Chrysler Powertrain warranty and other Svc contracts

New Chrysler & Dodge (Jeep too) vehicles now include a
powertrain warranty (with a deductible). Previously the
factory service contracts were available in three flavors:
powertrain, added care, and max care. Since new cars
include the powertrain coverage as a standard item, added
care and max care only are available as extra optional
coverage.

The max care and added care previously included the
powertrain coverage. Since powertrain is now standard,
you'd expect that the cost of max care and added care
service contracts to fall, since they no longer need to
cover the powertrain items.

But instead, added care and max care service contract prices
(at the wholesale level) have increased quite a bit. Was
this due to increased claims or did they just hope customers
wouldn't notice they are getting less coverage with the
optional packages?

 

I think it is because competitive pressures didn't allow them to increase
the
vehicle price to cover the increased claims that they are going to be
paying out as a result of increasing the powertrain warranty. So they
are obviously hoping that by raising the service contracts on the
other items that they will make up the additional money to cover the
increased powertrain claims. This is actually a benefit to people
who don't normally buy the added care and max care warranties.

Warranties of this length are basically insurance, and like all insurance
your gambling against the insurer, and the insurer is gambling against
you. Like most gambling the odds are stacked in favor of the house,
in this case the manufacturer. So if you choose to play the game,
you can hardly complain that your not getting a good deal. The odds
are deliberately set that you won't, most of the time.

Ted

 

With the cost of repairs these days it is easy to come out better with
the agreement. Power window failures on the 300M can easily cost a
grand and are still common. Plus the car is easier to sell if you
have a transferable bumper to bumper warranty.