Most people are familiar with extended service plans for automobiles, also known as extended warranties.1 Fewer realize that they are also available for motorcycles. As all vehicle technology becomes more sophisticated and the purchase price of motorcycles and cars increases, however, many people find themselves wanting more protection than a traditional warranty offers.
According to the statistics available for automobiles, 23.5% of people who bought a new car bought extended warranty plans back in 2009. By 2019, that figure had risen to 34.4%. (source: NADA)
The conversation around extended service plans is primarily focused on automobiles, but the main points can also be applied to motorcycle ESPs. The two products are based on the same principles and offer most of the same benefits.
The biggest difference when considering additional motorcycle coverage is that, for most riders, their bike isn’t their primary means of transportation. They won’t be putting as many miles on it as they would their car.
The anti-service contract position
Industry advisors who recommend against extended warranties generally don’t recommend them for any product, including appliances, technology, or vehicles. And they can be especially disapproving of vehicle service contracts.
Dave Ramsey calls them a “horrible set of mathematics”. The logic goes like this: the average vehicle service contract costs $1,500, the average repair is $180. If you can’t afford a $200 repair bill, you shouldn’t be buying the car. We’ll look deeper into this train of thought in a minute.
While other experts are more willing to look at the pros and cons, the general consensus among the anti-service contract crowd is that most of us don’t need to buy extended service plans because most of us who buy them don’t ever use them.
The reality about motorcycle repairs
In the past, it was much easier to learn how to maintain your motorcycle yourself. In fact, that strategy is still often recommended today. “Buy a toolset, some torque wrenches, and watch YouTube,” they say. With older, more basic bikes they may be right. With newer bikes, you will have to learn how to work on sophisticated, high-tech electrical components. You may also have to have to learn how to work with titanium, carbon fiber, or aluminum which often requires specialized training.
If you want to know how bikers really feel about their extended service plans, visit the forums. You’ll hear from the “don’t buy” people, but you’ll also hear about the many times purchasing additional coverage was a wise decision.
According to one member, “Having worked at a dealership, I can say that when someone used it, they were sure glad they had it. Now, people who tried to file a claim on a wear item sometimes got miffed, or those who thought it also covered maintenance also got upset, but overall, it is a good thing.”
Another had this to say, “Near the end of the factory two-year warranty, I purchased the extended warranty for almost $1,600. It has already paid for itself with a transmission rebuild at $1,400 and a new right rear shock at $200. I did have to pay a $50 deductible for each, but now I still have two years of coverage left.”
The reasons bikers say an extended service plan makes sense is when you:
- Are not mechanically inclined
- Own a motorcycle with a reputation for needing “serious repairs”
- Have made or intend to make changes to the motorcycle that will void the warranty
- Own a used bike
- Own a motorcycle with high mileage
- Put more than 8,000 miles per year on your bike
- Plan to keep your bike five years or more
Making a case for extended service plans
Let’s take another look at the mathematics of vehicle service contracts, a category that includes the extended service plans offered by Discount ESP for motorcycles.
In the example above, we’re being asked to make a decision based on the averages. But averages can be misleading. They don’t show the spread of results. They don’t take into account extreme results which can pull the average up or down. This is especially important to know when evaluating the likelihood and cost of motorcycle repairs because there is so much variability based on mileage, cost, and conditions.
There are many circumstances where the cost of motorcycle repairs can quickly exceed the amount of money you’d have saved by not buying the ESP, especially when it comes to the transmission, engine, or electrical systems. “It’s basically a question of risk and severity: even a low-risk event may be worth insuring against if the cost of the event is too high to bear.”
Another reason often given for not purchasing a service plan is that they make money for the dealer. But everything you buy makes money for someone, otherwise, it wouldn’t be available for you to buy. The right question is whether the amount of money you spend provides you with the benefits you need at a price you’re willing to pay.
The good news is that you can look at your individual circumstances and make an informed decision about your level of risk. If you’re buying a new Honda, you may not need an extended service plan right away or ever. But if you really want a Harley that you’ll be upgrading and riding 20,000 miles a year, purchasing an extended service plan makes financial sense and is worth the cost.
In all likelihood, this is where you’re going to part ways with the “experts”. The cost of repairs shouldn’t be a barrier to owning the motorcycle you want to own. And it doesn’t need to be. We’ve made sure of that.
1 Sometimes they’re referred to as extended warranties which are actually vehicle service contracts because they cost extra and are sold separately.