high price for extended warranty?
10-16-14, 06:39 AM
#16
Lexus Champion
If you are not already contributing to an IRA, the best place to put extended warranty money (and all money that would have been spent on other extended warranties) is in Roth IRAs for you and your spouse. Over your lifetime you will come out way ahead, especially if you buy high quality stuff like Lexus RX cars. BTW, if you do have an expensive repair later, you can always withdraw your Roth IRA contributions with no taxes or penalties.
There are a lot of people who buy all those extended warranties that say they can not afford to max out their retirement plans. These people are doing it backwards and might end up eating dogfood if they live long enough. They should think more about growing their own wealth instead of padding the pockets of the folks who sell extended warranties! That's a sincere opinion from a guy who never failed to max out all retirement plan options for him and wife. We are now enjoying a nice retirement with income 130% of what we earned in our best income years.
There are a lot of people who buy all those extended warranties that say they can not afford to max out their retirement plans. These people are doing it backwards and might end up eating dogfood if they live long enough. They should think more about growing their own wealth instead of padding the pockets of the folks who sell extended warranties! That's a sincere opinion from a guy who never failed to max out all retirement plan options for him and wife. We are now enjoying a nice retirement with income 130% of what we earned in our best income years.
10-16-14, 07:22 AM
#17
if you invest that 3k for 4-8 years you'll most likely win more. Also, IMO if you need to buy extended warranty for a specific item it pretty much means you cannot afford it....
for Toyota/Lexus I wouldn't sweat getting one. For my IS the only thing that broke down in 8 years cost $$$$ was the navi screen. Even with that still worth it not get the extended warranty.
for Toyota/Lexus I wouldn't sweat getting one. For my IS the only thing that broke down in 8 years cost $$$$ was the navi screen. Even with that still worth it not get the extended warranty.
10-16-14, 07:21 PM
#18
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Keep in mind that the investment argument needs to be liquid at any time over the life of the forgone extended warranty contract to make a fair break even analysis between the two.
Roth is certainly a great idea if you can invest in one - there are maximum income restrictions.
Next best thing would probably be muni bonds as those don't have an income restriction. Problem with those is if you impose the liquidity constraints, your expose yourself to interest rate risk. If interest rates increase relative to what they were at the time of purchase, then you'll have to sell them at a relative discount to attract buyers to your measly coupon rate.
Roth is certainly a great idea if you can invest in one - there are maximum income restrictions.
Next best thing would probably be muni bonds as those don't have an income restriction. Problem with those is if you impose the liquidity constraints, your expose yourself to interest rate risk. If interest rates increase relative to what they were at the time of purchase, then you'll have to sell them at a relative discount to attract buyers to your measly coupon rate.
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