Extended Warranty Story

[Al Powell]

I agree that extended warranties are generally not worth considering 
on consumer electronics.  I feel the same way about them on most 
purchases, but not all.

Item in question: my first Audi, a 1984 5KT.  When I bought it, I 
found out the dealer who had done all the service on it (a different 
one), and the service manager gave it a clean bill of health - except 
for the steering rack.  He said "keep an eye on the rack, as I think 
I've seen some leakage from it."  Of course, I didn't know the rack's 
failure history on the type 44's at that time, but I paid attention 
because he told me it would be expensive if it went out.

I bought the car, but made sure I knew how long after the sale I 
could wait to buy the extended warranty, and I determined that the 
warranty covered both the rack and turbo.  I believe I had 30 days to 
decide on the extended warranty.

Two weeks later, I had to add about a half-liter of Pentosin to the 
PS reservoir.  I called the dealership that day and said "sell me the 
extended warranty".  Cost was $400.

Three weeks later, with the fluid low again, I took the 5K into their 
shop and said, "Gee guys, the PS fluid is low.  Would you take a look 
at it and see what's going on?"  They called and said it needed a 
rack...and I said "put it on."

I got the car back three days later.  Under that warranty, I paid 10% 
of repairs, so it cost me $100 to get the car back.  Including the 
warranty and co-pay, I had just invested $500, and by doing so, I 
saved $500 on the cost of the rack.  In other words, I paid for the 
warranty with that repair, and still had a warranty left.

Just about the best $400 I ever spent.

************************************
Al Powell
Fort Collins, CO
powellae at home.com
cougfan1 at gocougs.wsu.edu
************************************