Extended warranty?

[markzorad]

Just wondering about those of you that have purchased and extended warranty on your brand new boat?
Was it worth it?

 

[Cessna172]

My extended 5 - year warranty on the Volvo D4 expires in one week.

Never had to use it. But, is it worth it? I slept better at night with the coverage.

Regards,
Gary

 

[markzorad]

Thanks for the reply Gary.
I did get the Volvo extended warranty as well.
I guess I should have been more specific. Was referring to the extended actual boat warranty that covers all the other things, refers, water heater, electronics etc...

 

[Capt’nKarl]

I did not have the option to buy an extended warranty for my boat but would have done so if it was available. On a side note we did purchase a 4 year extended warranty on our VW EOS convertible. It cost several thousands and had a zero deductible. Three years 11 months and 20 days later while on a trip in the NE the engine basically blew up. Everything except spark plugs was covered under the warranty. That was the only time we used it but the cost of that one repair bill more than covered the cost of the warranty. My 2 cents.
Karl

 

[SJI Sailor]

We got the extended warranty for "everything" with our C30 because the cost seemed reasonable relative to the potential risk and the cost of the boat, because we had no good basis for expectations with powerboat systems, and generally in order to have less worry.

We have not used it at all -- so far! I'm not sure whether I'd do it again, maybe 50/50 odds (but also wait and see how the remaining couple of years go).

 

[markzorad]

Thanks for the input all.
I think I'm going to pass as I am a DYI kind of guy.
Have never had any of our other boats in the shop.
Was thinking along the lines of SJI as to cost of warranty relative to the cost of the boat.

 

[knotflying]

Insurance is for those who cannot afford the loss. If you think a major issue will arise and you won't be able to absorb the cost in your budget then get it.

 

[SJI Sailor]

I would disagree somewhat that insurance is about not affording repairs -- I see it as about paying for a reduction in risk. It replaces a larger spread of potential costs with a lower spread, and that yields (for example) more predictable cash flow/spending and less unknowns. If one can't afford to fix a boat, it might be better not to get a boat!

OTOH, I definitely agree with the underlying idea that if one can afford repairs, then it is better on average not to pay the extra for insurance ... if we are only considering expected $$ and not the other aspects.

 

[knotflying]

I would disagree somewhat that insurance is about not affording repairs -- I see it as about paying for a reduction in risk. It replaces a larger spread of potential costs with a lower spread, and that yields (for example) more predictable cash flow/spending and less unknowns. If one can't afford to fix a boat, it might be better not to get a boat!

OTOH, I definitely agree with the underlying idea that if one can afford repairs, then it is better on average not to pay the extra for insurance ... if we are only considering expected $$ and not the other aspects.

I'll bite, isn't risk, costs, cashflow etc. all about the money? Depending on what is covered, an extended warranty will not prevent a problem it will only fix it at no or reduced cost, . If the engine fails you will still be stuck in the water waiting for a tow. You may not have to pay for the tow or the repair, but you never reduced the "risk" of the failure. You never reduced the risk of the boat being out of service either. You only reduced the risk of spending money on the repair. Hence if you can't afford a major repair or replacement of an engine at about 25k then buy the warranty. The irony is you won't be happy until you have a problem or sad that you never needed it.

 

[gwishon]

Mathematically, risk is the product of (the impact of an event) * (the likelihood of an event occurring). Impact can be measured in dollars, time, or other parameters. Likelihood is the odds. Insurance is a wager — the seller is betting the buyer won’t experience an event, the buyer is betting he will.

Gordon

 

[BB marine]

I am the guy that always upsets the F&I manager at the car dealership. I listen to the extended warranty sales pitch and then say no thank you !!! The sales pitch continues and my NO THANK YOU'S get louder! Needless to say I'm not the fan of the extended Warranty.

The exception is MANUFACTURES marine engine extended warranty. Not an aftermarket extended warranty. Why? Most Manufacturer extended warranties are the same as the original warranty extended to the given policy years. The Volvo extended warranty was 5 years or 1000 hrs. Most of the smaller displacement diesels are marinized automotive engines put into a marine environment. The blocks and internal components rarely suffer from the marine environment, except the fact that the engines are operated under much higher loads in the boat. It is most of the bolt on components that suffer from the marine environment. Alternators, starters, belt adjusters, turbo's, relays, sensors..... The engine is operated by (Fly by wire) completely electronic. In a perfect world with a dry well maintained engine compartment this should not be an issue. But it can be. The cost of marine engine repair and its availability to locate a dealership and parts is not always the same as the automotive industry where there is a dealership on many corners of many towns. Most marine engine Warranties guarantee parts availability within 3 days if the parts are available on a self somewhere in the country. In the case of the Volvo diesel warranty 3 days for parts and they will pay travel expenses for the closest dealership to come to the boat and repair it.


I did have the Volvo extended warranty. I negotiated the warranty into the price of the boat when I purchased it. Did that pay off? Yes! it did pay off but the experience was not as good as it could have been. We were in Canada when we had a turbo hose failure. This is a big job to replace. The Volvo repair center was not the best at fulfilling the Volvo policy of 3 days part availability. I was able to patch the hose enough to motor the boat back to Michigan and then contact a Volvo dealer. The Parts that totaled more than $3000.00 were Available in 2 days and the repair was completed. This did require a complaint to Volvo Penta Customer Relations explaining my experience in Ontario Canada. ( Little Current).

Is the warranty worth it? For me it was all about having the insurance that if something failed on the engine I would be able to get parts ASAP. I can't remember the exact price (3500.00 comes to mind) but that cost was less after negotiating it with the price of the boat.( I actually think I got it free because of a boat show promotion) Nothing is free but it was a good deal!!! I looked at it as peace of mind that I would not encounter any high engine repair cost for 5 years of ownership. In my case I had peace of mind. I also had a claim to justify having it.

When I worked in the marine industry as a technician. I alway recommended new boat owners to get the warranty. Most boat owners are not purchasing a new boat to break down but in the event that it does they would have no idea how to fix it. The Parts and labor is expensive. When you purchase a 250,000.00 boat and 2.5 years later a reverse gear or Lower unit failed because of a seal spending 6K or7K for a replacement hurts!!!! Use Gordon's equation to make your decision!

 

[SJI Sailor]

Experience also changes the perceived risk -- a first boat has higher uncertainty (from buyer's POV) than boat #6!

Life insurance is an example that shows risk management as opposed to paying for repair. Everyone can "afford" to die, strictly speaking. The unknown is how much will be left to others. That can be somewhat managed and made more predictable through insurance -- at the cost of a lower on-average expected total $$. If the goal is only about money, it's a losing bet on average. However, there may be other goals that influence the equation! Those are likely to change over time. But I digress.

That's why I might or might not get an extended warranty again. I would lean towards not -- and usually don't for most things -- but can see both sides. (I also note that it might help reluctant partners be less reluctant about boat ...)