Maintenance agreement to buy or not.

[Roadwarrior]

Back (July '23) when making the deal to purchase our ‘21 lease buy-back auto the finance mgr was telling me about the add on for possible maintenance. The cost was my first concern then what it covered was second. I have worked in IT for over 50 years so I can relate to the chance of replacing a computer chip/part. I was investing just north of $21K for a 2 YO auto without maintenance insurance.

The maintenance cost which I’ve never purchased was close to $3.5K. I realized what a used auto goes for now & in the future with the recent round of strikes affecting the auto industry, let alone the losses incurred because of the weather emergencies. High wage demands will be met, some workers will be laid off to make up some of the extra cost. Most will be made up with price increases and resale value of newly used vehicles.

The cost comes more in line with my gamble and ROI. The cash down covered the high cost that I paid, but my thinking it gives me peace of mind. I had a 2016 auto that I could use for either trade in or gift to my g-daughter. After I decided to gift the g-daughter I looked up the value on nadaguides.com thinking it was worth a lot less than they quoted. She made out like a champ but I actually felt pretty good about the gift.

I plan on having the ‘21 paid off in Dec ‘24. But hope to keep it 10 years. That way I can recover almost all with free oil changes for life. @ 4 per year with an estimated savings of $75 per change. $300 per year x 10 years = $3,000. First one was today at the dealer’s. They thoroughly went through a checkup along with service. They checked the tire pressure, helps with MPG. Cost - $0.​

 

[Robb.hisself]

In these inflationary times it sounds like a good idea to lock down your price as best you can. Also, since it gives you peace of mind it serves you well. Sounds good to me. Best of luck with your vehicle.

We are at over $7.00 per gallon of gas nearly everywhere in Los Angeles, California. Which means the rest of the nation will eventually follow. And, which means prices on everything will continue to rise. Washington D.C.'s pronouncement that inflation is receding is only a dream for the presidential election year next. After that reality will bite once more. You've made a wise choice.

 

[againstthegrain]

First of all the price of the maintenance agreement is negotiable. Secondly those "insurance policies" are going to be hard to collect on.

Put the $3.5K in a cd and use that for your repair fund.

 

[Roadwarrior]

First of all the price of the maintenance agreement is negotiable. Secondly those "insurance policies" are going to be hard to collect on.

Put the $3.5K in a cd and use that for your repair fund.

That's exactly what I used to make the down, payoff nearly 50% of the original financed & position myself to payoff the entire loan in 16 months. @ just over 8% interest on the original financed I used my 3-4% ROI CDs. Now waiting on the IBond to mature in 30 days & will use that to replenish my CapitalOne savings @ 4.3% (which is almost equal but more available than the rate now of IBonds), That'll be used that for other things such as food & other unexpected expenses. Still have my 401K, pension & SS. I think I've got enough of a tax headache before me. It's all sixes,

 

[garyt1957]

In these inflationary times it sounds like a good idea to lock down your price as best you can. Also, since it gives you peace of mind it serves you well. Sounds good to me. Best of luck with your vehicle.

We are at over $7.00 per gallon of gas nearly everywhere in Los Angeles, California. Which means the rest of the nation will eventually follow. And, which means prices on everything will continue to rise. Washington D.C.'s pronouncement that inflation is receding is only a dream for the presidential election year next. After that reality will bite once more. You've made a wise choice.

Thankfully the rest of the country does not follow what happens in California. So no, I dont expect $7 gas any time soon