The good, the bad and the ugly

■ By Chris Smith / Advisory Editor

A couple of weeks ago, I wrote about my challenges with the transmission in my 2013 Chevy Silverado. I’m pleased to say that I have my truck back from Gosch Chevrolet, and it drives even better than before I took it in. Not only did the warranty company (Old Republic) pay the cost of the entire transmission rebuild ($3,200), but even the rental car I drove for the week my truck was in the shop.
I was skeptical about purchasing an aftermarket warranty on the truck that seemed like a brand new vehicle when I bought it. It was just a year old, and it had only 30,000 miles on it. How could anything go wrong? I’ve since been talking to people in the industry, and it seems that vehicles aren’t quite what they used to be. Too many electronics today that can fail.
I put 180,000 miles on a 1986 Chevy Camaro and ignored the advice of a transmission shop to rebuild the tranny at 100,000 miles. As it turned out, it was the right decision. The transmission worked flawlessly through two engines until I finally totaled the car on the Ortega Highway!
While I’m now a believer in aftermarket warranties, I have seen evidence recently of local dealers taking advantage of senior citizens by selling them way more aftermarket protection than they need – or can afford.
An example is my neighbor Janet, who was facing the end of her lease and responded to a mailer from a local dealer to put her in a new car for the same payment she was paying on the old one. That would sound attractive!
The dealer refinanced her car – which was worth a little over $14,000 – at a reasonable interest rate of 5.49 percent (her credit score was excellent – over 800). But then the dealer proceeded to sell her a whopping $5,786 worth of “protections!”
These included $301 for an alarm system, $2,995 for an extended warranty (I paid $1,900 for mine); $1,595 for something called a “tire and wheel protection with cosmetic coverage” service from Toyota, and $895 for gap insurance.
So with sales tax and registration, her $14,000 car is now suddenly costing $21,308. When she added $3,807 in interest that she would be paying over the next 72 months, and miscellaneous fees, the total sale price was $25,115. The only thing the dealer wasn’t able to sell her was a $500 policy allowing her to change her mind after she got home! She quickly got a notice from the bank reminding her to please be prompt in delivering her monthly $348.82 payment. Of course the payment was unaffordable for someone living on Social Security. Without all the warranties, her payment would have been a more reasonable $253.67.
I’m sorry, but there is something wrong here. Local dealers should be more concerned about selling elderly customers cars that they cannot afford. There needs to be some top-down restraint about loading up contracts with thousands of dollars in inflated insurance and warranty products – even if they may someday use them! How about devising a good warranty for $1,000?

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