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Discussion Starter · #1 ·
Question: In reading my sales contract for my Honda-certified 2009 CRV EX-L the day after the purchase, I found that the dealership had slipped in a Honda "service contract" for $1800 which was not explained in detail during the sale. Very irritated, I went to the dealership and they explained the "service contract" covered all the major components (engine, transmission, ac/heating, etc.) for "7 years or 100,000 mikes whichever comes first" I decided that amortizing the purchase into the years, it would probably pay me to keep the policy, although they included it in a surreptitious (meaning sneaky) manner. They said they would void it if I so chose. I decided to keep it.

Then the contract detail documents came in the other day. It's not valid until 2019 (7 years), it's only valid until 2016 (4 years). I called the dealership and they "explained" that it was indeed a 7-year service contract, but since it was a 2009 model CRV, 3 years had already expired. Again, I fell the whole thing has been represented in a somewhat underhanded manner.

Since I have a one year "bumper-to-bumper" warranty in place since I bought a Honda-sertified used car, I would like you thoughts on whether i should keep this service contract. (If I cancel within the next two weeks, I can get a full refund) If I do cancel, I might even be able to shop around and buy the same coverage at a lower cost.

Your thoughts, experience or advice on this matter would be greatly appreciated.

Thanks,

Bama Joe
 

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I had a similar issue with my dealer, except that you got off $600 cheaper than I did. I plan on cancelling once Honda receives the paperwork. I may pick it up again, just for security, but for a hell of a lot cheaper.
 

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How does a dealer 'slip in' a $1800 charge?
I believe you have 30 days to cancel for full refund.
Cancel and buy from Bernardi or Saccucci Honda if you want an extended Honda care warranty.
I bought a Honda Care 8 yr/100K mile plan for $935 from Bernardi.No sales tax too if out of state.
With a Certified Honda,I would pass though.
 

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Discussion Starter · #8 ·
I had a similar issue with my dealer, except that you got off $600 cheaper than I did. I plan on cancelling once Honda receives the paperwork. I may pick it up again, just for security, but for a hell of a lot cheaper.
I plan to go to the dealership today and hand them back my "service agreement". Whether I decided to pick up a cheaper one remains to be seen. With all the exclusions, I don't know what would constitute a legitimate claim anyway.

Let me know what you decide Dave, and if you do buy a cheaper one, please pass along the details. Thanks so much. - Joe
 

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Discussion Starter · #9 ·
How does a dealer 'slip in' a $1800 charge?
I believe you have 30 days to cancel for full refund.
Cancel and buy from Bernardi or Saccucci Honda if you want an extended Honda care warranty.
I bought a Honda Care 8 yr/100K mile plan for $935 from Bernardi.No sales tax too if out of state.
With a Certified Honda,I would pass though.
Believe me, it's not difficult when you've been baragged with information for several hours, the terms are explains rapidly, and the service contract is tucked away in a list of line items that covered from top to bottom of a legal page sales agreement. I haven't done this in ten years and not that many times in my life. I'm no contract examiner expert by any means.

Actually, the opt out clause is anytime, but 60 days from purchase with no claims will render a full refund. Services during or after the 60 days will reduce the refund.

I certainly appreciate the other option warranty plans, and may consider one after i receive my refund. Thanks.
 

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IMO, the ONLY product worth the paper it is written on would be a Honda Care warranty. Third-party administrators come and go like the wind. Odds are good that the company wouldn't even been around to pay a claim AND if they are, they tend to do everything possible not to pay claims. Remember that it is in Honda's best interest to pay Honda Care claims within reason ... they want your repeat business, for life. That third-party administrator (insurance company) is dependent on F&I guys, nothing more, to sell the product. The ONLY profit that a third-party makes is the money that they KEEP over the claims paid. That isn't the case with a Honda warranty.

All that being said, you bought a used vehicle to save money ... it is a Honda ... it has a year of bumper-to-bumper coverage. Ditch the policy, put the money into a savings account and enjoy spending the remainder in a few years when the purchased policy would have been consumed.
 

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Discussion Starter · #11 ·
IMO, the ONLY product worth the paper it is written on would be a Honda Care warranty. Third-party administrators come and go like the wind. Odds are good that the company wouldn't even been around to pay a claim AND if they are, they tend to do everything possible not to pay claims. Remember that it is in Honda's best interest to pay Honda Care claims within reason ... they want your repeat business, for life. That third-party administrator (insurance company) is dependent on F&I guys, nothing more, to sell the product. The ONLY profit that a third-party makes is the money that they KEEP over the claims paid. That isn't the case with a Honda warranty.

All that being said, you bought a used vehicle to save money ... it is a Honda ... it has a year of bumper-to-bumper coverage. Ditch the policy, put the money into a savings account and enjoy spending the remainder in a few years when the purchased policy would have been consumed.
That's excellent advice Tampa Jim. Today I stopped by the dealership and did that very thing. The finance/service contract administrator was very taciturn during the transaction, probably not uttering 25 words. It took little imagination to see dollar signs ($$$$) flying out of his...er, uh ears. An Alabama provision states that if the refund is not received within 45 days of the service contract cancellation, there is a 10% penalty clause to be paid the car owner each month the transaction is not finalized. Pretty sweet!

If I'm ever down your way, TJ, I'll take a few bucks of the money saved and buy you a round or too. I owe you that.

Best - Bama Joe
 

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You didn't exactly make the F&I guys day. He gets paid on the bling he sells ... warranties, protection packages, financing, etc. Warranties have a steep profit to the dealership ... 40-50% on average. He gets a nice cut of that profit. If it was a Honda Care product, you should have your check within 10-14 days - they are very efficient. If it was a third-party warranty, who knows. Don't forget to put the $$$ into the bank, it will make a nice nest egg in 4 years OR if for some reason you do have a mechanical failure ... the "instant payment gremlin" will take care of it for you.

I have two CR-Vs, my new one (2012 EX-L Navi) and my old one (2000 LX). The latter has had a whopping two mechanical issues in 13 years and 175,000 miles. A door lock actuator on the driver's side (about two years ago) and the radiator (about 5 months ago). Total expense, less than $1,000. Both of those repairs were AFTER the car was past 10 years of age. I drove a Honda Accord to 255,000 with NO mechanical repairs, just maintenance. A Honda Del-Sol VTEC to 8 years and 80,000 with NO mechanical repairs, just maintenance. I have also owned a few other Hondas with NO mechanical repairs, just maintenance (not as many miles). Not that every vehicle leaving the line has such luck, but the odds are GREATLY in your favor.

Think about it ... the insurance companies are willing to sell a warranty for $1,800, give the dealer $800 or so for selling it, pay your claims and they STILL make a profit. Of course, this is based on an entire set of policies. There are winners and losers in every situation. Plain and simple, the financial odds are in YOUR favor if you don't buy a policy and in THEIR favor if you do.
 
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