Does it make sense to buy a warranty on a pre-owned Honda Civic Hybrid?
March 23, 2012 11:08 AM   Subscribe

Asking for a friend. "Jan" is buying a 2006 Honda Civic Hybrid, it has 60,000 miles on it now. The dealer is offering a warranty on said car, 6 years or 60,000 miles, for $1600. She is set on the car, but can't decide on the warranty. She has just ended one sided needy relationship with a narcissistic Mercedes with never ending issues. This recent experience is clouding her decision and I suggested turning to mefites. thank you!
posted by jennstra to Travel & Transportation (17 answers total)
What does the warranty cover? The biggest thing I'd worry about with a hybrid is the battery. If that's excluded, I'd say probably no.
posted by jon1270 at 11:14 AM on March 23, 2012 [4 favorites]

It really depends on the warranty they are offering. Tell her to ask to see the contract to take home and read so she can find out exactly what's included and excluded. Odds are it's not really a good deal.
posted by MegoSteve at 11:21 AM on March 23, 2012 [1 favorite]

Agreed on the battery. Might have a read through this forum thread - - it's quite a complex topic and there's a lot to think about in purchasing a used hybrid.
posted by fairmettle at 11:24 AM on March 23, 2012 [1 favorite]

The default position for a warranty should be no, because it is always a better deal for the dealer than for you -- otherwise they wouldn't sell it. The average payout from this warranty will be less than $1600. Occasionally the costs will be higher (possibly much higher), but the dealer absorbs these losses through volume on the warranties. It might make sense for your friend to buy the warranty for the peace of mind it will offer, but it's also possible that the warranty is a bad deal and represents a significant profit to the firm. The smaller the dealer and the number of warranties they sell, the more likely this will be true, because they will be less able to absorb losses on a bad car and will need more profits from each one to make up for it. I would pay close attention to the terms, as well as the type of dealership she is at, and how strongly they seem to be pushing the warranty. Also, nothing is stopping her from offering to buy the warranty for $1000. See if they'll budge.
posted by PercussivePaul at 11:29 AM on March 23, 2012 [1 favorite]

The dealership has to price the warranty such that the expected value of the warranty is less than the price you pay for it. If they didn't, they would lose money on every warranty they sell. In other words, from a strict financial perspective, it makes more sense to put $1600 in a bank then to buy the warranty.

If you insist on buying a car warranty, please at least shop around for them. There's no reason you have to buy them from the dealership. In fact, it is highly likely that the dealership is just acting as a middleman for a warranty vendor. Warranty Direct is one such place (no endorsement intended here, just a link).
posted by saeculorum at 11:29 AM on March 23, 2012

When Moe the Bartender hammered a crayon up Homer's nose into his brain, Moe realized the pinnacle of stupidity had been attained when Homer exclaimed "Extended warranty? How can I lose?"

But yeah. The dealer wouldn't be selling the extended warranty if it wasn't (in the aggregate) profitable. It's only profitable because on average, the price of the warranty exceeds the cost of repairs to be paid out. That said, for any individual car, it's a crap shoot -- but the odds of it being a "good" purchase are stacked against the buyer.
posted by Doofus Magoo at 11:38 AM on March 23, 2012 [2 favorites]

The dealer wouldn't be selling the extended warranty if it wasn't (in the aggregate) profitable.

This is true but not necessarily the end of the argument. Most people have comprehensive insurance on their cars, and the insurance companies are making a profit on that product and no one is calling it a scam. The hard sell, yes, that is a red flag.

In general, it's best to think of the warranty as insurance, and any insurance is only worth it if there is a small but reasonable chance that something could happen that would cost way more than you would want to pay, or have the ability to pay. On a car, the biggest cost warranty item would probably be if you had to replace the engine. That's probably under $5000, and pretty damn unlikely. So I'd stay away from the waranty.
posted by smackfu at 11:57 AM on March 23, 2012 [2 favorites]

It's a gamble. I got a 3rd party warranty with our Outback and 3 years later they paid for a $5k engine. They did make us submit receipts for every regular maintenance service and oil change, so there's a commitment there and if you don't do regular maintenance they'll try everything they can to not pay.
posted by PSB at 12:12 PM on March 23, 2012 [1 favorite]

No extended warranty. The only time these things are even remotely worthwhile are if they cover any and all regular maintenance (in which case it's worthwhile to the dealer because they want to sell services "up front" as part of a package to lock you in for the next N years). I highly doubt this is the case here.

My ultra-unreliable Saab didn't start requiring serious amounts of maintenance until it hit 120,000 miles. A super-dependable civic with 60,000 miles on it will be fine for the next 5-6 years.
posted by deanc at 12:32 PM on March 23, 2012

I think the problem is that Civics are generally more reliable than recent Mercedes, and when a person has gotten out of a relationship with a car with never-ending annoying problems, it's hard to realize that maybe other cars don't have those types of problems.

In my experience, having owned a Honda Civic and a Mercedes C-Class side-by-side, I will probably be very hesitant to ever purchase a Mercedes again due to its shitty annoying never-ending problems*; but I will have no qualms about owning another Honda, which was a fucking champ for the entirety of the 10 years I had it.

I'd probably not get the warranty in your friend's case.

If you want to know my opinions on Honda Civic Hybrids, however, that's a little different. I don't think the warranty covers this issue.
posted by jabberjaw at 12:42 PM on March 23, 2012 [1 favorite]

Only if the ext warranty covers the battery for that length of time / mileage.

Also, if she intends to keep the car a long long long while, start a rainy day fund for the main battery. $25 a week if she gets ext wty, $50 if she doesn't.

Bonus - if the car lasts long enough she doesn't have to replace the battery before the car, she's got a tidy down payment saved up.
posted by tilde at 1:35 PM on March 23, 2012

I had an '04 Civic hybrid for awhile. For me it was worth a barebones warranty that just covered drive train/battery. I know the dealership made money on me, but I've had a number of car issues in the past and it was worth the peace of mind, knowing that anything major would be taken care of.

I never actually used the warranty, but it was a nice security blanket.
posted by downing street memo at 2:23 PM on March 23, 2012

When I bought a used '06 Civic Hybrid a couple years ago, they had no extended warranty on the hybrid battery. (The hybrid battery is very expensive to replace and they couldn't give me any concrete numbers on when it's likely to need replacing.) They also said that as far as they knew, nobody would write me an extended warranty on the hybrid battery - suggesting that they don't know enough to figure out how to set the price on such a policy.

She should definitely find out if the policy covers the hybrid battery, but my guess is it doesn't.

That said, we did not purchase any warranty on ours (tho it was a certified used one, so it came with a one-year warranty that covered some things, not the hybrid battery). So far it has been reasonably trouble-free, knock wood.
posted by LobsterMitten at 3:39 PM on March 23, 2012

The battery has an 8 year/80K mile warranty. Replacement is currently $2200, dropping over time.

It's a Honda. They just work, as long as you do mantainence. Save the money on the warranty in case the battery fails - the average is 7 years, and climbing. There are original Insights on the road with 150k miles and the original battery.
posted by eriko at 5:18 PM on March 23, 2012

the average is 7 years

Where are you getting that number from? (I wasn't able to find solid numbers on this when I was looking, so I'm very interested)
posted by LobsterMitten at 5:26 PM on March 23, 2012

I have a 2003 Civic Hybrid. It has about 120,000 miles and overall it's been a great car, but in the last 2 years I've put $2500 into it for a transmission fix and a catalytic converter. Both of those were semi-known issues with Civic Hybrids. Perhaps by 2006 they figured it out, but for $1600 I would gladly buy the peace of mind.
posted by AgentRocket at 5:45 PM on March 23, 2012

Don't think of it as a warranty, think of it as insurance. Less than $300 a year to insure that you won't be hit by major repair costs. It's a 6 year old car now, it will be a 12 year old car by the time the warranty ends. I'd probably do it.
posted by gjc at 6:01 PM on March 23, 2012

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