| MDX extended warranty, wait or buy now?
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| marcchen888 |
Just got a 05 MDX Touring with Nav.
Want to get an 7yr/100k extended warranty.
Can buy now or wait.
Does anyone know how much Honda raises the price of the extended warranty a year?
If I can make 10% a year investing this money, and Honda increases by less than or equal to 10% a year, then I would come out ahead.
Any informations or opinions would be appreciated.
(BTW, we got the MDX because we are just sick of the poor quality of MBZ and BMW.) |
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| hammermdx |
| Congrats and welcome to the family!!!!:7: Try doing a search for extended warranty and you should see some pricing from Tim of Hondacuraworld. Most of us buy our accessories from him, and I purchased an extended warranty from him for my 02 a few months back. |
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| HARDROCK |
| Welcome to the board! How much are they asking to purchase an extended warranty now? Just purchased a 7/100K for my '02 for $1880. If I remember correctly, I was quoted $2,300 for for same coverage by the dealer at time of purchase. (when I went back to them last month to get a quote they told me $2,800!) |
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| SuitedPair |
Given the reliability of Honda vehicles and the better than average warranty that comes with the MDX, I would think I am better off putting $2000 in a bank account and saving it for any problems that might arise after the warranty period ends. How likely is it that you will need to spend more than that out of pocket in the 3 years following the the end of the warranty?
Also, remember to tax effect the 10% you'd earn on the money compared to any price increases. You need to earn at least 15% to make 10% after tax. |
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| G. COLTON |
quote:
Originally posted by SuitedPair
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Also, remember to tax effect the 10% you'd earn on the money compared to any price increases. You need to earn at least 15% to make 10% after tax.
How does that relate to buying the warranty? Who is paying 50% or over in income taxes these days?
G |
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| SuitedPair |
quote:
Originally posted by G. COLTON
How does that relate to buying the warranty? Who is paying 50% or over in income taxes these days?
G
Earning 15% to keep 10% is a 33% income tax rate which I would assume is pretty close to what anyone buying an MDX is paying.
I was just responding to the quote that if the price is going to go up by ten percent for next year that you would just have to earn 10% with the money to make it breakeven to wait until next year. |
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| vlam |
You also need to ask yourself how long are you keeping the vehicle? Better yet, how much mileage are you planning to put on the vehicle?
My 04 MDX is going to be two years old in about 3 months and I've thought about getting the extended warranty. I have not and I don't I will because I have about 15K miles after 2 years. At this rate, I will have about 60K miles after 7 years. I hope I am correct but I don't forsee any major problem with that little mileage on a vehicle that's not a new design. |
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| keremoner |
quote:
Originally posted by SuitedPair
Earning 15% to keep 10% is a 33% income tax rate which I would assume is pretty close to what anyone buying an MDX is paying.
I was just responding to the quote that if the price is going to go up by ten percent for next year that you would just have to earn 10% with the money to make it breakeven to wait until next year.
Ahhh, but the wonder of tax write-offs decreases that. I made $145,000 last year and my effective federal tax rate (after all the deductions and refund) was only 11.5%.
If you are paying 33% in federal taxes, you may need some write offs such as investment property. |
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| SuitedPair |
All true keremoner, but remember the difference between your effective tax rate and your marginal tax rate. Also, short-term capital gains have their own tax rate that is not effected by deductions and stuff.
Can you please send me the number of your tax accountant? 11.5% effective tax rate is incredible! I paid almost that much in state tx. Damn you NY! |
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| keremoner |
quote:
Originally posted by SuitedPair
All true keremoner, but remember the difference between your effective tax rate and your marginal tax rate. Also, short-term capital gains have their own tax rate that is not effected by deductions and stuff.
Can you please send me the number of your tax accountant? 11.5% effective tax rate is incredible! I paid almost that much in state tx. Damn you NY!
I only pay attention to my effective tax rate because that is what I actually end up giving to Uncle Sam. Part of what gives me a break is my 130K+ capital losses (I have been carrying over from my 2000-2001 losses in the stock market and that is nothing to be envious about !
Also, state wise, I live in Virginia which has substantially lower taxes than NY. I feel your pain.
I never use an accountant. They are a waste of money. I use TurboTax Delux. It is great. |
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