At 06:19 AM 11/05/1999 -0600, Daniel wrote:
Any extended warranty is just a rip off. You should
understand that if it would not be the way to make additional money for them
they would never offer it to you.
This is a bit unfair. *Any* insurance policy could be characterized the same way. However, the real question is what the risk-reward ratio is for *you*. If you can afford $1150, but a $5,000 bill would be a serious problem, then maybe you should buy the warranty. If you did this 1000 times, would you "lose" money? Probably. Obviously the *insurance* company is not going to set rates so low that *they* lose. However, the spread is not huge - insurance companies make their profit by investing the premiums until they have to pay off. Direct profit from premium vs. payout is trivial.
So the deal is that *if* you could set aside the $1150, and invest is as well as a professional investor with much more money could, then you could cash your investment in when the tranny fails and have a little left over (vast oversimplification).
If you're a real tiger, you might know more about your van, and whether your particular transmission (or any other component) is likely to fail. The insurance company is probably looking at *all* VW Vans as a group. If you're at high risk, go for it.
-- Chuck (still doing research on *which* ext warr to get) '99 EVC
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Chuck Bragg, Santa Monica Bay Audubon
cgbragg@...
fax: 209-671-6396
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