Extended Warranty for Toyota Sienna (used car)

We are buying a used 2004 Toyota Sienna Limited (AWD). It has 69K miles on it, so the warranty has expired. It had only one owner, and has been inspected - would it be worth it to buy an extended service plan? We don’t plan to put on too many miles (relatively speaking), but the car has a lot of bells and whistles that could possibly malfuntion.

would it be worth it to buy an extended service plan?

 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 peop;le 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

If your buying the warranty to cover youself if a “bell or whistle” fails you could be suprised when a claim is presented to repair one of these systems.

Make sure the policy covers these systems (really read the policy good) and make sure the policy provides diagnostic time for these systems.

I have seen policies cover the type of systems people call “bells and whistles” it is not impossible to find one.

NO! Extended warranties are mostly profit for the seller (which is why they push them so hard) and they generally provide minimal protection for the buyer.

Put your money in the bank instead. If you need it, it will be there. If you don’t need it (most likely), it will still be there.

The money you would spend for an extended warranty can go one of two places; your bank account or the dealer’s bank account. Which do you think is better?

I’m a former car salesperson. I used to sell extended warranties. I can tell you, without hesitation, that you neither need nor want an extended warranty.

Define what you mean by “worth it”. If you mean that you expect the average payout to be more than your cost, then realize that every warranty company would quickly be out of business under that model, so that’s not going to happen.

Also, if there really are lots of failure-prone bells and whistles that are expensive to fix, don’t you think the warranty company knows that too when they set their cost?

If you decide that you MUST have an extended warranty and that you can afford one, keep in mind that most are third party. I recently was offered an extended warranty by a dealership which claimed that it was an “in house” extended warranty, that the dealership itself originated controlled and acted upon the warranty. If you must get one avoid all others except for an “in house” one.

But in this scenario the customer will be out of luck if the dealership goes out of business. With the current state of the economy I expect many dealerships to fold, especially as some of the car models are eliminated (Pontiac, Saturn, etc.).

If you read the fine print you will find that all those “bells and whistles” are probably not covered. As others point out this is VERY EXPENSIVE INSURANCE, and you will be lucky on average to collect 10 cents on every dollar you pay out.

I turned down Toyota’s extended warranty when I bought a new one in 2007. Although Toyota’s terms are OK and they will be in business, unlike many private insurers, the warranty covers things that typically do not break.

I kept track of all the extended warranties I was offered over the years on appliances, etc, and found that I had $110 in actual repairs that would have been covered on the 11 items bought, but the “warranties” for those 11 items would have cost me $1150!!! I hope this convinces you that extended warranties are great for those that SELL them and the companies that issue them!

Put the amount of the warranty cost in the bank and it MIGHT be needed for some future repair.

And if you take the money you would have spent for the extended warranty and put it in the bank you’ll have it if any of those “bells and whistles” break. Even if it’s one that would not have been covered by the extended warranty.