My boyfriend and I each just bought new Toyota vehicles about 4 weeks ago (actually his is about 6 months old/used). We both purchased the extended warranty for about the same price $1,040. He got his for 7/100,000 and mine is for 6/100,000 (not sure why he has more time). We want to know if the extended warranty is really worth purchasing especially for a Toyota. Many people say they never break down but I was considering all the electrical equipment installed nowadays. Did we get a good deal, should we look elsewhere for a better one or just cancel the warranty?
If you can, cancel the warranties and get your money back. An extended warranty is nothing more than additional dealer profit, and usually doesn’t cover anything that is actually likely to fail within the warranty period.
Most posters will tell you that an extended warranty on a Toyota is probably a waste of money since they are quite reliable and the things covered are usually those that do not break during the period covered.
For most products, the actual payout, the money collected vs paid to the firm is about 10%; very poor odds.
I bought a Toyota new in 2007 and turned down the extended warranty, mostly because of the car’s reputation, and I don’t drive enough (14,000 miles so far) to make it pay.
‘Extended warranty’ on anything ( washer/drier, tv, car ) is just a savings account gamble. If you give THEM your money, you don’t get to keep it if the gamble doesn’t play out ( you lose ). If it breaks down and costs more than the savings, you win.( same as most ‘insurance’.) Assess your risk -vs- cost ( it is a Toyota ) and start your own repair savings, which you may have already as a ‘rainy day’ or ‘home repair’ fund.
Extended warrantees cover things during the time frame when they’re the very least likely to break, and at a very high price. If anything is defective it’ll break down before the manufacturer’s warraty runs out, and normal wear irems will wear out after the extended warranty runs out. I’m not makin’ this up, it’s actual statistics.
If you can get the money back, do so. Then “self insure”…put the money in a seperate account of your own and call it “my extended warranty accout”. Then if something does break you’ll have the money to cover the cost, and if not you’ll still have the money. Why give it to them?
It really depends on what your warranty covers. Is it a extension of the Toyota bumper to bumper warranty?. Were you given the option of canceling? please describe the details of canceling. Have you really read your extended warranty? read it and post back any issues that are disturbing. Look for discriptions of how diagnostic time will be paid,who pays if your engine must be disassembled to make a diagnosis,who pays and how much for electrical diagnosis,what exactly is covered,are parts covered because they fail due to wear? and read any rental car policies. You should have done this before you paid.
If you go to the Dealer and ask these questions get everything they assure you of in writing.
If you got a 3yr 50K extension of the factory warranty for #1000.00 you did well,but I doubt you got that.
Are These Toyota Warranties Or Something From Another Company The Dealers Sell?
Are your documents for the warranties printed specifically by the Toyota Corporation? There are lots of other companies out there. Who underwrites the ones you bought?
Have you read the specifics of the coverage, understanding what is included and excluded? Do the policies have any deductibles and if so how much?
How long does the warranty given with each Toyota at purchase run, in years and miles, before the extended ones kick in?
Your responses please. This will help us help you.
CSA
Well any car can have major expensive repairs.
The profit to the salesman and company is usually over 50%. So for every $1,000 you spend the insurance company has less than $500 to pay for repairs or they will loose money, something insurance companies do not do. Some people will get nothing back and some will get a lot more than they pay. Most will get far less. In addition you need to keep in mind that the insurer has worded it to eliminate as many expensive things as they can.
Remember that the seller is out to make money and they get to write the rules and set the price. They are not going to sell them at a loss so one way or another they are going to have you pay more than they will pay out.
Would you gamble with a car dealer who gets to set all the rules and knows all the odds?
Your decision has to do with the value of the piece of mind it gives you. If that is worth the cost then buy it. Don't expect it to cover everything however, most are written to keep cost down and exempt what they know will cost them money.
Good Luck
As long as you have enough money to use as a toy it won’t hurt to just throw it around. If you financed the warranty, it will cost you a lot more than the $1,040. A warranty won’t do any good in a crash or if you sell the car at the mileage of the original warranty.
Some people can handle long range planning; a warranty could be something that causes better planning. In that respect, it could be a good thing.
You might want to upgrade your insurance, what with so many explosives in a car these days, there could be a fire if the car hits anything. The airbag and the seatbelt pretensioners have explosive charges.
I just got a notice for a recall on my Yaris because the sound insulation in the door pillars could ignite. 2006-2007. Kind of makes a warranty seem trivial. They don’t actually say explosive, it sounds like this “the gas generated may affect the sound insulators. In the worst case, if the sound insulators ignite, this condition will result in a post-collision fire.” Your car, if new, is a little safer than mine.
As a general rule, Toyotas need extended warranties like boats need a spare tire.
Are you using it commercially and towing or plowing or taxi cab service or wave hopping in salt water…on your Camry. Dealers of many vehicles if they are run well, have a “slush” fund to keep good customers happy and will cover repairs that cars might have for periods after warranty runs out. BTW, in Toys/Hondas, electrical are the more reliable parts compared to European/American cars.
Two often overlooked issues with extended warrantees are that you are limited in who you can use for service work and you have to work to convince them that something is actually broken.
For what you paid, it’s cheap insurance. It’s good for piece of mind, and is just income protection. The reason he got 7 yrs on his is that his was used, and the 7 years started at in service date, so it’ll go back 6 months or so. That’s probably why 7 and not 6. The reality is that’s a long time to not have a mechanical, electrical or computer component not go out, and if you keep the car the whold time, you’ll probably make money on it.
Agree with mountainbike; the normal warranties cover “infant mortalities”, these are the result of assembly errors or faulty parts. They will nearly always show up in the first year; in repair work mistakes will show up within 90 days, the normal repair warranty.
In electronics, the first year covers “burn-in” defects; after that the item will go a long time before it wears out! So use your stereo or TV a lot in the first year!
In cars, they also cover design or manufacturing defects that would take longer to show up, such as poor heat treatment, poor quality material selection, or poor engineering.
Under normal driving any defects in a normal car will show up before these factory warranties expire. The time covered by the Extended warranty does not go far enough to cover the WEAR OUT of the item. On a Toyota or Honda, that would be 300,000 miles or so. So the extended warranty covers the time least likely to experience problems. And there are many exclusions, such as brake jobs, considered an normal wear item.
The very long warranties offered by Hyundai and Kia are a statement on their part that they stand behind their cars and the customer need not fear. Chrysler went to the 5 year, 50,000 mile warranty after the disastrous cars it produce between 1955 and 1962. If the vehicles are any good, these long warranties cost the maker very little.
If you are buying a car with new technology or a car from company known to have products that develop early and expensive problems, an extended warranty may well be worthwhile, if you insisted on buying such a car.
I would put Jaguar, Audi,Volvo, Mercedes, and a few others in that category. Since extended warranties are a numbers game, the extended warranty for a Lexus (unnecessary) will cost about the same as for an Audi or Mercedes (more recommended). In other words, the Lexus, Toyota, and Honda/Acura policies are paying for the breakdowns of the owners of the less reliable cars.
The reality is that’s a long time to not have a mechanical, electrical or computer component not go out, and if you keep the car the whold time, you’ll probably make money on it.
Do you really think the insurance company is going to sell you insurance for less that they are going to pay out, on the average? Do you think they dealer and or salesman is not getting a chunk of that money as well? If the extended warranty was included in a financed price, then you can add that cost to the cost of the insurance as well.