Third party extended warrantees are THE highest margin item a bike dealer, car dealer, consumer electronics dealer, furniture, carpet or appliance dealer sells.
Why are they so high margin? Because the third party wholesales their "product" to the dealer for FAR less than its consumer-perceived value. The consumer believes that third party warrantees carry the same weight as manufacturers' warrantees. And often, as in the case of the $1,300 "Lexus Gold Extended Warranty" that I was sucked into buying at time of my cage purchase, the third party warrantees are even BRANDED with the manufacturer's name and logo so as to appear as if they are backed by the manufacturer.
Is the Suzuki extended motorcycle warranty TRULY a factory-backed product, or is it really a scam by a pack of sleaze balls sitting in a grimy office over a warehouse sniggering at the marks they call customers and eagerly awaiting their next chance to tell a claimant to kiss off?
Inevitably, some time after your manufacturer's warranty expires, comes extended warranty claim time and with it your explanation as to why third party warranty companies can wholesale their product so cheaply...they just don't pay claims. They will openly laugh at your claim and fax you such a barrage of exculpatory verbiage that you will throw up your hands and scream "What an fool I was to get sucked into buying this worthless piece of paper!"
If a company with such a sterling customer service reputation as Lexus will do this when selling a $75,000 car, what do you think a tiny cage and bike maker like Suzuki will stoop to?
Not that I'm prejudiced or anything. Consumer Reports magazine, to which I religiously subscribe, repeatedly warns against wasting your money on extended warrantees.
I would love to hear from anyone who has had a third party extended warranty provider pay up cheerfully on an expensive warranty claim.
