Question: I am trying to buy a 1991 Accord with 60,000 miles from a Chevrolet dealer 25 miles from me.
The dealership is telling me that the bank probably won’t finance a 3-year loan on the car unless I’ve got a warranty to cover the full 3 years of the loan. They want to charge me $1,500 for the warranty — presumably one that only works if I bring the car to their dealership.
I think that is crazy. Most repairs wouldn’t justify dragging my car 25 miles and paying whatever deductible ($100?) to have it done at the Chevrolet dealership.
Here are my thoughts:
(1) It could all be BS. Just a sales tactic to tie the warranty (which I don’t need) in with the financing (which I do need). If anyone could tell me for sure, it would make the rest of my decisions a lot easier.
“Yes, the banks need such protection on older cars,” OR “No, every dealer claims that, but it’s usually untrue.”
Assuming it’s true…
(2) Would a larger downpayment (and therefore a smaller loan) protect the bank enough that they wouldn’t fear for repair costs?
(3) I could go out and buy a less expensive warranty on my own, somewhere near my home. If so, where? The local Honda dealer? Through AAA?
I’m hoping people won’t just respond by telling me I shouldn’t buy from a dealer, finance through a dealer, etc. I’m just trying to figure out the best way to go with the “banks need to see a warranty” issue.
Please help: How much should a 3-year warranty cost on a ‘91 Accord?
Thanks in advance.
Answer: $1500 for a three-year warranty sounds kinda like BS. To see what the bank requires for a loan, call them. Ask for a loan officier and see what they say. Most banks have been swallowed up by bigger banks, so it may take some phone calls to get an answer. Or just call a smaller, local bank. Should be a human there who can give you an answer.
As for the $1500, this is pretty much pure profit. I just spent last night at a new car dealer looking at cars, and it reafirmed what scumbags dealers can be. they are full of it….i bought a 92 accord last year, got 42 month terms for the financing, paid about $3000 less than blue book at the time, and told them to shove their warranty…thay wanted $1000 for a 24 month warranty and it would add about $40 or so to my payment. they are trying to sell you something that you do not need and if they are tieing the warranty to the loan they are lying to you.
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