First, the advisory. This is not guaranteed to work in all cases and you can get caught out, especially if you start from no money at all. However, it has worked for me and I see my theory has other supporters. (Not that I claim to have invented this, I just started doing it years ago). It also needs discipline!

Say you buy a car or a fridge. The warranty the seller tries to get you buy is say £500 for the car and £50 for the fridge. There is a reason for those figures. An actuary has worked out that most repairs will come in under those figures and built in a profit margin and costs for the warranty company. So the actual cost of the warranty may be £400 and £40.

Instead of handing that money over to the warranty companies, I put it into a separate savings account (not one with a bank). That starts to build up a fund, which now I put between £50 and £100 a month into, especially when it is under £500 and will stop paying if it hits £1000. I include vehicle servicing and repairs as well as breakdowns in my warranty. If you only want to cover breakdowns you could put in less. It is important to keep the fund there for repairs and things that warranties are for and be disciplined not to raid it for other stuff.

The big advantage of self warranty is my warranty pays out immediately with no fuss and no matter the circumstances. I have twice been in garages as car owners were told their warranty did not cover the cost of repair and it was clear they had no other means of payment. The next advantage is I keep the money and so if there is no claim, it is still mine. I have not been caught short in 20 or so years of doing my own warranty. Even if were to be caught out, the fund would ease the blow, which is the risk when you start off and have a small fund.

I am not alone in doing this

www.fivecentnickel.com/2009/09/28/create...ended-warranty-fund/
www.consumerismcommentary.com/how-to-cre...n-extended-warranty/

and the principle is based on risk management and self insurance used by many companies and public bodies. Hopefully you avoid having to go here to get redress as warranties are yet another financial product that has been mi-sold.

www.bbc.co.uk/news/uk-wales-21928645

www.financial-ombudsman.org.uk/publicati...nded-warranties.html

I guess you are right but there are seperate car warraties that you can buy that are sure worth it

For example , £500 for warranty for car , slipped timming chain/belt could lead to over a £1000 of work , I could print many more


You can purchae insurance for tyres also

some tyres I sell are £300 , if you pay £350 for the cover and claim 2 tyres , well doesn't take a genious to work it out

that is pretty interesting

cheers bf

looking into it now

scaltura wrote:
I tend to buy new or nearly new, so the risk of things breaking down is lower. I must admit if i were to buy tyres for £3k I would be tempted with the warranty as tyres are more at risk than say a fridge from being wrecked! As for the timing belt scenario, it depends on how much you feel you can save and weather if there is a big bill. You have to do your own risk management and work out what is best for you.

The big choice is, do I hand over £500 and maybe never see it back, or do I keep it and risk paying out £1000. With a new car or well maintained one, I would keep it. If you buy known unreliable vehicles or older ones, maybe the £500 is well spent on the warranty. So do research



The thing for me is that risks of breakdowns have declined year on year for all sorts of good from cars to fridges. But people still get sold warranties like the old days.

auto.howstuffworks.com/under-the-hood/di...less-problematic.htm

"In the United Kingdom, for example, the average cost of maintaining a car declined by 13 percent between 1997 and 2009."

In the past week in work I have had 2 vx corsa's just out of warranty

blown head , on both (que abs)

corsa 4 years old needs new ecu at around £1000

new or nearly new doesn't mean it has less chance of breaking , it means that when it does fail it may cost much more as technology is newer and more expensive

trust me it's my job

Some bulbs on some newer cars are £200

Barnfish wrote:
I can say from experience this chart should be a pie chart , pie in the sky chart

audi and vw are nearly the same cars , and they share mostly all common faults , so to have them so far apart is very misleading as far as I'm concearned

there is some truth in the fact that newer cars can have expensive problems, however, car warranties have so many get out clauses nowadays. I knew someone with a warranty on a car when the gearbox failed, despite full manufacturer service history and a mileage of around just 70,000 miles or so, warranty company did not pay, they said it was fair wear and tear, not a defect!

Another great get out some of them have, is where the car needs £1000 of labour to determine the cause of (say) catastrophic engine failure, where the garage will have to strip engine down to get root cause of the problem. Many warranty companies will ask you to pay for this "investigative" work out of your own pocket to determine whether or not the damage is covered by the warranty!

I just buy a car thats under £1000 to begin with, when its buggered I go out and buy another one.
Problem solved.
Same goes for appliances etc, I just stick with cheap tat.
Ofc having been to college and trained as a mechanic its easier to spot decent-ish ones and repair most issues myself.

Some older cars are surprisingly reliable compared to newer ones.

andyh wrote:
bangernomics - I'm a huge fan myself

diforumreject wrote:

Theres 2005-6 ford sedans around here that were 40k odd new going for 2k aud now. Yes many of the real cheap ones are white ex cabs but it means they have LPG as well as petrol, and most have had low k engines and trans fitted to replace the original.. and the parts cost next to nothing, even entire s/h engines are a few hundred bucks, thats it... and the cars look and feel pretty damn new still...

05/06 is fairly new to me actually lol They're usually around £1500 to 2500 ish for most 05/06 cars, theres a few exceptions ofc for less well liked models.

I'm usually aiming at cars from the 90's, jap cars seem to do well from around then.

The 70's and early 80's have some staggeringly good cars but they're bloody expensive now, going up in value instead of down due to classic status ofc, cheaper insurance, road tax etc.

I have noticed actually that a lot of local rags no longer do the local classified ads with cheap cars that they used to do, instead they link to autotrader etc which is a shame. They seem to be transferring to gumtree and preloved.

Theres a lot to be said for old cars, no electronic bullshit, simple repair jobs. Your worry is basically body rot, mechanical problems are rarely an issue with them and thats the way I like it. If they have any rot visible I walk away from them because chances are once you start grinding back to good metal its like swiss cheese and falling apart all over the place.

I pretty much view cars like this:



Although I appreciate some people need them.

If you live rurally then they're pretty much essential aye.
The biggest expense I have ever had with cars has been tax/fuel/insurance, never repair costs.

a great UK bangernomics buy is the honda accord 2000ish model, can get a mint condition lowish mileage example for well under a £1000 with full service history.

One of the most reliable cars you can buy, would compare very well even to new models in terms of reliability, with years of use left and virtually zero depreciation (often the biggest cost of cars)

example www.autotrader.co.uk/classified/advert/2...of-doors/5?logcode=p

Yeah thats exactly the sort of thing I'd be going for, right price too.

If it last a year and you can get rid of it for 1 or 2 hundred who gives a shit right?

People who pay thousands for cars have got it all backwards imho, or they just have more money than sense.

My car is 17 yrs old, and still going strong. Good old Mazda

I buy cars with known faults for peanuts, do all the work meself and regularly blast past folks in their new money pits current one i've had for 9 months. Cost me 200 and a fortnights worth of evenings. Oh and a favour to a mate, which i would have done anyway...
The best warranty is yours and your friends skills.

Edit. When i am done with it, i'll break it and sell the parts on ebay. If past form is owt to go by, i'll end up in profit by the time the lorry takes the shell...

the funny thing is, when you talk to many people about saving money on cars, a lot of them think the cheapest way to carry on motoring is to borrow £10k and buy a newish turbo-diesel with great fuel economy, or get a brand new version on some sort of lease. They conveniently forget that you can buy a lot of fuel for those £300 per month repayments.

A £10k ford or vauxhall turbodiesel doing 50mpg will be worth around £3-4k after 3 years of use, so car costs around £7k
an old accord or similar costing £1k and giving 30-35mpg that self destructs in 3 years, costs around £800 (after scrap value)

even when you factor in the better mpg, the newer more economical car costs thousands more, but people still rave about how they are getting 60mpg on a long run and how much money they are saving! How can borrowing money and paying interest make you better off?