### Author Topic: .  (Read 2035 times)

#### FXF

• 5 O'Clock Shadow
• Posts: 26
##### .
« on: September 08, 2016, 08:44:14 PM »
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« Last Edit: April 30, 2018, 12:54:44 PM by FXF »

#### obstinate

• Handlebar Stache
• Posts: 1048
##### Re: Basis for Decision Making When Buying a Car -Cost per Mile of remaining warranty
« Reply #1 on: September 08, 2016, 11:21:47 PM »
This is not a reasonable basis for analysis. The value is loosely some quadratic curve decreasing quickly at first and then more slowly later on. The warranty is just the end of the period where the manufacturer is very confident you will have no problem. Basically, it's insurance against manufacturing defects. The car still has a great amount of usable life after. In fact, it's most efficient to buy a car out of warranty -- around 60-100k miles.

#### obstinate

• Handlebar Stache
• Posts: 1048
##### Re: Basis for Decision Making When Buying a Car -Cost per Mile of remaining warranty
« Reply #2 on: September 08, 2016, 11:23:16 PM »
Also, reductio ad absurdum:

Toyota Prius w/ 59999 mi, 60k mi warranty, asking price \$11000. By your metric, a car like this would be valued at \$11000/mi, which is plainly absurd. This metric cannot be used for anything unless you believe the value is zero after the warranty period is over.

#### Goldielocks

• Walrus Stache
• Posts: 6813
• Location: BC
##### Re: Basis for Decision Making When Buying a Car -Cost per Mile of remaining warranty
« Reply #3 on: September 09, 2016, 11:31:04 AM »
Warranties are priced like insurance -- the manufacturer provides them to a wide number of cars, based on a fairly predictable cost over many users...  e.g., warranty risk / benefit / price averaged over 1000's cars that you know the mechanics of, is pretty easy to calculate.

It is very difficult to calculate for an individual, however, as the chance % of problems are individually low.

I presume that warranty work (not covered) would not be a financial disaster for you, so the risk to you is modest at best.

Therefore, the only way to price it is with your emotions.   (Ha! take that answer forum!)   How much would a warranty provide me with piece of mind / lack of spouse nagging / enjoyment of the vehicle.   Is that worth \$200?  \$2000?   IDK.  Only you know.

In my opinion, the hassles of following maintenance guidelines, using a remote to me dealership, to maintain the warranty is about equal to the value of the warranty, so I would not pay for it.  But likewise, I have no trouble driving older vehicles that need minor work every 6 months by my easy to work with, biking -distance mechanic shop.

#### obstinate

• Handlebar Stache
• Posts: 1048
##### Re: Basis for Decision Making When Buying a Car -Cost per Mile of remaining warranty
« Reply #4 on: September 09, 2016, 03:14:33 PM »
Cars don't break all that much, especially ones from reliable brands. I have only owned Toyotas and Hondas. The worst thing that any of my cars have ever done to me in more than a hundred thousand miles of driving is have a dead battery.

#### protostache

• Pencil Stache
• Posts: 897
##### Re: Basis for Decision Making When Buying a Car -Cost per Mile of remaining warranty
« Reply #5 on: September 10, 2016, 01:27:56 AM »
In the past ten years my wife and I have collectively driven about 150k miles across four bought-new cars. Of the four, the only one that had to have warranty work was my VW Golf, and IIRC that was relatively minor. The other three (09 Honda Fit, 14 Mazda 6, 16 Nissan Rogue) have just had to have their periodic maintenance (oil change, tire rotation, tire replacement, air filters, etc)  and the occasional recall. Recall work is always free regardless of warranty status.

Cars are extremely reliable machines these days, regardless of warranty. Instead of picking based on an artificial metric I would suggest looking at your actual needs as far as what you're going to use the car for and then buying something that fulfills those needs. Planning on keeping the car forever? It's ok to buy new or new-ish. Safety features in particular are changing fast and most of the time are hard or impossible to retrofit, so take a look at the safety ratings as you narrow down your choices.