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deals of the week

2014 Kia Optima Hybrid

Most new-car buyers face this question: "Shall I sign you up for an extended warranty?"

The answer should be "no," says Consumer Reports, suggesting that a buyer will rarely realize an equal-or-better return on a contract that costs $2,000 or more in most cases.

But there are exceptions. Diane Jang bought an extended service plan on her 2013 Porsche Boxster and was glad she did when her slick, red drop-top incurred some pricey parking lot damage that was, indeed, covered under her extended service plan. The repairs were worth several thousand more than the cost of the factory plan.

Still, CR and others argue that extended warranties are usually a waste of money.

"Looking for an easy way to save hundreds on your next new car and simplify the buying process at the same time? Skip the extended warranty," says CR in its April edition, citing extended warranties as "an expensive gamble" that has made many buyers quite unhappy.

"It was a horrific experience. I feel like the dealer ripped me off," said one of those buyers. "I feel like I probably paid too much for peace of mind," said another.

CR's long-standing advice: instead of an extended warranty or service contract, set aside the value of the contract in an interest-bearing account. The money will be there if needed, but if not, you'll get your money back with interest.

Here is a sobering thought, Diane Jang notwithstanding: in a survey of more than 12,000 readers, 55 per cent of respondents said they never used their extended service contract during the life of the contract. The 45 per cent who said they used the contract for repairs, had work done valued at less the value of the contract.

Still, the CR research found that BMW, Mercedes-Benz, Chrysler and Dodge owners used extended service contracts more than those of other brands – not surprising, given that all four brands ranked below average for reliability in CR research.

Something to ponder, given that Mercedes-Benz Canada has slapped a $5,000 factory incentive on the luxurious CLS550 4Matic. If you like this Merc or any other, you are likely to be offered an extended service contract before you sign the deal.

Speaking of which, insiders suggest that all of Canada manufacturers and their dealers remain very active deal-makers. Hyundai, for instance, is on a mission to clear out remaining 2013 stock, with added incentives on 2013 Veloster, Elantra, and Genesis Coupe, reports Unhaggle.com – and a total of $4,500 in stackable incentives on the 2013 Santa Fe XL. Nissan has sweetened the deals on the Versa and Sentra, too – as has Volkswagen on the Tiguan.

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Deals of the Week consulted with www.unhaggle.com, Car Help Canada, www.carcostcanada.com, and other sources on these offers. As usual, pricing information here is subject to change and dealer discounts vary, so consult your dealer for all the final details, including expiry dates for all offers.

2014 Mercedes-Benz CLS550 4MATIC

  • MSRP: $85,000
  • Freight, dealer prep, air conditioning tax: $2,130
  • Dealer discount (estimated): $4,100
  • Factory discount: $5,000 (manufacturer incentive)
  • Taxable subtotal: $78,030
  • Total price with 13% HST: $88,173.90
  • 1.9% financing for 48 or 60 months available with manufacturer incentive

2014 Nisan Sentra Nissan Nissan  

2014 Nissan Sentra 4 door Sedan CVT SV

  • MSRP: $19,198
  • Freight, dealer prep and air conditioning tax: $1,702
  • Dealer discount (estimated): $300
  • Factory discount: $2,500 (manufacturer incentive)
  • Taxable subtotal: $18,100
  • Total price with 13% HST: $20,453
  • $1,000 factory incentive available with 1.79% financing for 48 months

2014 Kia Optima Hybrid Kia Kia  

2014 Kia Optima Hybrid 4 door Sedan EX

  • MSRP: $33,695
  • Freight, dealer prep, AC tax: $1,620
  • Dealer discount (estimated): $1,100
  • Factory discount: $2,500 (manufacturer incentive)
  • Discount: $1,000 (Eco-Credit)
  • Taxable subtotal: $30,715
  • Total price with 13% HST: $34,707.95
  • $1,000 Eco-Credit available with 0.90% financing for 48 or 60 months

2014 Lincoln MKZ Ford Ford  

2014 Lincoln MKZ AWD

  • MSRP: $42,855
  • Freight, PDI, AC tax: $1,850
  • Dealer discount (estimated): $1,100
  • Factory discount: $500 (Lincoln Delivery Allowance factory-to-dealer rebate)
  • Taxable subtotal: $43,105
  • Total price with 13% HST: $48,708.65
  • Factory discount: $500 (Lincoln Auto Show Bonus factory-to-customer rebate)
  • Factory discount: $1,000 (Lincoln Costco Bonus factory-to-customer rebate)
  • Final price: $47,208.65
  • Factory incentives available with 0.0% financing for 36-72 months. Lincoln is also offering a 24-month/40,000 no-charge maintenance program that includes select wear items such as brake pads, rotors and linings.

Pricing information source: unhaggle.com and carcostcanada.com. Calculations based on Ontario customers. Please note that while the information above is accurate at the time of publication, incentives are given at the discretion of individual dealers, and may be changed or discontinued at any time. Where noted, "dealer discounts" are negotiated with the customer on a case-by-case basis. Unhaggle Savings are actual discounts received by Unhaggle customers.

If you have questions about driving or car maintenance, please contact our experts at globedrive@globeandmail.com.

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