Let's talk car warranties...

"MentalJuggernot" (MentalJuggernot) 12/09/2013 at 00:38 • Filed to: None

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The way I think about it, 4 years and 50,000 miles is standard. This means anything above that is commendable, and anything below is unacceptable. Why, then, does two of the largest automakers still offer such low warranties (Ford & VW with 3 years, 36k)? I mean, I can get the economic advantage of it, but image and reliability wise doesn't that speak volumes to the faith the automaker has in their car? And, consequently, doesn't that speak volumes to how much faith I should have in the car?

I drive a hell lot anyway (22k/yr) so the warranty on a new car or slightly used even wouldn't last me all that long, but it instead speaks more about the automaker's build quality. Is anyone with me here or am I missing something obvious?

ktfright | Kinja Neighborhood Black Guy > MentalJuggernot 12/09/2013 at 00:48

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I see where you're getting at...

I drive from South Bay (Hawthorne, CA) to Cal State Northridge 2-4 days out of the week for school, and I usually rack up 4,000-5,000 miles a semester, so on avearge I would do about 8,000-10,000 in a year give or take. My car is a '94 Altima, so it isn't completely the same thing, but I think there is something wrong with such a small warranty for completely new vehicles. Mybad if I went into a tangent :)

Textured Soy Protein > MentalJuggernot 12/09/2013 at 00:48

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Here's how I see it.

The car companies with the longest warranties like Hyundai and Kia started offering those warranties BEFORE they had established a reputation for reliable cars. It was a marketing idea to get people to consider cars with a somewhat shaky image. "Hey don't worry if you think this car might be a piece of crap, it's got a 10 year warranty!"

Isuzu offered a similar warranty, after their sales tanked when Consumer Reports published a story about the Trooper being unsafe because it would roll over in emergency handling maneuvers. "Hey don't worry if you think this car might flip over, it's got a 10 year warranty!"

Providing warranty coverage costs money. Spending more money on longer warranties, helps sell more cars. If car companies are selling the amount of cars they want to sell, they don't need to spend more money on longer warranties. And if they want to boost sales, they can spend money in other, more temporary ways like rebates and other incentives. Whereas a longer warranty is by its very nature a longer term commitment.

MtrRider Just Wants Doritos > MentalJuggernot 12/09/2013 at 00:52

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Aren't most cars 3/36 standard? They all have optional extended warranties as well. If you're worried about it try to get the dealer to give you the 10/100 warranty.

Team6.1 > MentalJuggernot 12/09/2013 at 01:16

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Based on my retail warranty experience for landscaping/irrigation/equipment, for the most part customers are fucking stupid and equate "it broke" to "automatic free replacement". Running a leave blower with no air filter then expecting a warranty when you fry the piston...Broken rake handle with tire marks on it.
I see longer warranties as a marketing ploy, and especially expensive with little payoff. I think 3/36 is a reasonable timeframe for manufacturer defects to show themselves.
Then again I've never bought new because it's a waste of money. Drive it off the lot and you've already lost a couple thousand at least.

GhostZ > Textured Soy Protein 12/09/2013 at 01:19

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You hit the nail on the head.

Warranties are cheaper and more liquid than quality improvements, and consumers are more responsive to them as well.

The decision between Rebate VS Warranty is probably a very calculated and careful decision they make.

HammerheadFistpunch > Textured Soy Protein 12/09/2013 at 01:53

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its doesn't explain VW though, since they have built a reputation for poor quality from the late 80's to mid 90's, seems like they should be offering more.

Jonee > MentalJuggernot 12/09/2013 at 04:14

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Honda is 3/36 also. Companies with good reputations don't need longer warranties to sell cars.

MentalJuggernot > Jonee 12/09/2013 at 07:33

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Well Honda may be an exception (minus the civic problems they've been having in the past few years), but VW and Ford? Ford cars are great but I have a number of friends who wouldn't dare own one again past warranty because, and I quote, "past 50k they all go to shit..."

MentalJuggernot > MtrRider Just Wants Doritos 12/09/2013 at 07:36

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I feel like brand wise, more brands are 4/50 but perhaps number of vehicles on the road (Toyota, Ford, Honda) there are more 3/36...

MentalJuggernot > ktfright | Kinja Neighborhood Black Guy 12/09/2013 at 07:36

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I know what you mean - I have a 98 Boxster and an 05 S40 so warranty doesn't matter much to me until I find a new car I actually want. Until then, it's Miata + E46 M3 as the next move for me...

MentalJuggernot > Team6.1 12/09/2013 at 07:38

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True that on new cars. I definitely wouldn't get a new car unless it reached deep into my loins and said "Take me". Which so far, the F-type is the only one that's done that...

Customers are stupid true. But doesn't warranty still speak for itself on the actual faults the car may have?

MentalJuggernot > Textured Soy Protein 12/09/2013 at 07:43

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Great point. I find it funny though that Toyota and Honda both offer 3/36, but cars built on the same chassis and the similar engines in Acura/Lexus are all 4/50. It's a stark difference between the class of vehicle - "entry level" brands are 3/36 and "luxury" are 4/50. I see the fiscal sense in it definitely.

However, that also somewhat supports my argument; if the brands have less faith in their product and don't want to spend money on warranty repairs, they spend it in short term offerings like rebates to still get customers in...

MtrRider Just Wants Doritos > MentalJuggernot 12/09/2013 at 12:32

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Looking here confirms my suspicion that 4/50 is something a luxury automaker or an automaker with something to prove does. The "standard" is still 3/36 and that's what the majority of brands uses. I also do not believe it has anything to do with how reliable the cars are or how long they will last.

MentalJuggernot > MtrRider Just Wants Doritos 12/09/2013 at 20:51

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Awesome link, thanks. I'm still fairly convinced on the warranties and reliability link though.

MtrRider Just Wants Doritos > MentalJuggernot 12/09/2013 at 22:49

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I think people paying a premium for a luxury car are also paying for the peace of mind a longer warranty gives them- German cars are notoriously expensive to "maintain" after the warranty expires, which is why they have such horrible resale value. You can't pick up a SL55 for $30k because nobody wants one, but because nobody wants to keep one running. Look at Lincoln. The Ford brand has the 3/36 standard but mechanically identical Lincolns get the 4/50.