MaxCare Warranty Makes Unicorn Ownership Affordable

The MaxCare Warranty, or “You’d Be a Fool to Own a Unicorn Without One!”.  Face it, the reason we’re looking at affordable CarMax unicorns is because we can’t afford or don’t want to spend the money to buy these cars new.  We also can’t afford or don’t want to spend the money to fix them when they break.  My first unicorn, the Mercedes S55,  broke a lot.  And when it did it was expensive. Over $35,000 in repairs. And I didn’t pay a cent.  So here’s the particulars on the MaxCare warranty that make it attractive:

CarMax will sell you an extended bumper to bumper warranty for anything on their lot, and that includes 10-year-old high mileage cars – even expensive and unreliable European unicorns.  

Warranties for the unicorns I specialize in range from $2500-$7,500, depending on the make, model, year, miles, deductible you choose, and the mileage ceiling you want to cover. I paid $3,500 for my S55 warranty and recovered that in a single repair.  I paid $3,000 for my Porsche 911 warranty but only selected the 75,000 mile cap.  When I sold the car CarMax refunded me $1,100 for the unused portion – wasn’t sure how that would go but what pleased.  I paid a whopping $7,500 for my Mercedes  S600 warranty but went for the max of 125,000 miles.  The car has not broken enough to cover the warranty as of 85,000 miles.  Still a bargain since some single repairs on these cars equals the cost of the entire warranty!

The warranty menu includes options for deductible preference and mileage cap, it used to always be for five years.   In March of 2021 I just saw my first MaxCare warranty limited to 48 months for this higher mileage Toyota X-Runner.  Still a lot for an 83,000 mile pickup but something to look out for.

Deductibles start at $50 and go way up. Deductibles are per visit and not per repair, so it’s best to bundle repairs if you can and go when more than one item breaks. 

CarMax waives $50 of the deductible if you turn the car in to them for repair service.  I went with the $50 deductible which was waived, and paid nothing every time I took the car in to CarMax.  If CarMax sent the car out to a Mercedes dealer or specialist, I still didn’t pay any deductible.

Mileage ceilings are not uniform.  As far as I can tell, cars with less than 50,000 miles can be covered for a minimum of 75,000 miles.  Once the 50,000 mile threshold is crossed, it seems like the next minimum is 100,000 miles and the cost increases.  Some older cars are capped at 100,000, some at 125,000 and some at 150,000 miles.  I have seen old Mustangs with low miles still be offered with five-year 150,000 mile warranties.  That’s just crazy!

The trick is to calculate how many usable miles you will get out of a car based on its mileage and the cap you choose.  For me, a car with 49,000 miles and a warranty ceiling of 75,000 miles means I get 26,000 usable miles, while a car with 51,000 miles and a 100,000 ceiling gives me 49,000 miles.   The latter may cost another $1,000 but means I can hang on to the car longer, not worry about miles driven (like leased cars), and build in a cushion to sell the car with some miles left on the warranty.   If I were a rich man, I would buy the maximum mileage and lowest deductible and know I can drive all I want and sell when I’m done with warranty to spare.  But I’m not.

Loaner cars are always provided. MaxCare suggests the car needs to be in for four days (doublecheck) to get a loaner.  Trust me, the car will be in for four days.   My dealer never, ever balked at giving me a loaner.

You don’t have to use CarMax for MaxCare warranty service. Dealers and independent shops can submit a claim and be paid directly….but they don’t like to.  MaxCare, like most extended warranty companies, sets their own arbitrary and sometime low labor rates for repairs.  Dealers and independent shops sometimes have high rates, especially when there’s a warranty involved.  When MaxCare and the dealer can’t agree on a rate, the expectation is that you will foot the bill for the difference.  I once took my car direct to a Mercedes dealer and once to an auto repair franchise and both times there was pain involved.  MaxCare imposed labor hour caps that neither wanted to accommodate.  But the auto repair franchise ate the difference – Mercedes did not.  It was a small amount so I paid it (it was the day I was selling Guenther and didn’t want the hassle).  There is no argument over labor rates when you turn your car in to CarMax.  But here’s the kicker.   If CarMax can’t fix your car, and often with these high-end European cars they can’t, they will take it to a dealer.  When they do, the entire transaction is between CarMax, MaxCare, and the dealer, and if there’s friction over rates you’ll never know about it!  No, I was never really comfortable with CarMax fixing my German techno-car, but I crossed my fingers and hoped they’d either get it right or send it out to the professionals.  I got a little of both.

The warranty is transferable, which makes resale easier and less costly. You didn’t want to own one of these unicorns without a warranty so why would your buyer when you’re done?  I went into my purchase planning to sell the car when there was at least 10,000 miles and a year left on the warranty.  I wasn’t sure how this would all work out or if it was worth it.  Turns out it was.  I sold my 2004 S55 at the 90,000 mile / 13 years old mark with 10,000 miles and two years left on the warranty, and the buyer, a real good car guy, told me he was willing to pay a little more than fair market value because of the warranty.  I will also tell you had I bought the 125,000 mile warranty instead of the 100,000 mile one, I’d still own the car.

Full disclosure on CarMax repairing my car. I was not always thrilled with the quality or timeliness of the repairs.  The self-closing trunk mechanism took eight visits to get right.  When the car didn’t lock properly CarMax sent me to a Mercedes dealer to buy two new fobs and reimbursed me the $900 for purchase.  But it was not the fobs.  So when I took the car in again for further examination and a fix of a central control unit, CarMax inexplicably broke both of my brand new keys!  So they paid another $900 to replace them.  I once picked up my car for a repair I can’t remember, went to the gas station, and noticed a brand new tire was gouged almost to the core.  I immediately returned and they apologized, mumbled about some touch up paint (never asked more about that) and a minor incident, and replaced the tire.  Sometimes CarMax kept my car for weeks and weeks awaiting parts or MaxCare claims adjuster authorization to repair and I didn’t care – I was driving a nice loaner car and not putting miles on Guenther.  But the worst was when CarMax did a whole bunch of warranty repairs, and while they were at it, I let them replace the rear tires because they gave me a fair price.  The next day my wife drove my car, one of only three times in three years she drove Guenther, and a WHEEL FELL OFF!   Two lug nuts vanished, three were on by a thread, and while the mechanic felt horrible, there’s really no excuse for that.  I’m just glad it happened to her and not me – she drives reasonably – I drive like a bat out of hell and it would have been far worse for me.   You can get the whole Guenther saga on that page.

Last thoughts on warranty. The wheel falling off incident had me rethinking letting CarMax work on my car.  But I am still all in on the MaxCare warranty because without it, I’d be driving a Camry.  I am considering going with the $50 deductible again, going to a dealer with my next car, eating the $50 per visit, and slugging it out over labor rates if and when I need to.  But I am also considering giving CarMax another shot at maintain a European car.  What are the odds another wheel will fall off? Stay tuned. (Update in 2021 – I still use CarMax first, but just had my S600 serviced at an independent Mercedes specialist who noticed oil leaking from the turbos.  He navigated MaxCare and repaired the car with no hassle to me.  I did have to pay the $50 but since the service was over $1,000 i just took it.

Okay the real last thoughts on the warranty. When Guenther was in the shop last year I wandered around the show room and eventually found myself talking to the sales manager about my next purchase.  He knew about Guenther (everyone at CarMax Dulles knows about Guenther) and he was pleased when I said the way CarMax stood behind that car and took care of $35,000 in warranty repairs without any resistance and I made a believer out of me.  I told him I would be back for my next car and he chuckled, “But I suspect you’ll buy something a little more reliable next time?”  I said no way – I’m buying your biggest money loser, like a Jaguar or Porsche, because I know I’ll make my money on the warranty.   He looked at me like I was deranged.  Perhaps I am?