Extended Warranty Worth It?

[tonykara]

Wife bought an extended warranty on her 22 CT4, right before the warranty ran out. $4.3k is cheap compared to what a repair could cost. Just makes sense for another 4 years of peace of mind.

$4300 for 4 years in the US? Was that their Platinum protection?

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[tbinmd]

$4300 for 4 years in the US? Was that their Platinum protection?

yes, 96 months (includes the original warranty 4 years), 60k miles Platinum VSP, $4176. via Kelli at Porsche San Antonio. cheapest we found for coverage.

 

[Rathje]

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…

I agree to your thoughts. And I will add that buying such an expensive car you should always set aside an amount for unforseen things. I budget with 10% on top of the car price for unforseen things during ownership. Usually I get positively surpriced. Even an expensive repair at some point is not that much if you even it out during ownership.
But that's just me - I'm both data and feeling person and both parameters tell me not to extend warranty. I will take the heat.. if..
Best regards
Lars

 

[sacman]

If you take the $$ and put it down on the S&P for the next 4 yrs might come out on top for any repair. I'm just spitballing.

 

[gamueller]

If you take the $$ and put it down on the S&P for the next 4 yrs might come out on top for any repair. I'm just spitballing.

Had you done that 4 years ago, sure. Now? Moneyloser.

 

[Dabz]

If you take the $$ and put it down on the S&P for the next 4 yrs might come out on top for any repair. I'm just spitballing.

Certainly wouldn't be investing in US stock right this minute...

 

[kelliporsche]

Thank you all for the recommendations on this forum—I really appreciate you taking the time to share them. They’ve been very helpful, and I’m grateful for the feedback. For anyone interested in a Porsche extended protection plan, I’m more than happy to answer any questions or provide additional details.

Kelli Parker
[email protected]

 

[snstevens]

Here’s another data point on why an extended warranty is a good idea. In this case, the OP had a bad inverter.

And here’s another where about a bad headlight might cost a couple grand.

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