When I bought my 05 Nismo the dealer sold me a 5yr/75000 mile full coverage warranty through Nissan that is fully refundable if I don't use it. It was $2500. If anything goes wrong under the basic nissan warranty it doesn't count towards the extended warranty which is nice.
Let's look at this a different way...
Nissan's factory warranty is 3 years/36,000 miles bumper-to-bumper and 5 years/60,000 miles for the power train.
So, for $2,500, you added 2 years/39,000 miles to the bumper-to bumper warranty and 0 years/15,000 miles to the power train coverage. According to Consumer Reports, over 80% of all vehicle repairs that would cost a consumer more than $1,250 (the average cost of an extended warranty) arise from problem with the engine or transmission, which would be covered by the power train warranty.
If your factory warranty ran out before the 5 years was up (which means you put more than 12,000 miles per year on your truck), the added 15,000 miles on your extended warranty would probably give you 1 year or less coverage on the power train than the factory warranty.
I'm assuming that you get the $2,500 back at the end of the warranty period. Assuming that you added that $2,500 to the amount that you financed, that $2,500 at 7% for 48 months would add $59 per month to a car loan, which would cost $380 added interest over the course of the loan. Assuming that you didn't finance that $2,500 but invested it at 7% over the course of the loan, you would make $780 in interest.
So, adding the $380 in added loan interest and the $780 you could make investing the $2,500 elsewhere means that you will have cost yourself $1,160 out of pocket that you won't get back after the end of the warranty period IF NO REPAIRS ARE MADE DURING THE WARRANTY PERIOD.
Any engine repairs would add to the $1,160. Since any repairs would reduce the amount of money you get back, you're essentially paying for the repairs anyway. It's just that the amount you pay out of pocket for the warranty period is capped at $2,500.
So, to sum up --
1. The extended warranty adds 2 years/39,000 miles to non-power train coverage and 0 years/15,000 miles to the power train coverage.
2. $1,160 in loan interest and lost opportunity will be experienced even if the full amount of the factory warranty is refunded 5 years later.
3. Any repairs covered by the extended warranty will deduct from the amount received at the end of the warranty period. Since repairs would essentially take away from cash value of the pay-back clause of the warranty, you're really paying for these repairs anyway.
4. The best case scenario is that you get $1,340 back ($2,500 - $1,160)after 5 years if no repairs are made. You would need to have more than $3,660 in repairs ($2,500 + $1,160) to break even. And, those repairs would all have to occur outside the factory warranty. Since it's likely that it would be power train components that would cause major repairs like this, that means that most of those repairs would have to occur within the year or so after the factory power train warranty expires. If the owner puts 12,000 miles or less per year on the truck, the factory warranty would have covered it anyway.
This may still be worth it to StormNISMO -- I simply included this illustration to help others see the true cost of extended warranties.
Hope this helps someone! :-)
__________________ msubullyfan 2005 Nissan Frontier Crew Cab
Aztec Red NISMO
Nissan's factory warranty is 3 years/36,000 miles bumper-to-bumper and 5 years/60,000 miles for the power train.
So, for $2,500, you added 2 years/39,000 miles to the bumper-to bumper warranty and 0 years/15,000 miles to the power train coverage. According to Consumer Reports, over 80% of all vehicle repairs that would cost a consumer more than $1,250 (the average cost of an extended warranty) arise from problem with the engine or transmission, which would be covered by the power train warranty.
If your factory warranty ran out before the 5 years was up (which means you put more than 12,000 miles per year on your truck), the added 15,000 miles on your extended warranty would probably give you 1 year or less coverage on the power train than the factory warranty.
I'm assuming that you get the $2,500 back at the end of the warranty period. Assuming that you added that $2,500 to the amount that you financed, that $2,500 at 7% for 48 months would add $59 per month to a car loan, which would cost $380 added interest over the course of the loan. Assuming that you didn't finance that $2,500 but invested it at 7% over the course of the loan, you would make $780 in interest.
So, adding the $380 in added loan interest and the $780 you could make investing the $2,500 elsewhere means that you will have cost yourself $1,160 out of pocket that you won't get back after the end of the warranty period IF NO REPAIRS ARE MADE DURING THE WARRANTY PERIOD.
Any engine repairs would add to the $1,160. Since any repairs would reduce the amount of money you get back, you're essentially paying for the repairs anyway. It's just that the amount you pay out of pocket for the warranty period is capped at $2,500.
So, to sum up --
1. The extended warranty adds 2 years/39,000 miles to non-power train coverage and 0 years/15,000 miles to the power train coverage.
2. $1,160 in loan interest and lost opportunity will be experienced even if the full amount of the factory warranty is refunded 5 years later.
3. Any repairs covered by the extended warranty will deduct from the amount received at the end of the warranty period. Since repairs would essentially take away from cash value of the pay-back clause of the warranty, you're really paying for these repairs anyway.
4. The best case scenario is that you get $1,340 back ($2,500 - $1,160)after 5 years if no repairs are made. You would need to have more than $3,660 in repairs ($2,500 + $1,160) to break even. And, those repairs would all have to occur outside the factory warranty. Since it's likely that it would be power train components that would cause major repairs like this, that means that most of those repairs would have to occur within the year or so after the factory power train warranty expires. If the owner puts 12,000 miles or less per year on the truck, the factory warranty would have covered it anyway.
This may still be worth it to StormNISMO -- I simply included this illustration to help others see the true cost of extended warranties.
Hope this helps someone! :-)
First.... The nissan factory warranty is NOT bumper-to-bumper, it is actaully a limited warranty. The extended warranty, or Nissan's Service Plus Gold warranty, in turn, makes the factory warranty in to a Full bumper to bumper warranty. There are actaully roughly 1500 parts not covered the Nissan factory warranty. The extended warranty also gives me roadside assistance, free towing, and a rental car for upto 4 days.
Second .... It only added roughy 15 bucks and change to my monthly payment (the finance guy actually took more off the truck so I would buy the warranty or so he said). So this makes it a little easier to deal with as well.
Third....... The estimated $1100 that I would have lost is no loss for my piece of mind!! Knowing I have Roadside assistance, towing and a rental car is a huge luxury!! With the world being a very busy place as it is you almost always need a auto to get to work,school, etc. This just save the hassle of asking for rides and taking the bus or even trying to get a rental!!
Fourth... I can remove the warranty any time I want and there is no penalty on the $2500. With the many mods I may do to the truck this may not last the whole term, but I still get the full $2500 back!! And it is fully transferable with no penalty which is a great selling/trading bonus if I decide to get a different auto within the term of the warranty!
Lastly.... Good write up MSU!!! I did my research on this as well and I'm not one to just drop $2500 without knowing its worth it to me. As the old saying goes "To Each Their Own"!!!
Fourth... I can remove the warranty any time I want and there is no penalty on the $2500. With the many mods I may do to the truck this may not last the whole term, but I still get the full $2500 back!! And it is fully transferable with no penalty which is a great selling/trading bonus if I decide to get a different auto within the term of the warranty!
I would like to clear the air about what may have or may have not been told to you by your local Nissan Dealers regarding the cancellation or transferability of a Nissan Extended Warranty. Following is a scan of an actual contract form from Nissan regarding the cancellation or transfer process and rules.
Scan of Cancellation or Transfer for Nissan Extended Warranty Click Here to View
There exists fees from Nissan for cancellation and transfer:
$35 fee - Cancellation
$50 fee - Transfer to New Owner
Cancellation (as stated in the contract above):
"If this Agreement is cancelled within sixty (60) days from the Agreement effective date, you will receive a full refund provided you have not filed a claim. If you have filed a claim or if this Agreement is cancelled after sixty (60) days, the refund will be calculated based on the greater of the time in force or the mileage driven compared to the total time or mileage of your term. In addition, a processing fee of $35 will be deducted from the refund.
NOTE: If this Agreement was financed, the refund will be paid to the lienholder unless proof of pay-off is submitted."
"If this Agreement is cancelled within sixty (60) days from the Agreement effective date, you will receive a full refund provided you have not filed a claim. If you have filed a claim or if this Agreement is cancelled after sixty (60) days, the refund will be calculated based on the greater of the time in force or the mileage driven compared to the total time or mileage of your term. In addition, a processing fee of $35 will be deducted from the refund.
Chad,
Could you please define "effective date". Is it the date the warrany is purchased (normally when the vehicle is bought), or the date that the extended warranty takes effect after the factory warranty expires?
__________________ msubullyfan 2005 Nissan Frontier Crew Cab
Aztec Red NISMO
Could you please define "effective date". Is it the date the warrany is purchased (normally when the vehicle is bought), or the date that the extended warranty takes effect after the factory warranty expires?
Effective Date is when the dealership processes your signed warranty contract. This is normally the same date as your In Service Date on a new Nissan or the date of the vehicle contract.
Effective Date is when the dealership processes your signed warranty contract. This is normally the same date as your In Service Date on a new Nissan or the date of the vehicle contract.
So, if I'm reading that correctly, that means that there will be NO refund at the end of the warranty term. Is that right?
Also, it doesn't it mean that the refund value of the extended warranty depreciates WHILE THE FACTORY WARRANTY IS STILL IN EFFECT?
__________________ msubullyfan 2005 Nissan Frontier Crew Cab
Aztec Red NISMO
Last edited by msubullyfan : Feb 23rd, 2006 at 02:51 PM.
Just to let you know you are correct!! Nissan does not refund any money at the end of their Service Plus warranty. But I do know that I have a signed contract to recieve all of the $2500 back from another source (of which I failed to mention in my previous post), if none of the aspects of the extended warranty were used. I never had said Nissan was responsible for the refund. Also the added contract for the warranty states there are NO transfer or termination fees.
Just to let you know you are correct!! Nissan does not refund any money at the end of their Service Plus warranty. But I do know that I have a signed contract to recieve all of the $2500 back from another source (of which I failed to mention in my previous post), if none of the aspects of the extended warranty were used. I never had said Nissan was responsible for the refund. Also the added contract for the warranty states there are NO transfer or termination fees.
Well, I guess that makes sense. That's the most expensive extended warranty I've ever seen, and I guess that's why. Essentially, most of those warranties are about $1,200 or so, so I guess the extra money paid is sort of like a deposit that will let you get the warranty money back.
Never seen anything like that before.
__________________ msubullyfan 2005 Nissan Frontier Crew Cab
Aztec Red NISMO
Just to let you know you are correct!! Nissan does not refund any money at the end of their Service Plus warranty. But I do know that I have a signed contract to recieve all of the $2500 back from another source (of which I failed to mention in my previous post), if none of the aspects of the extended warranty were used. I never had said Nissan was responsible for the refund. Also the added contract for the warranty states there are NO transfer or termination fees.
In essence your dealership is betting on your owners cycle. Of course you as the consumer can outsmart him. A dealership does have the choice to sell a warranty at any amount above or below the cost involved in acquiring the warranty from Nissan of North America.
Therefore, it stands to reason that some dealers are willing to roll the dice and wrap their contracts with NON USE refunds. However there may be a stipulation in their that your service work and next vehicle must be done at the dealership. Who knows.
Bottom line Nissan Dealers have complete flexibility (in some states) on how they deliver and present an extended warranties to their customers. I would just do my homework before accepting offers from the NORM of what Nissan as a Manufacturer represents.
I went under this site last night www.NissanExtendedWarranty.com looked it over real quick and filled out the information for a quick quote. I had a very nice lady call me today to see if I needed any help with the quotes and answered all of my questions. What I was surprised about was that she said that if I bought the 100,000 mile/6year warranty that it wouldn’t start until after my factory warranty stopped. So that means I would be covered up to 136,000 miles..... I was very impressed... 0% financing for 17 months also.
I went under this site last night www.NissanExtendedWarranty.com ... if I bought the 100,000 mile/6year warranty that it wouldn’t start until after my factory warranty stopped. So that means I would be covered up to 136,000 miles..... I was very impressed... 0% financing for 17 months also.
Actually if you bought a 6 year / 100,000 miles Nissan Extended Warranty. The coverage would start at the "In Service Date" of your vehicle. The in service date starts when the vehicle was originally purchased NEW at the originating dealership. Therefore the maximum coverage that is offered by Nissan is 7 years or 100,000 miles from the in service, whichever comes first.
When I bought my truck, the finance guy tried to sell me on one. I just looked at him and said "gee, if you think I really need an extended warranty maybe I should go back to the Toyota dealership". He shut up pretty quick.
My '94 Ranger 4x4 went 140k miles with probably less than $1k in repairs, I have high hopes that the Frontier can beat that as long as it is maintained properly.
Actually if you bought a 6 year / 100,000 miles Nissan Extended Warranty. The coverage would start at the "In Service Date" of your vehicle. The in service date starts when the vehicle was originally purchased NEW at the originating dealership. Therefore the maximum coverage that is offered by Nissan is 7 years or 100,000 miles from the in service, whichever comes first.
Maybe the people that called me should have read that section of there book before answering my question. I will have to tell them that when they call me back!
When I bought my truck, the finance guy tried to sell me on one. I just looked at him and said "gee, if you think I really need an extended warranty maybe I should go back to the Toyota dealership". He shut up pretty quick.
My '94 Ranger 4x4 went 140k miles with probably less than $1k in repairs, I have high hopes that the Frontier can beat that as long as it is maintained properly.
I dunno dude, u could be the lucky one. I have already had my power steering pump replaced twice, rack and pinion assembly replaced once and the radiator replaced once and my car is only at 31k / 1.5 yr. I am definitely plannin on buying the extended warranty from nissanextendedwarranty.com as I plan to keep the car atleast 3yrs/60k miles.
Thanks RamRam, look forward to your inquiry. Hurry up though warranty is about to expire. When that happens Nissan can't provide the Gold Preferred package and the cost goes up for a Pre-Owned plan.
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