Extended Warrenty - Fidelity

[cmeller]

I just canceled the extended warranty I bought at the dealer last week.

I spoke with fidelity and if I buy from them I can get the platinum 7 year / 100K for $1800 with a $100 deductible.

Any thoughts if this is worth it?

Thanks

 

[Joe_Meehan]

Based on the industry standards, you can expect that the average purchaser of the policy is going to be able to claim about $900. Most likely that will work out to a few who get a lot more and many who get little or no claims.

It is a simple fact that Fidelity is a business and must make a profit to continue in business. To do that they need to charge more for their produce than it cost them to sell and service the product. Typically about 50% of product "extended warranty" insurance goes to selling expense, service expense and profit. Only about 50% goes to pay claims.

If you feel it is worth $900 to you for the security of knowing you will not be stuck with an unexpected very large expense, then go for it. If you think that somehow it is likely to save you money, don't waste your money.