Do you think your car insurance companies are losing money? Do you think life insurance companies pay out more than they take in?
Why would you think auto warranties (insurance) would pay out on average more than they take in?
People buy it because they have the money and don't want the hassle later on. "What if" is not a question people like to worry about. This gives them some peace.
People buy it because they have the money and don't want the hassle later on.
LOL. I guarantee you that if you're upfront with customers and tell them how many people spend more on the warranty than they would have spent on repairs, almost nobody would buy it. That's what I mean about being sleazy. Dealerships would rather sacrifice one of their own children than give the customer that kind of information.
Unless there's a genuine, clinical issue with someone's cognitive function they're not going to say, "I'd rather pay $1,000 now so I don't have to pay $300 later."
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