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Third party products are more properly called insurance policies as by definition, the only entity that can offer a warranty is the manufacturer of a product.
The difference in price is instructive - the old saw is - you get what you pay for.
When we purchased a gorgeous, fully loaded '86 Chevrolet Caprice with low mileage, I was a bit leary as to why someone traded this car in. So I got a 3rd party policy. In the next two years, the overdrive automatic transmission failed three times - the third time, the case was even cracked and the bill was $5200. We never had any other problem with the car, but we made about $8000 on the policy. The car was actually so nice that a friend of a friend who wholesaled cars purchased it from us for $500 over book value. He approached us to buy it as he had a customer that wanted this land yacht.
Because I followed Brickboard for several years before buying our first 855 a '95, I purchased a 3 year 3rd party plan for our first 855. In the first three years that we had the car, all it needed was a new ventilation fan - a $1000 loss for us.
Out second policy was own our low mileage (49K) '96 854. when it blew a head gasket at 1000 miles before the 4 year policy ran out, the job was covered to the tune of just under $3000 - a $1500 victory for us.
Our last policy was a 3 year plan for our '96 855R ( a truly great car in Fire Red ). In the first 60 days that we had the car we had almost $4000 of repairs done - I do wonder what the 3rd party thought about this chain of events. After that, we drive that car for 11 years and never had a repair that was not due to wear and tear.
If you have read this far, one point that I would stress is that the 3rd party relationship can depend on how good your relationship is with your dealer. I enjoy a great relationship with my dealer, Lovering Volvo in NH.
We did not extend our warranty on our new '12 XC70 as we know all of its history.
We have received good value for the four policies that we purchased.
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