Guidance on maintenance & extended warranty package

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Hello, I am a first time car buyer and am thinking of buying a CX-5 from Fremont Mazda. I like their transparent pricing but they are selling me the pre-paid maintenance and extended warranty package quite vehemently which leads me to the point that there is the profit that they want to make.

They are asking $1300 for the pre-paid maintenance which includes 6 maintenances.
They are asking $1600 for the 5 year extended warranty package.

My question is
  1. Are these two I should take or there are better deals around?
  2. If I do indeed take this up, what are things to be aware of?
 
@neo0588

Wow you really jump right into the deep end with your first set of questions.

As a first time car buyer I am sure you are nervous and anxious to be prepared for all the things car ownership come with. You didn't mention new versus used, so Im gonna guess new.

First and foremost you should already have an emergency fund in your budgeting plan. You know the whole 3 months or more of required re-occurring bills squirreled away. If you have that great -- next up you should have your new car emergency funds. This bit of money set aside should be ear marked for all things car related (tire replacement; basic maintenance; repairs) how much I would say about $2k should get you a decent comfort level. Now onto the questions.

1) pre-paid maintenance ; since you didn't mention what the maintenance is (simply oil changes) the broad assumption is this will NOT save you money and if you are financing your purchase it will definitely increase your overall cost in terms of interest over the term of the loan. Figure $70 an oil change every 5000 to 7000 miles; and another $200 a year in miscellaneous things. Of course DIY is an option to save a bit more money.. but don't forget to factor your time into those cost savings.

2) 5 year extended warranty package. This has been discussed MANY times on this and other forums. This is basically an insurance policy against unplanned repairs. Is $1600 worth the risk on a Mazda most likely yes ; very reliable vehicles and if you have your car emergency fund set a side as I mentioned above you money can be earning a bit of interest for you until you need it.


OK OK so you are comfortable with the pros/cons maybe

1) For prepaid maintenance ASK exactly what each included service includes and the intervals
2) An extended warranty is NEVER a warranty like the factory; there will be different exclusions and terms and most often is a "vehicle protection plan" or similar naming. There could be a deducible and often times must be used at the selling dealer or have complex requirements for using it elsewhere.

Good luck; take a deep breath.
 
They are asking $1300 for the pre-paid maintenance which includes 6 maintenances.
They are asking $1600 for the 5 year extended warranty package.
I will give you a less nuanced answer...avoid both of these items like the plague!
Never buy any of the 'extras' the dealer tries to sell you on any car you ever buy.

Dealers make very little money on most new car sales, so selling this crap is their way of padding their profit. In virtually every instance, they are a bad deal for the buyer.

Instead of giving the dealer $2900 for these "packages", put that money in a MM account or CD.
You can use that money to pay for maintenance/repairs, and likely have $2000 leftover.
 
I'm not one to tell someone how to spend their money, so my advice is to educate yourself on the maintenance, parts required for maintenance, and the warranty and what it may exclude - specifically the extended warranty (or whatever they want to call it). Then decide whether the cost is worth it to you. Keep in mind that the manual explains everything that is required to maintain the factory warranty; you either keep the invoice from the service performed at the dealership (or independent shop), or you keep your own records which include a detailed log of services done by you as well as receipts for all parts used for maintenance. The manual also details the recommended service intervals and lists everything that should be replaced and inspected. Some dealerships will have their own "service intervals", which may be more frequent than what is recommended in the manual, in order to squeeze you for more money.

Some facts:
  • $1300 for 6 maintenance visits equates to just under $220 per visit. If you were to do this maintenance yourself, at home, you would need to buy the oil ($30-50) and the filter and drain plug washer (~$10). Figure maybe $5-20 to top up any fluids (on a new car, this usually just means topping up windshield washer fluid). So we're at $45-80 to do the maintenance yourself. Six of these works out to $270-480. Even if you were to buy the tools required (3-ton floor jack, 2 pairs of jack stands, basic tool set, oil filter wrench, torque wrench), you'd probably come out well under $1000. Of course, you'd have to be willing to do all of this yourself (and learn how to do it if you don't already know how). The good news is that you've joined a very helpful forum with a lot of free resources to help you learn ;)
  • "5-year extended warranty" probably just means 2 years of basic warranty in addition to the existing 3 years you already get for free. Your powertrain warranty is 5 years, so it wouldn't add anything to that. Which means you're really paying for an extra 2 years of coverage on things like brake calipers, in-car electronics, etc. More info about the warranty can be found here.

Decide for yourself whether the cost is worth it. Only you can put a price on your own peace of mind.
 
If you were to do this maintenance yourself, at home, you would need to buy the oil ($30-50) and the filter and drain plug washer (~$10). Figure maybe $5-20 to top up any fluids (on a new car, this usually just means topping up windshield washer fluid). So we're at $45-80 to do the maintenance yourself.
Only you can put a price on your own peace of mind.
You must be quoting Canadian dollars, because the actual costs in the US are far less.
I just bought 5-qt jugs of name brand oil for less than $20, and just picked up OEM oil filters for less than $6 each, which came with the crush washers.

I'd suggest that car buyers should derive much greater "peace of mind" by keeping the $2900 in their own bank account, to use however they wish, instead of giving that money to the dealer.
 
You must be quoting Canadian dollars, because the actual costs in the US are far less.
I just bought 5-qt jugs of name brand oil for less than $20, and just picked up OEM oil filters for less than $6 each, which came with the crush washers.

Yes, I'm quoting CAD prices. The point is that the cost to DIY is much cheaper.


I'd suggest that car buyers should derive much greater "peace of mind" by keeping the $2900 in their own bank account, to use however they wish, instead of giving that money to the dealer.

Thanks for the suggestion.
 
Hi Everyone, thank you for your thoughts.

Yes, this is a NEW vehicle. 2021 model.

In terms of what they are offering here is the brochure I was provided
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So basically oil changes every time, tire rotation, washer refill, Air filter change (1x), cabin filter change (1x). The thing is I was also offered a pre-paid maintenance package by another dealership. It was slightly more money but had 11 services in it.

As for the 'extended warranty', this is an additional 5 years on top of the 3 years the vehicle comes with. It does not cover the powertrain as someone mentioned above. The finance lady mentioned that this car has so many electronics and if something goes bad, just the labor costs will be more than this. I want to understand if that is true.
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just say no. there is a reason the dealer is selling you "vehemently." Bluegrass is exactly right.
 
Unless you want to watch $2900 evaporate into thin air, DO NOT BUY THIS GARBAGE!
Keep the $2900 in your account, then use it to self-insure in the unlikely event that your vehicle requires an out-of-warranty repair.
I can't be any more clear...these products are a complete rip-off.

Also, you should NEVER rely on these dumb promotional brochures when reviewing the merits of such products, since they don't contain the full terms/details/conditions/exclusions.

Regarding the comment..."The finance lady mentioned that this car has so many electronics and if something goes bad, just the labor costs will be more than this."
Wake up! This is the standard sales pitch used to push these warranties. The salesperson, finance person and dealership all get a healthy commission if you buy this garbage.
 
What about the maintenance package? I will need need the maintenance on the vehicle anyway. I can do the filter/oil changes but can't do some of the others myself.
 
It looks unlikely that I will make any warranty claims before my 5 year drivetrain warranty is up. There's always a chance but I only have about eight months left.
Maybe an extra warranty will get you some goodwill with that dealer, but be prepared to shell out for exclusions.
 
What about the maintenance package? I will need need the maintenance on the vehicle anyway. I can do the filter/oil changes but can't do some of the others myself.
You seem really set on buying one or both of these plans...they are both garbage!

The "maintenance package" costs $1300 and you're only getting 6 oil changes & tire rotations!
Everything else on the list is basically worthless.
- I do my own maintenance and an oil change/tire rotation costs me $25.
- If you're taking it to a shop, assume it will cost around $50.
- The cost for each service is over $216 with this "package"!

I just bought a cabin and engine air filter for less than $20 combined.
Installing both takes less than 10 minutes, including watching the 'how-to' videos on youtube.

Besides cost, there are many other reasons this maintenance plan is a bad idea...
- If you finance it with the vehicle purchase, it will end up costing even more.
- If you sell the vehicle, or it gets stolen/totaled/ect, you lose the money.
- You are forced to use their service department...what if you move, or find them to be incompetent/rude/inconvenient/ect?
- You will be forced to listen to them upsell you on unnecessary service every time.
- You are handcuffed by the terms/conditions of the contract, which you have not reviewed.
 
Hi @bluegrass, thank you for your help.
If I don't take the maintenance package, let's say if every-time I go to the dealer to make these changes and dont want to do myself, I think they will charge me to labor cost as well, right?

And if I do take the maintenance package, will they not charge me labor costs?

I do agree that the extended warranty doesn't make sense and if I need, I will buy one in future.
 
For the record, if you can do an oil change, you can do everything else (air filter changes are MUCH easier than an oil change).

Regarding the warranty - the car does have a lot of electronics, and if they fail, they may end up costing a fair chunk of change. However, those are big ifs. Further, those prices in the brochure probably include the inflated dealership's shop rate. Repairs or replacements of those components (again, if they ever need to be replaced) can likely be done cheaper by someone other than the dealer.

Again, you need to educate yourself on what's being offered and decide for yourself whether it's worth what they're asking. Also, keep in mind that you can negotiate the prices of the warranty and maintenance package if you wanted to.

Speaking for myself, I would skip on both. I've had my 2018 CX-9 since new, and I bought an extended warranty. At the time, the CX-9 had only been out for 2 years, and I wasn't sure if that was enough time for them to identify potential problems, so I got the warranty for peace of mind. I've only used the warranty for minor stuff like a new headrest and brake pads, but the peace of mind I got from having it was worth what I paid. If I were buying a CX-5 today, I'd probably skip the warranty because it's been out since 2017 and major problems have been few and far between.
 
Hi @bluegrass, thank you for your help.
If I don't take the maintenance package, let's say if every-time I go to the dealer to make these changes and dont want to do myself, I think they will charge me to labor cost as well, right?

And if I do take the maintenance package, will they not charge me labor costs?

I do agree that the extended warranty doesn't make sense and if I need, I will buy one in future.

Find out what the cost of one basic service is from the dealership. That cost will include labour.

The prepaid maintenance includes the labour, but again, it works out to just under $220 for one service. You can do it yourself for less than 1/4 of that price, or you can take it to an independent shop and expect to pay about half of that with labour included.
 
Hi @sm1ke - thank you for advise.

All, I've decided to go against these packages. I called in one of the service centers and coupons are available for these at just $100 + tax. So for these 6, it would never add to $1300+tax that they are charging me.
 
If I don't take the maintenance package, let's say if every-time I go to the dealer to make these changes and dont want to do myself, I think they will charge me to labor cost as well, right?

And if I do take the maintenance package, will they not charge me labor costs?
The "maintenance package" is essentially pre-paying for the maintenance listed in the contract.
So when you go to the dealership, you shouldn't have to pay for the services noted.
However, these contracts are usually filled with loopholes/exclusions, so there is no guarantee.

If you don't get this maintenance package, YOU can choose where to take it, when to take it, how much you're willing to pay, and what services you want. You have the power, not the stealership.

But regardless, we've already established that this $1300 plan for 6 services is a complete rip-off.
They are charging you ~4x more than what this service would cost elsewhere.
 
All, I've decided to go against these packages. I called in one of the service centers and coupons are available for these at just $100 + tax. So for these 6, it would never add to $1300+tax that they are charging me.
That's what we've been trying to tell you!

And FYI, unless you live in a high cost of living area, the $100+tax "coupon" is still a rip-off.
You shouldn't be paying any more than $75 for an oil change and tire rotation.
 
I think it is fine for those extra $25 but I can't believe how much of a ripoff these dealerships are. I am now 100% sure to buy a Tesla for my next car. No negotiation at any point and no maintenance.
 
I am now 100% sure to buy a Tesla for my next car. No negotiation at any point and no maintenance.
You really need research these things more.
Tesla vehicles absolutely require routine maintenance.

In fact, Car & Driver's long-term Telsa Model 3 maintenance costs have been "on par with the cost for many gas-powered vehicles."
https://www.caranddriver.com/reviews/a30209598/2019-tesla-model-3-reliability-maintenance/

Here is an overview of Tesla's recommended maintenance service...
https://www.tesla.com/support/car-maintenance
 
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