Dealer Used Car - Customer Care Plan Worth It?

themadman on 25/01/2023 - 13:08
Last edited 25/01/2023 - 13:36

Hi all!

It's my first time buying a car over $7,000, so I've never really had to deal with this before and would appreciate some advice.

My partner and I are purchasing a 2020 Mazda CX-30 with 24,000km's for $30k from our local Mazda dealership. It comes with the remainder of a 5 year factory warranty (I believe the car was purchased in 2021, so ~3 yrs remaining). They're offering a "Customer Care Plan" which includes 2-3yrs of cover once the factory warranty expires.

It seems like a nice insurance policy to me; the premium 3 year/200,000km cover includes

  • $5k claim limit (comprehensive list of parts covered - can add photo of list if it helps)
  • total claims < $30k
  • 5 year Platinum roadside assistance
  • $500 service/tyre credit

Servicing must be completed "within Eager's Automotive network" with a cost of $249 for my vehicle type (med. passenger).

The cost to purchase the Premium 36 Customer Care Plan is $1895. Would you go with this, or is it not worthwhile?

The way I'm looking at it, the vehicle would be covered for any issues until late 2028 (5yr+3yr warranties) which is nice to not have to worry about. Will the $1900 cost pay for itself?

EDIT: First 2 pages of extended warranty

Automotive

Comments

  • Euphemistic on 25/01/2023 - 13:14
    +8

    It’s more of an insurance policy and will often have a long list of exclusions. The $5k claim limit likely wouldn’t cover an engine or transmission replacement which is probably what you’d want the policy for.

    Having to be locked into a particular service centre also sucks, and if you are a tiny bit late they could also deny your claim.

    IMO not worth it. Mazda is pretty reliable.

    • themadman on 25/01/2023 - 13:37

      I've just added the first two pages of the warranty which details what parts are covered. There's a bunch in there for engine. The text with a black background is part of the "Premium" I'm considering for $1.9k, while the white background stuff is all covered as part of the sale (no additional cost).

  • Drakesy on 25/01/2023 - 13:21
    +1

    What Euphemistic said, if it were a euro i'd be taking as much coverage as possible but as its a Mazda i wouldn't bother.

  • altomic on 25/01/2023 - 13:27

    how long are expecting to keep the car?

    • themadman on 25/01/2023 - 13:38

      I mean, I haven't really decided. I'm still new to the whole new car thing. I was thinking of selling it ~150,000kms so maybe 6-7 years?

      • Muzeeb on 25/01/2023 - 13:48

        What happens at 150k kms?

        • SF3 on 25/01/2023 - 14:27
          +2

          What happens at 150k kms?

          Emotional damage?

        • themadman on 25/01/2023 - 15:03
          +1

          I don't know much about cars but it seems like a good number to sell at, haha?

          • Muzeeb on 25/01/2023 - 15:08
            +1

            @themadman: With a 2.0 or 2.5 naturally aspirated motor and regular servicing that car will make 300k easy.

            • themadman on 25/01/2023 - 15:11

              @Muzeeb: I guess we'll see how we go down the line. :D It has all the nice comfort features built in so I could honestly happily drive it for the next 10yrs. I'm literally upgrading from a 2006 Hyundai Getz so I don't think it'll be a struggle to live with hahaha.

  • pao2x on 25/01/2023 - 13:28
    +3

    I wouldn't

  • Muzeeb on 25/01/2023 - 13:29

    which is nice to not have to worry about.

    Insurance is all about piece peace of mind and sleeping well at night. If that's what works for you then get it. Otherwise don't bother.

    • themadman on 25/01/2023 - 13:39
      +1

      Yeah, peace of mind is definitely the key motivator. I'm just somewhat conscious of most extended insurance policies being scams and am curious as to how likely something is to break in the next 5 years haha.

  • pegaxs on 25/01/2023 - 13:50
    +10

    Not worth the paper it is printed on as the first time you go a day over or a km over the service time, there goes the warranty. They will give you every reason in the world to not honour it.

    • themadman on 25/01/2023 - 14:57

      This makes sense tbh. I'm not the most proactive so my servicing is often a little behind schedule which might make this meaningless as you say

  • bobbified on 25/01/2023 - 14:30
    +1

    I wouldn't take out the additional third party warranty with their long list of exclusions. The remainder of the official new car warranty (3 years) is more than enough to cover the possibility of you buying a lemon (which is usually the biggest risk when buying a used car). Anything that's wrong with the car now would have already appeared by the end of the 3 years.

    • themadman on 25/01/2023 - 15:04

      What are the exclusions you're thinking of?

      • bobbified on 25/01/2023 - 15:38

        I remember seeing the drivetrain components being on some warranty exclusions. The drivetrain is a pretty big part of the car and the likely thing that's going to breakdown. The other thing is the conditions they put on the cover, like where you have to service the vehicle.

  • CurlCurl on 25/01/2023 - 14:31
    +7

    Good grief another one. Absolute waste of money. The car has three years warranty on it from Mazda. The only people it's good for is the car yard, salesperson and the dodgy 'insurance' company.

    DON'T DO IT.

    This is the Eagers group. Eagers merges with A.P. Group Ltd, a company of which Mr Alan Piper was the majority shareholder, operating Ford, Toyota, Honda and Land Rover franchises. Porsche, VW, KIA, Volvo, Mazda and MG Rover franchises acquired.

    Also they refused to pay back $130 million from the Covid Job Keeper.

    https://www.afr.com/companies/transport/eagers-automotive-wo…

    • themadman on 25/01/2023 - 14:56

      So the way he explained it was that the extended warranty only comes into effect after the factory warranty runs out. So it'd be ~6 years total. I imagine there's more likely to be problems in 5yrs time than in the first 2-3 years? Hence the enquiry.

      No offense, but while I might disagree with their business practices in general I'm mostly curious as to whether this specific package is worth it. :)

  • apple2016 on 25/01/2023 - 14:37

    I believe the car was purchased in 2021, so ~3 yrs remaining

    you can check this. if you have 3 yr manufacturer warranty left you dont need "Customer Care Plan" . but do get comprehensive insurance…

    • themadman on 25/01/2023 - 14:54

      So apparently the customer care plan only starts when the factory warranty expires, so I'd have 2-3 yrs factory + 3 years extended. Question is how likely I am to need $1500+ in repairs in that 6 year window.

      • CurlCurl on 25/01/2023 - 15:50
        -1

        The chance of them paying for a $1,500 repair is next to ZERO If you are concerned about a $1,500 repair maybe you shouldn't own a car.

        As they say: there is one ………………….

  • CurlCurl on 25/01/2023 - 14:45
    +1

    Warranty begins the day the car was registered.

    • themadman on 25/01/2023 - 15:04

      Yep, first service @ 3000kms was in 2021 so I'm assuming it's a 2020 model that didn't sell until plate clearance or sometime similar?

      • CurlCurl on 25/01/2023 - 15:45
        +2

        It doesn't matter if it's a 2020 model, again… Warranty begins the day the car was registered. What date was the first service?

  • spal on 25/01/2023 - 15:23

    If you do happen to take it, you should try and negotiate the quoted price. They should be able to discount either the price of the car or of the insurance, or through something else to sweeten the deal. Definitely, don't pay the quoted price without something more. This is an upsell and dealership will receive a commission to sell this. The policy document will disclose their commission.

  • Seraphin7 on 25/01/2023 - 15:55
    +2

    I always smell a rat on these sorts of deals. There always seems to be small print and/or you are getting yourself locked into all sorts of costs.

    Something like $1,895, plus $249 x 6(?) services = ~$3,400 plus any parts relevant at those services?

    The worrying thing is that once you're locked in, not only are your up for the servicing schedule, but you at least run the risk of getting gouged on parts on the way through.

    While some of that servicing cost is effectively unavoidable, this ends up being insurance that may or may not be suitable/match what you think it is where the total cost is not actually known.

    • themadman on 25/01/2023 - 17:04
      -1

      They've confirmed that servicing can be done elsewhere as long as genuine Mazda parts are used, so I'm not too worried about the servicing side of things. :)

      • bobbified on 25/01/2023 - 20:53
        +3

        When shit hits the fan, they're going to rely on what's in the documentation, not what they've since "confirmed" (assuming verbally). (You're not going to have much chance proving a verbal conversation from a few years ago).

  • Stalker on 25/01/2023 - 16:37
    +1

    As per others have said above, don't do it, but putting some money aside to help keep up with the service schedule and for unforeseen emergency repairs isn't a bad idea. Enjoy your new car! ;)

    • themadman on 25/01/2023 - 17:06
      +1

      We've already got ~$9k in emergency funds so this isn't a concern of not being able to afford it so much as what's the most economically sensible option. Majority opinion seems to be that its unlikely I'll need any major repairs, so I'm thinking of doing it how you've suggested. :)

  • AustriaBargain on 25/01/2023 - 16:59

    They probably got a supercomputer that generates the specifics of the deal to make sure it makes them more money than it costs them. Are you sure you won't want to sell this car in three years anyway?

  • t_c on 25/01/2023 - 17:51
    +3

    I asked Chatgpt for you.

    It depends on your personal circumstances and risk tolerance. The "Customer Care Plan" offered by the dealership sounds like an extended warranty, which can provide peace of mind by covering repairs or replacements of certain components after the factory warranty expires. However, it's important to consider the cost of the plan in relation to the likelihood of needing repairs.

    You mentioned that the car has only 24,000km on it and comes with the remainder of a 5-year factory warranty, which means that it's still relatively new and may not need many repairs in the near future. Additionally, the $5k claim limit and the fact that total claims cannot exceed $30k, means that the plan will not cover major repairs.

    It's also important to note that you'll need to service the vehicle "within Eager's Automotive network" at a cost of $249 for your vehicle type, which could add up over time.

    In conclusion, it's ultimately up to you to decide whether the added peace of mind is worth the cost of the plan. It may be worth considering other options such as savings account or self-insuring, but it's a good idea to weigh the potential benefits against the cost of the plan.

    • themadman on 25/01/2023 - 19:41

      Not bad advice…!

  • Brick Tamland on 25/01/2023 - 18:24

    I'd day no. One of the reasons is that you've said that you've got emergency funds available. These insurance policies are useful if otherwise not having them would have a severe financial impact. Since you got savings it's not something thats really vital for you. Additionally, Mazda's are pretty reliable and the car is still very new so the risk is likely quite small. On top of that you've still got heaps of factory warranty left. Also dont forget that you may still have rights under consumer law after the factory warranty expires.

    • themadman on 25/01/2023 - 19:43

      Yeah, it's not so much about risk mitigation for me as it is finding the most economically sensible path. Thanks for the advice!

      It actually still comes with free 2yrs limited extended warranty after the factory warranty expires, so I wouldn't be completely without cover. :)

  • lachhelix on 25/01/2023 - 18:39

    Don't bother unless it's a property extended factory warranty or its free - too many hoops to jump through otherwise

    • themadman on 25/01/2023 - 19:44
      +1

      There is a free limited warranty or a "Premium" one that I've described. The free one has a much shorter parts covered list, so not sure how useful it is but I guess it's still something…!

      • lachhelix on 26/01/2023 - 01:23

        At least it's something (and it's free!)

      • kiitos on 30/01/2023 - 08:42

        But do you still need to service the car through their specified mechanics in order to be able to claim on the free warranty?

        • themadman on 30/01/2023 - 12:09

          Neither required using their mechanics for warranty claims.

  • Shoocat on 25/01/2023 - 21:27
    +1

    Not worth it and not analogous to the factory warranty.

    The other thing to keep in mind is regardless of warranty validity consumer goods including cars should be fit for purpose and last a reasonable amount of time. What's reasonable depends on the part of the car - for example the radio might only be reasonably expected to last a few years, while the structural frame of the vehicle might reasonably be expected to last 10 years.

    This can be an option if you have a major issue outside warranty, especially if you've looked after the car and serviced it at the intervals specified by the manufacturer.

    • themadman on 25/01/2023 - 22:58

      Yep, that seems to be the consensus. Appreciate the input. :)

      I've never owned a car <10 yrs old before so it's nice to hear that in general I shouldn't be expecting any major issues in the first 6-8 years of ownership.

      I'm curious about your warranty comments; is there different consumer law for different parts of a car that I can claim? Or is this something covered by manufacturer's factory warranty documents?

      • Shoocat on 26/01/2023 - 08:51

        As with most legal questions it's unfortunately not very straightforward how long different parts should last. It would probably have to be a complaint made to the dealer/manufacturer to say that you don't believe the part in question has lasted a reasonable amount of time and wear. Then a complaint to the ACCC if you don't think dealer or whoever is meeting your consumer guarantees.

        There's a useful summary here on the ACCC's website.

        So this is entirely separate to any warranty or contract and cannot be negated or diminished by the vendor.

  • JIMB0 on 25/01/2023 - 23:09

    This would be worthwhile on a 10 year old Audi. But I doubt they'd offer it for that price.

  • Sinnerator on 26/01/2023 - 08:22

    Arent these $31K BRAND NEW?

    AND what are all the hidden costs with the care plan, do you have to pay for diagnostics? do you have to pay for all recommendations of fixes at services at dealer prices? eg. your brake pads are at 50% and they advise you to replace them all at $2000 but because it's a wear and tear item its not covered by plan. etc

  • Soundwave on 27/01/2023 - 08:32
    +2

    I work for a motor group.

    Think of it this way, Roadside Assistance, let's say at least $100 a year so $500. Plus your tyre/service voucher which is $500. For your car, that's at least 2 tyres or 2 services accounted for. So if you go ahead, that's $1000 already covered of the $1900.

    That means you're down $900 just in case sh1t happens.

    Mazda are good reliable vehicles but that doesn't mean things won't happen. We've had customers claim their customer care packages on Toyota's and Lexus and I find them highly reliable and reputable brands.

    IF you do go ahead just do yourself a favour. Make sure it's on the contract including the policy number. The amount of times the customer loses the important paperwork and trying to make a claim is a lot. So we search for the old contract and it's not on there and it just makes it harder for everyone and I blame the sales person/business manager for not doing their job properly. Even have them scan to email you the signed contract with the details so you have it saved somewhere.

    Keep the booklet with your log book and make sure your log book and and if it requires it the customer care package book are stamped/signed every service.

    Ask what service buffer you have before it becomes invalid. It usually just coincides with the log books terms and conditions for warranty. So for Toyota it was a 90 day window. 45 days before and 45 days after the due date. So as long as you service during that window you will have nothing to worry about and make sure you service only there.

    I'm not saying do it or don't do it. Just wanted to share more information other than "It's a scam". In the end, it's just like insurance. You're paying money just in case something happens.

    From what I remember the dealership doesn't make a lot of money off of these things. The third party who actually handles these packages does. The benefit that the dealership gets is, it makes the customer return to their service center for servicing which then they make money with upsells or additional work that is not covered in the log book. Because there was barely any money in it our motor group no longer does these.

    Anyways, congrats on the car.

    • themadman on 27/01/2023 - 08:53

      See this was my thought process too. :D I dunno if the servicing/tyres are more expensive with dealer, but it looked like a fixed $249 for services which seems decent. The feedback about dodgy servicing is valid, but I might just use the credit on tyres which are a bit harder to be dodgy about…?

      They made it seemed like the care plan is linked to the vehicle, so I assumed I didn't need policy paperwork to claim, so thanks for clarifying that.

      Appreciate the servicing clarification as well! If it was only 1-2 week window I would definitely struggle to stay on top of it, but if it's 90 days I should be able to handle it. :)

      Thanks for the advice!

      • Soundwave on 27/01/2023 - 09:22
        +1

        Tyres they will most likely charge a bit more than a tyre centre. But I would use the $500 for tyres. With the service cost of $249, you will know how much you are going to pay minimum. The $249 will only cover the service in the log book, so at some stage they'll tell you, you will need new tyres on top of that $249 service. You can use the voucher then and not be out of pocket as much. You can get them to quote on a tyre and then ask for a cheaper option if you think they're too much.

        The care plan will be linked to your vehicle via VIN number and maybe they meant that it won't be transferrable? Or like what you said, the paperwork isn't needed as it will be registered in their system. But best to have it on the contract just in case the paperwork wasn't filed/processed correctly. I don't want to scare you but being in sales not just in the motor industry you tend to see a lot of human error which bites the customer in the butt. I just want to make sure you cover all your bases if you decide to go ahead. The more information/proof you have the better.

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