of a 5-figure repair), what about formally self-insuring by actually socking away the money that you would have spent on extended warranties. Then, you might be able to sleep knowing that you've got $10k saved specifically for Taycan repairs.

I've gone through the thought process that if I owned a Taycan without warranty and a big, big repair came up, and I felt like I was being robbed, I would just walk away from the car, perhaps sell the 'broken' car to a 3rd party or a Porsche dealer for scrap. I assume that most forum members are in a similar bout in that they're not reliant on this car as a daily driver.

One other variable in this discussion is the cost of the extended warranty. From other posts, I've seen prices as low as slightly less than $1000US per year. I was told that a 2yr extended warranty from my dealer would cost about $5000CAN for 2 years. I'll certainly shop around when the time comes, but I'm not too optimistic.

A bit unrelated, but having researched in the internet before getting my car, I decided to lease for the first time, to give me 'a way out' in case the car or just being a Porsche owner didn't pan out. And admittedly, this 'requirement' that one must have an extended warranty is souring my enjoyment of the car a bit.

Stan

 

[snstevens]

what about formally self-insuring by actually socking away the money that you would have spent on extended warranties?

First let me say that in general I'm a fan of self-insurance. A great example of when to self-insure is as an alternative to Long-Term Care insurance. Sounds great on the surface, but the price is always going up at renewal time, and there is no guarantee they will honor the policy (or be in business) when the time arrives you need the coverage. Oh, and you can't get any premiums back and there is no accrued value.

Auto repair is different in my mind. Your needs are near-term, and the cost of the technology on a Taycan makes even "simple" repairs expensive. Example: One day your matrix headlight stops working or goes on the fritz. No accident or other cause like vandalism to blame. You check out prices and the cost of the headlight itself is $1,800 (see here). On top of that you have to have it installed which is probably another $1,500 - $2,500 depending on whether you are at a dealer or not. For me that is getting close to the price of my 4 year policy ($4,676), and it is just a single repair.

if I owned a Taycan without warranty and a big, big repair came up, and I felt like I was being robbed, I would just walk away from the car, perhaps sell the 'broken' car to a 3rd party or a Porsche dealer for scrap. I assume that most forum members are in a similar bout in that they're not reliant on this car as a daily driver.

Well, this is a hard one for me to stomach. Walking away would probably cost way more in diminished value than the policy I got. And while I know this is technically NOT an insurance policy, it does have the advantage that if in a year or two I want to upgrade (which I will) to the latest model or a nice CPO, I'll get half my money back.

 

[69Mach390]

I purchased the 4 year extended to also run with the battery. Very reasonable price of $2,500.in the USD; assuming you negotiate a substantial discount from the dealer. Although I have had no problems, other than battery cells and recalls on my 2020 4S, I would not leave home without the extended warranty.

Ok, even though I’m in the “usually don’t buy it,” crowd…….

If you can get bumper to bumper for 4 years (years 5-8) for $2500, that’s actually tempting.

When I was shopping for my used Taycan, the Porsche dealer told me $6,000 for 2 years CPO. That was an easy “no” for me.

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