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  #73  
Old 01-23-2011, 10:20 AM
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Re: "Lifetime" Extended Warranty"???

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Originally Posted by netcoolery View Post
Um, actually, no. That's a common misconception. Believe or not, assuming a competitive market, you'll find insurance is actually priced somewhat below the average outlay!

You may think that's crazy, but you are overlooking something that insurance companies understand: The concept of present value. To make it simple, let's assume you buy a policy for $1000, and they'll end up paying for $1100 in repairs over 5 years. Guess what - they'll probably make money. That's because they have your $1000 today, but have to pay out the $1100 in future years.

The industry term for this is "float". Insurance companies make their money on the float.
Actually....NO.... :-) YOU get the present value of the money JUST LIKE the insurance company does.... So, it really is an apples to apples comparison, that is, you're both getting the float .... the insurance company if you buy a policy and you if you don't buy one.
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  #74  
Old 01-23-2011, 10:41 AM
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Re: "Lifetime" Extended Warranty"???

A warranty and insurance are pretty much the same in the analysis so it really is a distinction without a difference. Analogy is life insurance....if you die early you "win" ...if you die late you "lose" (albeit are happy you lost but regret spending the money that could make your old age even better).

The lifetime warranty is the opposite, if you sell early (or your vehicle is totaled which may be out of your control or the warranty company goes BK which is also out of your control) you lose but if you hold longer the odds are greater that you win (except you're stuck with an old vehicle that you may be "anchored" to psychologically (like a losing stock or an overpriced home) when you should upgrade to a safer vehicle that may be more energy efficient which may save you money over holding onto an older car).

Another factor that one has to consider is holding periods on todays vehicles is that a major change in passenger vehicles will be occurring in the next 10 years...a technology paradigm shift. Electric cars...very low maintenance, quicker 0-60 times, now emissions at the vehicle point, etc. It all comes down to battery technology which is rapidly improving. Once the economics change to where electric cars are cheaper to own and operate no one will be buying gas powered passenger vehicles since the economics will outdate them....sorta like old versus new computers...newer more powerful computers at a lower price than the old ones were offered at.

The battery pack will be priced not as part of the sales pricing making the vehicle cheaper to purchase on the front end. Then swappable battery packs will be priced cheaper than gas on a per mile basis and the price will include the energy (the electric charge) in the battery and the a portion of the battery itself while still achieving a 20%+ savings per mile over gas. The swappable charged battery packs can be sold from trailers anywhere with each vehicle having 12-24 packs. The economics will cause gas powered passenger vehicles to become obsolete. It will happen it is just a matter of when the cost of owning an electric vehicle becomes cheaper...and that is dependent on battery technology.
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  #75  
Old 01-24-2011, 02:25 PM
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Re: "Lifetime" Extended Warranty"???

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Originally Posted by Dan JGC View Post
Actually....NO.... :-) YOU get the present value of the money JUST LIKE the insurance company does.... So, it really is an apples to apples comparison, that is, you're both getting the float .... the insurance company if you buy a policy and you if you don't buy one.
To be clear, I was pointing out that after all the actuarial analysis (which includes the probabilities of stuff breaking and when, and the probabilities of someone selling their vehicle, and the probabilities of the vehicle being totalled, etc. etc.) they derive an outlay curve for an "average" policy. If you sum the expected outlay you will find (in a competitive market) that the total expected outlay will exceed the premium -- but, as noted, the outlay occurs over time.

You are right to use the term "present value". If your original assertion had been that the present value of the warranty price should exceed the present value of the expected outlay (on average of course), then I wouldn't have made my point about "float".

So I'm afraid my original point stands.

By the way, your response brings up an interesting additional topic, which falls under the general heading of "marginal utility". And it's the whole reason for insurance (you rightly point out that extended warranties are pretty the same thing.)

In the strictest sense, insurance is a "bad bet" in the sense that you are not receiving full present value for your premium. And, BTW, that is why people with very deep pockets will often "self-insure". Most of us slobs who grind away for a living realize that we need to insure our stuff because we don't have enough money to "average out" something like, say, our house burning down

One more thought - assuming perfectly efficient markets is great for the classroom, but not always realistic. Case in point - when I bought my 1988 BMW M5 - it was a very limited production car. I anticipated that such a "one off" was likely to incur higher than average repair costs. Thus I snapped up the extended warranty that was offered, where the pricing was no different from the other 5 series, indicating that the insurer was averaging expectations over all 5 series.

Technically, this was a case of "arbitrage" where someone (me ) noticed a market inefficiency and took advantage. And yes, it saved my butt as the M5 had many costly repairs during the extended warranty period.
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  #76  
Old 01-24-2011, 02:30 PM
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Re: "Lifetime" Extended Warranty"???

I thought all the polices were fully transferable?
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  #77  
Old 01-24-2011, 02:34 PM
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Re: "Lifetime" Extended Warranty"???

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Originally Posted by Dan JGC View Post
Another factor that one has to consider is holding periods on todays vehicles is that a major change in passenger vehicles will be occurring in the next 10 years...a technology paradigm shift. Electric cars...very low maintenance, quicker 0-60 times, now emissions at the vehicle point, etc. It all comes down to battery technology which is rapidly improving. Once the economics change to where electric cars are cheaper to own and operate no one will be buying gas powered passenger vehicles since the economics will outdate them....sorta like old versus new computers...newer more powerful computers at a lower price than the old ones were offered at.
I'm glad you mentioned this, because that's one of the factors that drove me to replace my aging 98 JGC now, and to wait a while for a new sedan. I'm not going to claim that my crystal ball is clear as clear as yours, but I totally agree that major changes are coming in the next 10 years.

It may indeed be electric cars - or it might be algae-based biodiesel. I don't know. All I know is that there's a good chance that if I were to buy a sedan today (and nurse my 98 JGC along), I'd be looking at replacing the sedan in 6-7 years, and the JGC would be even older.

What I do know is that I can be really happy with a W2K for my daily driver for the next 6-7 years. Following that, it can retire to being the "third vehicle" (for hauling stuff, off-roading, etc.) for quite a long time after that.

So I think I'll be going for the Lifetime Warranty on my new Summit
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  #78  
Old 01-24-2011, 02:38 PM
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Re: "Lifetime" Extended Warranty"???

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Originally Posted by Keirik View Post
okay a few questions.
1. i just bought an 09 Overland with 13k miles on it. It's certified so it comes with the 3/36k B2B already. Am i better off getting this warranty now or waiting until it becomes closer to the time the current B2B wears out?
It really doesn't matter except the price for warranty may go up later (irrespective of your car mileage). You will get the same coverage time-wise
Quote:
2. the max care comes with roadside assistance and things like that. How exactly does that work?
Don't know for sure but I think it is pretty much the same as for 3/36,000 warranty - just call the same number for roadside assistance. Deductible may be different
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3. The price goes up with more miles on the car?
No
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4. Is there some sort of time limit on when you can purchase this? Like I have to purchase it within x amount of days of purchasing the vehicle?
You have to purchase it while your vehicle is still under 3/36,000 warranty
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5. When i order it through the website, they mail me copies of everything and I just keep it in the car with me? I'm wondering how this works.
Yes, this is how it works. You also get a card from Chrysler. This website is actually is a legitimate Chrysler dealer. Call them or email them to double-check all my answers
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  #79  
Old 01-24-2011, 03:12 PM
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Re: "Lifetime" Extended Warranty"???

netcoolery- Thanks for the replies. Enjoyed reading them. One thing to note...in my crystal ball...is that electric cars are the future. Unlike biofuels, natural gas, peanut oil in diesels or whatever other type of motor, the electric car provides the platform to take advantage of the fungibility of energy....from whatever source, it can be converted to electricity and then used in electric vehicles. Right now cars use gas or diesel and the cost to convert them is economically prohibitive to say a natural gas operated vehicle. Electric batteries can be charged from anything...biofuels, cheap coal (can you imagine running a coal powered car? LOL), nuclear, solar, wind, etc. etc. etc. Whatever is the cheapest can be "used in" an electric car via the battery. Plus, with swappable battery packs, the batteries can be charged directly at the source without powerline energy loss. I envision swappable battery packs in trailers...where the trailer is also the simple battery diagnostic and built in recharging station that can be hauled to the charging location (power plant...hence no very expensive and time consuming powergrid upgrades needed) and plugged right in to charge all the batteries. The small trailers can be set up anywhere (no environmental concerns) and when one trailer is full of drained batteries the truck comes to swap out trailers (actually before the first trailer has been fully swapped out, a second trailer arrives, and the first trailer eventually is hauled away). So if oil is cheap, we use oil, if coal is cheap we use coal. The economics will make all other car engine platforms obsolete....

Sooooo:

- Electric vehicle sans batteries cheaper then gas vehicles and much lower maintenance costs.
- Battery depreciation with electric charge per mile is less than gas alone per mile.
- Just a few thousand emission sources (power plants) to be monitored and upgraded versus hundred(s) of million(s) vehicle emission sources.
- Uses whatever is the cheapest source of energy and is flexible as to source.
- No upgrades needed to the power grid.
- Batteries can be charged in mass during off peak hours.
- Batteries can be swapped anywhere....no regulations and restricted areas like gas stations.
- Environmentally friendly since no oil changes, fluids, etc.
- Less noise pollution.
- Low infrastructure costs.
- Better 0-60.
- No change in fuel efficiency based on altitude.
- No hydrolock....had to throw that one in per that one thread.
- Etc......

It is coming......in the meantime we can put in very efficient electric generators in cars that run on gas (range extenders like in Volt) as an interim step...
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Old 01-24-2011, 03:22 PM
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Re: "Lifetime" Extended Warranty"???

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Originally Posted by ALombardi View Post
Nothing against you guys but most of the posts I see from 2011 owners is complaining.
Isn't that what message boards are all about? It is mostly people posting problems and/or researching how to fix one.
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  #81  
Old 01-24-2011, 05:45 PM
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Question Re: "Lifetime" Extended Warranty"???

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Originally Posted by Dan JGC View Post
netcoolery- Thanks for the replies. Enjoyed reading them. One thing to note...in my crystal ball...is that electric cars are the future. Unlike biofuels, natural gas, peanut oil in diesels or whatever other type of motor, the electric car provides the platform to take advantage of the fungibility of energy....from whatever source, it can be converted to electricity and then used in electric vehicles.
Didn't want to quote the whole message, but I encourage those who are interested to read what Dan wrote.

Here's a few more thoughts.

Regarding the "fungibility" of energy - Yes ... somewhat, although there are substantial losses both in conversion to electricity and then transmission of that electricity to the point of consumption.

Another interesting point about electric cars is that mass adoption, along with intelligent pricing signaling from electric utilities could actually allow the combined system (grid and plugged-in cars) to use variable energy sources (like wind farms) more effectively.

What's hard to say is how fast battery technology will advance. What kills electric cars right now is energy density (energy stored divided by weight). Chemical fuels are still an order of magnitude better.

In fact, we would not be having this conversation at all if there weren't the twin problems of depletion and carbon pollution nagging at the fossil fuels industry.

The cool thing about biofuels is that they are carbon neutral and renewable. There's some really promising results with algae - but it's WAY too early to know if this is something that could be scaled up.

My murky crystal ball says that we likely face a mixed future where all of these technologies will be in play for a while. Urban commuters in mild climates will be the first ones to adopt electric vehicles. Most will also have a gas or diesel vehicle for longer trips.

One thing you can count on is that gasoline prices will continue to trend upward, even in real dollars. This basic economic trend will drive more innovation than all the silly bureaucratic (often mis-guided) government sponsored programs will.

OK - I've had my say I realize this has drifted off-topic - it's fun stuff to read about though. Let me sneak in a personal recommendation for people interested in this sort of stuff: http://www.technologyreview.com.
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  #82  
Old 01-24-2011, 06:24 PM
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Re: "Lifetime" Extended Warranty"???

Just a few clarifications....the energy loss is fairly minimal for charging especially when charged at the source and I'd much rather have a few thousand pollution points to continually improve upon than hundreds of millions (in other words impossible to make changes for many decades in). If you think about it you can continually make environmental upgrades to the power plants which is impossible to do with the many millions of cars. Continuous incremental environmental improvements would allow cheap coal to be used allowing many existing power plants to continue. Moreover, natural gas can be used too along with just about anything from biofuels, wind, hydro, solar, you name it. Freeing cars from oil by using fungible energy sources....

Nano anode tech will pave the way for 10x's the charge capacity at 10x's the speed of recharge. Although the later makes little difference if you have 20 lb swappable battery packs...say 8 for 160 lbs of batteries with 500 mile range in total where you just swap out the ones that are fully discharged.

If you kept the batteries the same but with nano anode tech in the Tesla you would go from 244 mile range to 2,440! Obviously you cut the batteries (and their cost) by 75% or more and get 500 mile range instead. Swappable battery packs also mean you don't have to wait for your vehicle to charge...no down time.

My crystal ball is clear on electric cars....which is murkier is the sources that we will use to generate the power. The politicians' line of not knowing applies to the source of energy not that electric cars aren't necessarily the future....electric cars are the future 100% but don't worry T. Boone hasn't fully thought it out yet...natural gas for cars requires conversions that may be short lived. Electric uses fungible energy sources....

(The only caveat is to make hydrogen powered cars which, in reality, uses hydrogen as the storage of electricity as the "battery" which has some merit but swappable battery packs are much better and doesn't require the massive infrastructure changes so swappable battery packs solves the chicken and the egg problem).
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  #83  
Old 01-24-2011, 10:30 PM
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Re: "Lifetime" Extended Warranty"???

Agreed. Electric vehicles are the future but making the vehicles is the easy part. The hard part is reconstructing an aging and fragile electrical grid to support the tremendous demand that electric vehicles would place on the current grid. In the interim a hybrid solution (efficient turbine + generator + electric motor) is more practical and quicker to implement while battery technology, production capabilities and the electrical grid are ramped up. We soon need to face the reality that new nuclear power plants are needed for the energy demand forecast. Political leaders should simply clear the bureaucratic hurdles/craters and let entrepreneurs lead this development rather than politically dictate in a solution du jour approach.
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Old 02-03-2011, 10:23 PM
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Re: "Lifetime" Extended Warranty"???

Not sure what is left between "Added Care" and "Maximum Care". It seems that "Added Care" covers just about anything that can go wrong. What am I missing?
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