Exteded warranty
 

I have offered my opinion on extended an extended warranty on other auto sites, so here goes again. I never buy an extended warranty; I like to self-insure. An extended warranty is just pre-paid, up front maintenance cost that you give the warrantor. They calculate an "expected" maintenance cost for the warranty period from an experience data base, charge you that plus a premium above that cost to make a profit, and invest your money accumulating the dividends so they can pay for the expected repairs during the warranty period. You pay for those repairs; you just paid for them upfront. My strategy is two fold. First to keep my money for myself as long as possible, and second to have as many options as possible in the future with my money. Having options is having power to leverage for the best financial outcome in a time of uncertainty, and we can't know the future. In any case, make no mistake about this, if you buy a car you pay the repairs, no one ever pays those costs but you.

Here's how it works. When you buy your Jaguar the price includes the cost of expected repairs for the basic warranty period/mileage. You have already paid Jaguar for that, and you can't opt out of it. That's fine. But for the extended period, there is no contract or cost required. So here's what I do. First, if I like my car and it has been reliable for 5 years, and I want to keep it, I just self insure it beyond the basic warranty. In effect I have kept the premium and invested it, so I have the initial capital and accumulated interest to repair as needed, not the warranty company. Second, if the car has been unreliable, I will just sell or trade it at the end of the basic warranty saving not enduring those future repair costs. Third, if the car has been middling for reliability, but I still want to keep it cause I love it, then I have the "option" to buy an extended warranty at that time if I wish at that time, or I just decide to self-insure and live with it. This provides maximum flexibility with my money, and I remain in control. I never buy an extended warranty up front or early. I know that some folks don't like to live with a little risk, and to each his own, but you will pay for that risk avoidance, no one but you. And I always worry that when you call upon the warranty in the future, they will find a clause that finds that item was not covered. Also what happens when you wreck your car under extended pre-paid warranty? Is any of that extended period-unused repair cost refunded to you? What if you sell it early? I hear that it may be transferable to the new owner, but am not sure. If not, then you have to recover from the buyer yourself, or maybe you sweeten the deal with it to get it done. I much prefer the simpler option.

Unhinged is also right on. It is very early in the wear cycle for most of us, so why worry? There are not well known expected repair costs available yet; my 2016 is barely through the first year of 5-year factory warranty.

Congrats; pretty much exactly what I have and I love mine: hope you do to.

Cheers,
Dave

No Jaguar holds the value. I bought my '14 V8S two years ago for 72K on the road (sticker 105k), now worth 50k. My '12 XKRS 3 years ago for 85k on the road (new 134k) and just traded it in for 55k. For an exotic it is decent money (ie cheap) for pure fun and performance a Corvette is better value, no question. You buy a 14 low mileage V8S in the 50s and I would consider that great value. It will have absorbed all the big upfront depreciation.

I am with you man. I recently bought my loaded '14 V8 S (factory sticker $105,000+) with 6,350 miles on the odometer for just over $62,000. That's a depreciation of 40% in just two years (I can't even imagine what the dealer gave the previous owner when they traded it in!).

Based on depreciation of the XK, my car's depreciation should slow somewhat from this point and will probably settle at somewhere around 30% of its MSRP at year 10 (2024), assuming it's well-maintained and I keep the miles low.

You're going to take a big-hit on this car if you buy new, but if you buy one that's 2 or 3 years old, then the depreciation going forward should equal (or better) that of a new Honda or new BMW. And you are right about long-term costs. A lot of guys/girls on this forum like to imagine they are total players and anyone who cares about depreciation shouldn't be in the game. They are totally full of $hit. That's just proof that marketing works - it convinces people to rationalize dumb decisions. Cost should ALWAYS be a consideration - in every big $ purchase. We go into this investment knowing we are going to lose money every step of the way. So the best we can do is minimize exposure, which is why I always (carefully) shop the pre-owned market for all my cars.

Of course, the upside - unlike putting the money into a piece of property, the bank, or the stock market - is that you own an absolutely amazing machine which you can enjoy at your leisure. The car just puts a huge grin on your face from the moment you open the garage and get reminded of how gorgeous it is. Then you start it and the engine growls to life before settling into a 60's muscle-car burble. The suspension almost perfectly balances the ride/handling compromise (there can be wheel slap from the back-end over large, sharp bumps, but you have to accept that when you live in a state with bad roads), the fat steering wheel is perfectly weighted in your hands and blips of the throttle produce instantaneous (and explosive) bursts of acceleration with a corresponding crescendo of engine whale. Then you realize you've hit 90 MPH in 5 seconds so you let off and the exhaust belts out wonderful (if a bit artificial) crackles and pops on the over-rev. All the while, you're cocooned in a gorgeous leather-clad cockpit with access to every conveniences you'd expect from a Jaguar. Trust me . . buy it at the right price and it's totally worth every penny!