Originally Posted by Buckaroo
Ok. Substitute Mopar for dealer.
Are the people that run Mopar stupid?
They LOVE selling those policies. Why?
The same reasons all extended warranties are so loved by their sellers. They get your money now to use to make money through other endeavors like financing.
They know not everyone who buys it will use it, and the ones that don't pay for the ones that do. Saying "lifetime" sounds way better than adding 4 years to provide 7 years coverage, but their cost to cover the number of vehicles not sold or written off and needing repairs is likely not that much more.
In the window between when items are not covered by original warranty and the vehicle is depreciated or sold the use of deductibles, splitting of related repairs, and exclusions such as failures related to wear items reduce their financial risk.
There costs are also reduced by factors like reduced labour and parts rates.