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Old 05-28-2019, 08:24 PM   #1
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I need to make a decision in less than 24 hours about extended warranty

I know this subject has been discussed ad nauseam but my dealer is giving me a choice that's making it a little more difficult than I had planned. We are picking up the MH tomorrow (Wed, 5.29.19) and here are the vitals:

If I simply get the coach, no add-ons, the price OTD is $77622. At 4.89%, the payment is $609.40.

The five year ESP has been "lowered" to $4444, but they will also buy-down the interest rate on the loan to 4.39%, meaning financing $82066 at 4.39%, for a payment of $623.20, which is $13.80 per month more than I would be paying originally. Over the course of 15 years, if I actually took that long to pay it off (not planning on that), we are talking $2484 more in total payments.

It covers everything with only the very few exclusions that he listed off for me, and those were things that I would not expect to be covered anyway (tires, wheels, exhaust, paint, trim, and consumables, like brake pads and rotors, wiper blades, etc.) It extends the powertrain out from 3/36 to 5/60.

I hate throwing money out the window, but being that this is my first motor home and I don't have any DIY resources available to me, I am very tempted.

Help me through this, if you can, please.

Thanks for your thoughts!

Tim

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Old 05-28-2019, 08:28 PM   #2
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You don't have any DIY resources available to you? What do you think this Forum is for. IMHO you would be adding $4500 to the dealer's bottom line buying any ESP.
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Old 05-28-2019, 08:34 PM   #3
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I would look hard at bitting the bullet and get the coverage. Read it and be clear on all the fine print, deductibles, exclusions and as much as you can find out. Also, if you trade or sell your coach, it should be refundable on what is left or be transferred to another RV!! Many things will and can go wrong with RVs these days and a one year warranty only gets you so far with things showing up. Remember Murphy's law too...
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Old 05-28-2019, 08:42 PM   #4
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Originally Posted by 16ACE27 View Post
You don't have any DIY resources available to you? What do you think this Forum is for. IMHO you would be adding $4500 to the dealer's bottom line buying any ESP.
I live in a 5th wheel in an RV park for 4 months, an apartment for 4 months, and the MH will be the other 4 months. No garages, no repair areas, nothing. That is what I'm talking about.

I know this makes money for the dealer. Life insurance makes money for the agent and the insurance company, but the families of the departed sure are glad that it was there.

This is why I'm torn. I normally would agree with you 100%, but the price difference is making it really hard for me!
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Old 05-28-2019, 08:46 PM   #5
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My vote...NO...I told you this would happen at closing. If it was such a great deal for you, they wouldn't wait till the last minute, when you're excitement levels are peaking. You can buy the same program next week...or 3 months from now. Never make a decision with that much money when you don't totally feel "all in". AND...warranty is something you should never finance. What's the total finance cost of it?? They are not "buying down the rate"...they are slightly reducing the money they make off the finance end of it. They will try to reduce the amount again...offer you other junk from the "toy store"...NO....NO....NO!


BUT...we'll still love you either way. Do what's feels best for you but don't do it if you feel like a victim.
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Old 05-28-2019, 08:54 PM   #6
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Originally Posted by The Gritz Carlton View Post
My vote...NO...I told you this would happen at closing. If it was such a great deal for you, they wouldn't wait till the last minute, when you're excitement levels are peaking. You can buy the same program next week...or 3 months from now. Never make a decision with that much money when you don't totally feel "all in". AND...warranty is something you should never finance. What's the total finance cost of it?? They are not "buying down the rate"...they are slightly reducing the money they make off the finance end of it. They will try to reduce the amount again...offer you other junk from the "toy store"...NO....NO....NO!


BUT...we'll still love you either way. Do what's feels best for you but don't do it if you feel like a victim.
No, I don't feel like a victim at all. And, having sold cars for a brief time in my life, I understand how the game is played with that. When I say "buying down the rate", those are my words. I know that they are using some of their revenue from this sale to get me a "better rate", but at the end of the day, I am getting a payment that is only $13.80 more and I have peace-of-mind. At nearly $5000, no way in heck would I do this. At just over $2400, it becomes a little more palatable.

Either way, I'm hoping to sleep tonight. Thanks for your input (and still loving me)!

t
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Old 05-28-2019, 08:55 PM   #7
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Originally Posted by knucklehead View Post
I would look hard at bitting the bullet and get the coverage. Read it and be clear on all the fine print, deductibles, exclusions and as much as you can find out. Also, if you trade or sell your coach, it should be refundable on what is left or be transferred to another RV!! Many things will and can go wrong with RVs these days and a one year warranty only gets you so far with things showing up. Remember Murphy's law too...
I am totally fearful of Murphy's Law!
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Old 05-28-2019, 09:15 PM   #8
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The majority of times I've bought them I haven't needed them, almost every time I didn't I wish I had. Once was a huge benefit (new Ford ESP), once a frustrating waste of money (used Chevy ESP).
Overall, I buy them for the "Murphey" I don't anticipate, can't (or don't want to) fix myself, or don't want the future uncertainty of a big repair.
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Old 05-28-2019, 09:16 PM   #9
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I've paid BoatUS for on the water towing for over 25 years...only used it twice. I know the peace of mind you feel. Nothing worse than being 25 miles out an have a failure. It isn't a matter how much you can or cannot afford to fix things...it's peace of mind!
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Old 05-28-2019, 09:38 PM   #10
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So what do you think they would say if you walked in and said to them the deal is off. They are actually changing the interest rate and changing the payment at the very end. That would irritate me and I wonder what other tricks they are playing with the pricing and financing. I can't really tell you what to do, that is up to you. It's like the others have said, do what YOU feel is best for YOU. Keep us all posted on what you decide to do, either way you go, the decision will be the correct one.
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Old 05-28-2019, 09:45 PM   #11
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For "Peace of Mind": get the coverage...
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Old 05-28-2019, 09:55 PM   #12
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Some years back on a forum I was on did a survey on buying extended warranty pros and cons. Consensus was NO, save your money for a rainy day. Lot of info on the net about it. Some benefited, but a lot did not. It all falls on your comfort level.
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Old 05-28-2019, 10:33 PM   #13
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Originally Posted by cpmath View Post
So what do you think they would say if you walked in and said to them the deal is off. They are actually changing the interest rate and changing the payment at the very end. That would irritate me and I wonder what other tricks they are playing with the pricing and financing. I can't really tell you what to do, that is up to you. It's like the others have said, do what YOU feel is best for YOU. Keep us all posted on what you decide to do, either way you go, the decision will be the correct one.
Yeah, I understand, but I look at it this way: I thought I was going in on my own with my OWN financing, so they wouldn't have that leverage over me. Allowing them to go through one of their own banks (a very reputable one, I might add) will save me a minimum of .35% and if I go with the ESP, .85%. On $80K, that is significant.

I do have to do what is right for me. And, I know that people will still help me out on here, even if did something they wouldn't have.

Thanks for the advice! It is appreciated.
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Old 05-28-2019, 10:34 PM   #14
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Yeah don't: don't fall for the pressure.

You actually have up to a year and can shop around on the internet if you feel you really need an extended warranty (year = Thor's 1 year bumper to bumper warranty).

In my experience the high pressure sales stuff really benefits them not you--it just "looks good" and since its high pressure short timeframe you don't have time to do the research and thus I usually say no to that.
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Old 05-28-2019, 10:36 PM   #15
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Originally Posted by HaRVey View Post
The majority of times I've bought them I haven't needed them, almost every time I didn't I wish I had. Once was a huge benefit (new Ford ESP), once a frustrating waste of money (used Chevy ESP).
Overall, I buy them for the "Murphey" I don't anticipate, can't (or don't want to) fix myself, or don't want the future uncertainty of a big repair.
The ultimate "damned if you do, damned if you don't" scenario!

Thanks, Harvey. I think I'd rather be Harvey A, who bought it and didn't need it, than Harvey B, wishing he had!

t
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Old 05-28-2019, 10:41 PM   #16
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I wish I could get that close. Congratulations. Personally I would not buy the warranty in favor of putting up $4k for something major that could happen after year 1, but from reading your dilemma and how I read your situation; my tailored response to you...

For starters you have great deal IMO to buy an effective 5 year ESP warranty for less than $2,500. The reduction is interest rate is a huge benefit.

1. I would ensure they will allow you to reduce the principal by paying early at your leisure?
2. I would then get the amortization table and calculate from back end how many mortgage payments you can reduce by paying and extra $2500 in year one?

My guess when you see that number you will go whoa!!!! You will not only save the $4444 back that you actually paid for ESP; but a whole lot more as well.

Going forward, as a rule, I would pay at least on extra payment ($623.20) a year until you own outright.
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Old 05-28-2019, 10:41 PM   #17
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Originally Posted by JamieGeek View Post
Yeah don't: don't fall for the pressure.

You actually have up to a year and can shop around on the internet if you feel you really need an extended warranty (year = Thor's 1 year bumper to bumper warranty).

In my experience the high pressure sales stuff really benefits them not you--it just "looks good" and since its high pressure short timeframe you don't have time to do the research and thus I usually say no to that.
That's where my head was at from the beginning; it's the .5% that lowers the monthly payment by about $21 that makes it different. As far as pressure, I don't feel any at all. As a coach and teacher, I always taught kids that stress was 100% self-imposed. You control your own stress level, no matter what the outside stimuli are. The dealership knows that I have done my homework and that I was in the car business, so they've been real "low-key"; I know they want to make the sale, so maybe I'll see what else they come up with tomorrow.
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Old 05-28-2019, 10:51 PM   #18
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Originally Posted by dkoldman View Post
I wish I could get that close. Congratulations. Personally I would not buy the warranty in favor of putting up $4k for something major that could happen after year 1, but from reading your dilemma and how I read your situation; my tailored response to you...

For starters you have great deal IMO to buy an effective 5 year ESP warranty for less than $2,500. The reduction is interest rate is a huge benefit.

1. I would ensure they will allow you to reduce the principal by paying early at your leisure?
2. I would then get the amortization table and calculate from back end how many mortgage payments you can reduce by paying and extra $2500 in year one?

My guess when you see that number you will go whoa!!!! You will not only save the $4444 back that you actually paid for ESP; but a whole lot more as well.

Going forward, as a rule, I would pay at least on extra payment ($623.20) a year until you own outright.
Yes, absolutely we plan to pay it down early, especially when we are financing 100% LTV. It's amazing what an extra $100 or $200 per month will do!!!
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Old 05-28-2019, 11:12 PM   #19
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Something else to consider: Depending on where in Michigan you are you could be really close to the factory service center in Wakarusa, IN. If you have any issues in the first year (or after but you'd have to pay) simply make an appt there and have them fix it--it will come back better than anyone else could fix it.
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Old 05-28-2019, 11:17 PM   #20
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I always look at it from a financial perspective, not an emotional one, though 'emotions' come to the surface when a 'pressured' sale or decision is in place:

What can $2,500.00 do for me, whether right now, next year, or ever?....meaning, what is actually MORE important that I might need to spend $2,500.00 versus only the very slim 'possibility' of what an expensive 'Extended Only' plan 'might' do for me, with no other 'out of pocket' additional cost as part of the 'benefit', after paying all of this MONEY, even if it's financed over 15 years.

I used this same analogy for a financial conversation my son was having with me just today... he didn't understand why I was making such a 'big deal' about his potential purchase of a vehicle that gets an average of 20mpg, versus one that gets 40mpg, everything else being somewhat equal:

"well," I said, "think about it this way - you have a 20 mile commute everyday, 5 days a week, for a total of 40 miles per day. One car will take 2 gallons of gas, the other only 1. Maybe that doesn't seem like 'such a big deal', until you extrapolate that out over a week, then a month, then a year, and even then over the 'let's say' 5 years of ownership under the same circumstances: that's an extra gallon per day, which is about $2.50, then that's times 5 per week, for an 'extra' $12.50 per week in just gas cost.
If you multiply that times 4.34 average weeks per month, you get over $50 extra per month, or times 12 equals an 'extra' cost of $600 per year! Now THAT'S real numbers!"

Let's even look at it more critically, and in reality:
5 years would be an EXTRA $3,000.00!


"So, do you really still think it's not such a 'big' deal?"
" What would you like to do with $3,000.00 right NOW? Buy another car?! "


and, as I've told my wife under some of these same type of financial 'discussions' about buying warranty or extended service plans: If I go thru with this, I am GUARANTEED to have spent $2,500.00... but if I don't, then I am guaranteed NOT to have spend $2,500.00, at least until I need to, sometime in the far future, if EVER.

I'll just keep my money, thank you.
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