Do car dealers make money from selling extended warranties?

Question

I'm going to the Chrysler dealersip tomorrow to purchase an extended warranty for my dodge charger. (I bought the car from a private seller).

I'm curious if the sales person I'm dealing with makes some kind of commission from selling the extended warranty.

Thanks.

Answer 1

Yes, they make a very good profit on "aftersells" or extended warranties. Both the dealershp and the sales person makes a commission. When purchasing a "used car warranty", which is basically what you are doing make sure you know what is covered and what isn't covered. Used car warranties are not as thorough with the coverage as new car warranties. Get different prices on the different deductables, sometimes it is worth getting a higher deductable and paying less for the warranty, than a lower deductable. Do the math. Also check out the different mileage vs. length. Sometimes you put more miles on a vehicle in less time, sometimes you need the time rather than the mileage if you don't put a lot of mileage on your car. Depending on the dealership, some dealerships will push their own warranties, and not a Chrysler warranty. Usually a Chrysler warranty will cost more, but it may also cover more, so check both out thoroughly. If you go with the warranty company that is not a Chrysler warranty, make sure you can take it to any Chrysler dealer to have it honored. Sometimes the dealership warranties are only good at certain dealers. And sometimes, you get reimbursed for the covered repairs instead of the warranty paying the dealership. So you will have to put money out to get your car fixed.
These are just a few suggestions that may make your purchase easier and get the best value for your money. Hope this helps.
Good luck.

Answer 2

1

Answer 3

You bet they do. the profit margine is higher than the actual car.
Example: A typical after market used car warrantee for 3mo. 3000 miles for drivetrain costs dealer around $90. to $110.
The retail price is about $400.

Answer 4

You Bet They Do!!!! There i more money made on the "back end " of a car deal then on the sale of the car its self! This is true especially on new cars. They make money on the financing, accessories, extended warranties, and anything else beyond the sale price of the car

Answer 5

You bet! In fact, it's often pure profit.

Answer 6

Yes. They certainly would not do it for free.

Answer 7

They usually do.