Extended Warranty Plans: Are they worth it?
The infamous aftermarket warranty option examined.
When I bought my Porsche 911 back in June one of my fears was that an eye-watering bill was lurking in the shadows, waiting to pounce. Anyone who's spent any time considering an older Porsche 911 will have heard horror stories of IMS bearings, Rear Main Seals and more. These issues CAN destroy an engine and the rebuild can cost thousands, especially if it's not treated pre-emptively.
As part of the deal to buy the car, the dealer agreed to place an aftermarket warranty on the car.
Now since June, I'll be honest... Nothing has gone wrong. I think the exhaust might have developed a tiny hole or crack, but I actually like the sportier sound! So I'm leaving it. I'm not actually 100% sure it's got a problem, it might just be a loud exhaust and I was so giddy with excitement at getting the car that I didn't notice it at the time.
It does like a sip of oil, particularly if I've had a week of extended periods of spirited driving.
Bottom line is, it's working fine. I DID pay for a professional Porsche inspection before I bought it, so I'd have expected nothing less, but there you go.
Fast forward to now:
The warranty company have just been on the blower to convince me to extend my warranty. Whether I should do this or not; I don't know. The company the warranty was with is called Direct Recall of the WMS Group Ltd. Effectively it's the WMS Mechanical Breakdown Insurance product.
Within the product there are various options of the level of cover you want, from 2 star up to 5 star.
• 2 Star Cover Features and benefits included automatically (full details on page 11 of this policy). Cover includes items under the following sections: engine, manual gearbox, automatic gearbox, drive system (front/rear), electrical, brakes, steering, cooling system, casings
• 3 Star Cover Features and benefits included automatically (full details on page 12 of this policy). Cover includes items under the following sections: engine, timing belts, manual gearbox, automatic gearbox, differential, brakes, propshaft, wheel bearings, steering, suspension, fuel system - petrol/diesel, cooling system, electrical, casings.
• 4 Star Cover Features and benefits included automatically (full details on pages 13 and 14 of this policy). Cover includes items under the following sections: engine, timing belts, manual gearbox, automatic gearbox including casings, turbo, drive system ( front/rear), brakes, steering, cooling system, propshaft, fuel system - petrol/diesel, front/rear suspension, wheel bearings, electrics.
• 5 Star Cover Features and benefits included automatically (full details on page 15 of this policy). Cover includes: During the specied period almost all of the original manufacturer’s mechanical and electrical components of the vehicle are insured against total failure except those listed under exclusions. Full terms and conditions as set out in the policy document
Significant Exclusions• Items not listed as covered are specically excluded except plan 5 (excluded parts list applies).• The policy does not cover wear and tear, inherent faults, faulty workmanship, cracked blocks, cracked cylinder heads, burnt valves, carbon build up, corrosion, fabric and stitching, oil and fluid leaks, water ingress, accidental damage to radiator.• This policy does not cover consequential damage, damage caused to any covered part if in the opinion of an independent engineer, that damage could have been prevented by stopping sooner; i.e. at the point that a fair and reasonable driver should have been aware of a problem. In the case of damage to a non-covered part, our liability will not include the cost of replacing these parts.• Failure to observe the following will invalidate your claim: a) Frost protection b) Correct claims procedure c) Servicing.• This policy does not cover damage caused by negligence, i.e. insufcient oil or water, overheating, or failure to ensure that minimum damage is incurred by taking preventative measures.• Any vehicle modied from the manufacturers’ standard specication including a change in the fuel system to use an alternative fuel.• Vehicles used for hire and reward or used for racing or competition.• Timing belts unless manufacturer’s replacement recommendations have been complied with
Wow... That's a lot of bunf.
It is! So that means no using my 911 for Uber then! I noticed in the small print that the maximum claim is £1000 and the policy is available for cars up to 5 years old. When I quizzed the lady trying to flog me the policy on this, she clarified telling me that as my car is a 'Prestige' car the limit £5000 and that age limit didn't apply.
So what is the cost?
The cost for 12 months cover on the 5 star level, with a £5000 single claim limit on a 15 year old 911 is.... £74.90 per month, working out at £898.80 per year.
SO! Are you tempted?
Well here's the thing, I sort of am and I sort of aren't. I don't like the restriction of it being kept to manufacturers original specification. I had it my head when the exhaust needed replacing I might swap the standard for a stainless system with a longer life. I'd also got in my head that if the engine started to seem a bit tired and needed some attention I'd get the Hartech 3.9L Engine Rebuild taking it up to 380 BHP. The suspension is okay, but it's seen better days, but as it's got the optional PASM I'd probably stick to stock Porsche for that though.
The other caveat is the cost. Parts on Porsches are either about normal, expensive or obscenely expensive depending on what they are. The killer though tends to be the labour. There are a lot of jobs which require you to remove the transmission, the engine or both to address. Because this is so expensive, and time-consuming it's customary to replace as many cheap parts as you can while the engine is out in the hope of preventing it needing to come out again. Hence, the several thousand pound bill every few years.
I also fear trying to make a claim on one of these policies. An insurance companies remit is to look for reasons to refuse a claim. How many times they can successfully avoid paying out is probably representative of that companies profit margin.
The absolute WORST case scenario is you requiring a new engine. The cost of the engine and the labour to remove and install the new one is going to be around £10,000. So this policy wouldn't cover that.
If you needed an engine rebuild Hartech offer complete removal, refurbishment and re-installation for £3600 so this in theory MIGHT cover that?
The present Mrs. Stanley thinks the cost is too high for this to be worth it. I'm in the fortunate situation of having a father-in-law who not only likes tinkering with cars, but is also very good at it and owns a garage with a proper pit.
I can see how for many people, an aftermarket warranty on a prestige car makes sense. For me personally though? I'm not so sure...
But what do you think?
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