Second hand car warranty from third parties

kgng1000

I have just bought a Volvo XC 90 2016 plate secondhand, and I’m now considering purchasing a third-party warranty cover from the likes of warranty wise or warranty direct. 

I just wanted to check whether anyone has used these services and whether they are worth the money? I was quoted a three year insurance deal for £1500, which seems fairly reasonable, considering that most parts from Volvo would cost in excess of £600 and labour is about £145 per hour from an approved Volvo garage. I also got a quote from Volvo for their extended warranty for £800 for 12 months which is a lot more than from third party but reasonable if anything were to go wrong in the car. 

Having read some of the other posts in this forum, most of the advice is to save the money in a bank account in case of a rainy day rather than buy third party warranty. Most people also recommend buying manufacturers extended warranty as this is most likely to be paid out.

However, at £800 a year I feel like it’s probably better to save this for a rainy day rather than buy the warranty from Volvo. But at £1500 for a three year third-party warranty, this sounds more reasonable to purchase.

So just wanted to check with this forum to see if a third-party warranty is worth the expense.

jimjames

Personally I would say it's not worth the money. Insurance companies are out to make money not be a charity so they obviously think it would be less than that cost to fix things.

You say "if anything goes wrong" which suggests you think the warranty would cover any faults. Look at the things that could go wrong that are not covered and you'll probably agree that putting the money in the bank is a better option. £1500 will get you a lot of repairs including things not covered under the warranty like clutch. You also will have a choice of garages to use. I can't believe you'd be able to use a main dealer for a £1500 warranty repair. 

My car is over 10 years old and the only thing I've needed to repair in the last 3 years was a sensor that cost £300. That might well have been covered under your warranty but you're still £1200 down compared to keeping the money in the bank.

SaverRate

I’d go for the Volvo warranty or save the money. Wouldnt recommend a third party warranty 

Grey_Critic

Question you need to ask yourself **Do I feel lucky** Not about the car but the warranty. I do comment on warranty problems but not much even though I was a warranty Manager for Ford and Iveco for 15 years plus I have experience with SEAT Daihatsu and Mazda warranties besides many of the third party warranties.

Read the policies - do you understand the jargon? If not get some advice. Many of the 3rd party warranties would be best hung up in the toilet for some light reading. If you still want to go ahead then based on names the Volvo one is best but my question would be is it Insurance based with the Volvo name or is it Volvo themselves.

As some have said you might be better putting your money away for the rainy day. And you never know if you are lucky all may be right with the car and you have £800 in the bank

Ectophile

kgng1000 said:

However, at £800 a year I feel like it’s probably better to save this for a rainy day rather than buy the warranty from Volvo. But at £1500 for a three year third-party warranty, this sounds more reasonable to purchase.

You're making the assumption that the warranty will pay out if anything goes wrong.  In reality, the warranty will have a big list of exclusions, and they will tell you that one of those exclusions applies every time you try to make a claim.

Grey_Critic

Ectophile said:

the warranty will have a big list of exclusions, and they will tell you that one of those exclusions applies every time you try to make a claim.

One of my favourite exclusions was *External oil Leaks* The fact that there is no such thing never stopped them being refused.

I only ever came across one where they paid out. The term leak is self explanatory - in the case of fluids it is due to the failure of a seal allowing fluid to flow from inside to the outside.

The customer simply instituted legal proceedings and the warranty company quickly had a rethink and paid out.

Goudy

I can understand your thinking regarding this model.
The XC 90 does tend to stick out as being more problematic than the rest of the Volvo range.

Apart from the fact onwers complain of horrendous tyre and brake wear, they do tend to suffer from a fair few well documented maladies.

Plenty of sites have listed the main problems which are mainly emission, cooling, suspension and turbo related.
Another one is the door lock motors tend to screw up, a lot.

With any warranty there will be plenty of exemptions, these will often be related to life limited parts, like brakes and clutches and others that cover use, like they think the emission system is clogging up as you aren't using the vehicle properly.

You need to read up on both the common problems and the warranties small print and try and work out if any are worth it as the chances might be that you spend out between £800 to £1500 on a warranty and the first problem it has is one that's not covered and costs twice as much to fix, plus you forked out on the warranty.

For some of these problems outside of warranty you might get some "help" from Volvo with a Volvo warranty and full Volvo service history, perhaps a search of some Volvo forums might shed some light on this, though it's worth pointing out they usually don't have to.

Another option could be just to bank the money.
This might be a good option if you can find a local Volvo specialist that knows the model well.
They are often half the price on labour and will often access to cheaper OEM parts and other services that a Volvo dealer won't consider, say like a turbo refurbisher.

user1977

I would go with my usual principle of only insuring for stuff which I couldn't otherwise afford to pay for - so would you actually have difficulty covering the cost of repairs without such a warranty? 

prowla

Grey_Critic said:

Question you need to ask yourself **Do I feel lucky** Not about the car but the warranty. I do comment on warranty problems but not much even though I was a warranty Manager for Ford and Iveco for 15 years plus I have experience with SEAT Daihatsu and Mazda warranties besides many of the third party warranties.

Read the policies - do you understand the jargon? If not get some advice. Many of the 3rd party warranties would be best hung up in the toilet for some light reading. If you still want to go ahead then based on names the Volvo one is best but my question would be is it Insurance based with the Volvo name or is it Volvo themselves.

As some have said you might be better putting your money away for the rainy day. And you never know if you are lucky all may be right with the car and you have £800 in the bank

Picking up on the "do you feel lucky?" comment: a warranty is actually a bet: you are betting that the car goes wrong and the provider is betting you it doesn't.

jimjames

user1977 said:

I would go with my usual principle of only insuring for stuff which I couldn't otherwise afford to pay for - so would you actually have difficulty covering the cost of repairs without such a warranty? 

But also bear in mind that even with such a warranty you are likely to still need to pay for repairs which are not covered by the warranty. So if cost of repairs is difficulty then putting the money into savings would be a much wiser idea.

prowla said:

Grey_Critic said:

Question you need to ask yourself **Do I feel lucky** Not about the car but the warranty. I do comment on warranty problems but not much even though I was a warranty Manager for Ford and Iveco for 15 years plus I have experience with SEAT Daihatsu and Mazda warranties besides many of the third party warranties.

Read the policies - do you understand the jargon? If not get some advice. Many of the 3rd party warranties would be best hung up in the toilet for some light reading. If you still want to go ahead then based on names the Volvo one is best but my question would be is it Insurance based with the Volvo name or is it Volvo themselves.

As some have said you might be better putting your money away for the rainy day. And you never know if you are lucky all may be right with the car and you have £800 in the bank

Picking up on the "do you feel lucky?" comment: a warranty is actually a bet: you are betting that the car goes wrong and the provider is betting you it doesn't.

And the house always wins!

Herzlos

Manufacturer's warranty is more likely to actually cover something, and for the price difference probably the better option.

But on a 6 year old car almost everything will be denied as "wear and tear".

Does it have a full Volvo service history at all the correct intervals? If not then forget getting a warranty.