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Beware of extended warranty gouging

  #1  
Old 10-15-2006, 10:57 AM
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Exclamation Beware of extended warranty gouging

Once you have agreed to the selling price for your new fit there is yet another hoop to jump thru, unless you negotiated this as part of your price.

This is how it worked at my dealership. The nice mellow salesman I was communicating with during the 4-month wait between the time I put down deposit and took delivery of the car never put any pressure on me at all. If anything, he was too low energy as I had to bird-dog every shred of info about my new car (build date, ship date, eta etc) like prying out eye teeth.

Anyway. My new car arrives and I am at the dealer to purchase it (with pre-approved financing by my credit union). The low key salesman sends me over to the finance guy who is the kind of salesperson we have nightmares about. He pulls out the hardsell on the extended warranty and the special "platinum club" membership, that purportedly would get me better treatment from the repair shop, and the ability to earn "points" by bringing my car to them for servicing etc.

I was unprepared for this step in the process and highly recommend that anyone who wants an extended warranty do a LOT of research ahead of time and have your ducks lined up ready to march. If you want Honda Care, go online and find the dealers/vendors that offer it for the lowest price. Here are some I found, (too late to do me any good though): Bernardi Honda (Natick, MA), Saccucci Honda (Middletown, RI), Curry Honda (Chicopee, MA), College Hills Honda (Wooster, OH). Know the rules--like, it seems Florida owners must buy from Florida dealers etc.

If your slick finance guy tries to sell you Honda Care for more than you can buy it online, don't do it. Rather, pull out printouts of the Honda Care prices from the dealer of your choice (who has reasonable cost) and use them to negotiate a better price, preferably the same low one on your printout.

The slick salesguy quoted me a price for the 8 yr 120 mi warranty that was $1000 more than some of the online dealers were offering. I goofed bigtime by biting, then had regrets and cancelled the thing. Once you cancel you cannot reinstate Honda Care. So get it right the first time!

Another little trick my dealership used: if I bought the "platinum club" membership for $200, I would get a $200 discount on the Honda Care. Sorta like getting the club membership for free. Bit again, oops.

So when I cancelled the HC I only got back what I paid minus the $200 club membership. I probably could have gotten that back too but I was feeling relieved and decided I'd let them keep the $200 since I got the car for msrp with no unwanted add-ons and I guess I was (still am) giddy from new car ownership.

I note that on my receipt for the car purchase, the $200 is included in the cost of the vehicle, it is not itemized. So another word to the wise: make sure they properly itemize your receipt to show amounts paid for which items, so you will have clear recourse if you want a refund.

In retrospect, I would not have bought either of these add-ons. I'm stuck with the club membership but I figure it gives me the right to expect red carpet treatment on every visit. If they don't deliver I WILL pitch a FIT!!! I can be a pretty wretched customer from hell when the occasion warrants it.
 
  #2  
Old 10-15-2006, 12:52 PM
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Thanks for relating your learning experience. Most folks are reluctant to admit they've been shafted, even if they've been able to mostly fix the deal, as you did. Kudos to you - you might help out some other poor soul.

Here's a trick for great treatment when you bring a car in for service. I do this for my S2000 (granted, not for my wife's Accord or my Civic). Bring 2 dozen Dunkin' Donuts for the techs when you drop off the car in the morning. Make sure it gets to the techs lunch/break room, and be sure they know who brought them. Costs me maybe $30 per year, and I get exceptional treatment every time I come in.

JonasM
 

Last edited by JonasM; 12-06-2006 at 10:06 PM.
  #3  
Old 10-16-2006, 01:32 AM
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You should have asked the finance guy what the different levels of treatment offered by the service department were. Then asked why all customers were not treated with the same level of service. That would just piss me off if a car dealers service department would treat me differently just because I did or did not pay an extra "service level fee".
 
  #4  
Old 10-16-2006, 03:44 PM
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Originally Posted by Gumpster
You should have asked the finance guy what the different levels of treatment offered by the service department were. Then asked why all customers were not treated with the same level of service. That would just piss me off if a car dealers service department would treat me differently just because I did or did not pay an extra "service level fee".
It was pretty basic and no-cost courtesy stuff, like going to the front of the line, not having to wait. It was not better service in that they use premium fluids or parts or anything like that. And then earning "points" for having the (higher priced of course) maintenance work done by Honda rather than the shade tree machanic, points which can be traded in for discount on price of next car. It is really mickey mouse, this club membership and as I said I'd ordinarily never buy it. Dontcha know, Honda would not be selling it if it was not a money maker for THEM (not us). But once I had recovered most of my money I was emotionallly exhausted and decided to let it go. I meant it, that I can be a real pill if need be, and I WILL BE if they don't treat me like royalty when I go in for my first oil change.

But really, at the time I made the foolish purchases I was in a pretty wiped mind condition. The sales people have us all psyched out, particularly when a vehicle is in such high demand as the Fit. Following a 4-month wait I arrived at the dealer and "met" my car for the first time. (This was only the second Fit I saw up close). Sales guy hands me the keys, I immediately jump into this beautiful new car and take a test drive in the city (I'm a country mouse) and instantly my adrenalin is all pumped up just from surviving on the highway in a brand new car that isn't even exactly mine. I was not capable of thinking straight at all when the finance guy shoved the papers under my nose. (and they know this, they do!)

In contrast, when I bought the old Ford Ranger in '94 (the last new vehicle I bought) there were plenty to choose from, many vehicles on many different lots. I gleefully and mercilessly played the dealerships against each other to work the price down. When I brought them to their knees on price I did the same thing with interest rate on financing. Got a real good deal, and enjoyed the heck out of playing their game back on them.

But with the Fit, you know and I know there are a dozen people who will snatch it right up (and maybe even pay more than msrp), so the pressure is on bigtime. The customer does not have much to bargain with.

I hope that others will benefit from my experience, as it is entirely possible to do all the research ahead of time and be totally prepared to counter any overpriced HondaCare offers.

Thanks Jonas for the donut idea. You are so right about making friends with the worker bees. I have found that tipping well more than pays for itself, and if there is one thing this world needs more of today, it is spreading goodwill.
 
  #5  
Old 10-29-2006, 01:24 PM
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HUGE LOOPHOLE in Honda Care warranty?

I started this thread to tell the tale of my unhappy and brief experience with Honda Care. I hope it will assist some folks here who one day find themselves at the dealership attempting to negotiate with the finance guy who is a highly trained professional with a mission to entice/trick you into buying a lot of extra stuff you don't need or want. Since there is still an agonizing long wait to get a new Fit, there is time to do dililgent research to prepare for the big day. Here is some more info to help you plan your strategy.

I posted this message in a different thread and then realized it was not the right location so apologies if some of this repeats what I wrote above. I hope someone will benefit from my mistakes.

You can review a sample Honda Care contract here:
http://www.myhondawarranty.com/hondaSampleContract.pdf

Read it carefully.

Before you decide to buy, consider if purchasing such a warranty even makes sense to you.

There are many reasons you might choose not to purchase an extended warranty. You may only intend to keep the car for 3 years, so the standard warranty will cover the vehicle for the time you own it. You may decide that your driving style is gentle and that your maintenance schedule is so disciplined that a vehicle with the dependability index of the Fit is most likely NOT going to break down while you own it. You may decide to wait until later to purchase Honda Care. You can do this up to a point, but the price will go up depending on the odometer reading at the time you purchase the contract. You may find, after 3 years, that you have had absolutely no mechanical issues whatsoever, and you may decide to live without a warranty.

If you decide you still want to buy Honda Care, research prices for these contracts online. Here are the dealers with the best prices when I searched a few months ago: Saccucci Honda, Bernardi Honda, Curry Honda, College Hills Honda.

When you find the Honda Care price you like, contact that dealer and make sure you can purchase the coverage from them for a car in your location, as some states do not allow out-of-state Honda Care contracts.

Then, arm yourself with a print-out showing the online price from the dealer you have contacted so you can bargain your local dealer down in price. Really, they ought to meet or beat the online offer, and wouldn't it be healthy to let the global market wear down some of these ridiculously high warranty prices.

BEFORE YOU SIGN ON THE DOTTED LINE, read one more time this Honda Care clause that seems to have sweeping implications. It is in section IV. WHAT IS NOT COVERED:

M. Negligence, error or omission on the part of any servicing DEALER, repair facility or CCMC, or any MECHANICAL BREAKDOWN or consequential damage to YOUR VEHICLE caused by negligence, error or omission.

The all-caps words are in the definitions in front of the contract. DEALER means an authorized HONDA dealership.

So am I the only one to whom this clause sounds like a total loophole if Honda simply wants to deny coverage?

Even if you dutifully take your vehicle to your HONDA DEALER for routine maintenance and even if you can prove that they messed up your car bigtime thru "negligence error or omission" which leads to MECHANICAL BREAKDOWN, this clause has indemnified them against any damages you might be able to claim!

So what good is this warranty?
 
  #6  
Old 11-16-2006, 01:57 AM
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My god. That's all I can pretty much think at this point. That clause is total BS. I can definitly live without that extended warranty. I'm only planning on having this vehicle for three years before getting a new one. I'm going to try and live with having a vehicle that always has the bumper to bumper warranty (no matter what!).
 
  #7  
Old 11-28-2006, 05:20 PM
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Thanks for this post. I'm going to be picking up my Fit sometime this week (I hope) and hadn't even thought about the extended warranty. I'm not sure that I would have given in anyway, but knowing how much cheaper they are online makes it very easy to say "NO!"
 
  #8  
Old 11-28-2006, 06:52 PM
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Happy to be of help.
The most powerful tool we have is information.
Gather all you can and use it well.
 
  #9  
Old 12-06-2006, 03:40 PM
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So i have had my fit for four day's now and i love it. I'm a little worryed though about my extended warenty. it's 5 year 60,000mile and i payed 1350.00 for it. Now im thinking about taking it back, i think i have 30 days, right? so whats your thoughts on not having the extended warenty?
 
  #10  
Old 12-06-2006, 03:43 PM
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Yes, you paid too much. But if you take it back, you cannot get it again, as far as I know. So you have a decision to make. It is a Honda, after all, so maybe you will be okay. But even at $1350, that's not much if you ever have a big problem.
 
  #11  
Old 12-06-2006, 04:07 PM
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Originally Posted by Frisky
Yes, you paid too much. But if you take it back, you cannot get it again, as far as I know. So you have a decision to make. It is a Honda, after all, so maybe you will be okay. But even at $1350, that's not much if you ever have a big problem.
yea thats very true, ive only had 91 civics (4 of them) since i dont no much about this paticular engine i thought it wasnt to bad. he started at $2,500 so i was happy about $1300. now im reconcidering again (not refunding) thanx for your help.
 
  #12  
Old 01-15-2007, 07:45 PM
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Just a quick note to say the procedure you outline is exactly what happened at my dealership in Phoenix Arizona, so it's not just a texas thing. I had been forewarned and did not bite. The guy asked "Do you mind if I ask why?" and I told him I could find it cheaper on-line.
 
  #13  
Old 01-15-2007, 08:16 PM
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I don't ever buy an extended warranty. They are a huge money loser for you, and a huge money-maker for the seller and company. If you're worried about repairs, take the same amount of money and put it in a savings account. You won't need it until the regular warranty is expired and then it will have earned interest. They love to sell these things since there is no risk exposure to them for 2-3 years and then very rarely does anyone submit a successful claim. We're buying a quality Honda product, and then just save your money for the future repair that probably won't happen.
 
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