My husband and I just bought a 2006 Toyota Highlander with 27,000 miles on it. Should we get an extended warranty? Is it worth the $?
No, and no.
Toyotas are among the most reliable vehicles on the planet. Extended warranties are, in most cases, worthless, because they don’t really cover anything likely to break. This is even more true in this case.
I recommend you put the money you would have spent on the extended warranty into a bank account or short term CD instead. If, by some remote chance, your Highlander needs major work, you will have the money to pay for it. But that’s unlikely.
Isn’t that why you bought a Toyota?
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.
I take it the salesman is trying to push one on you? If so, look them in the eye and tell them you don’t want an unreliable vehicle like this and tell them you don’t want it if it needs an extended warranty like this.
It an expensive insurance policy. The likely case is you’ll never use it and the likely case is you won’t collect the price paid.
However some people it gives a better feeling of comfort and only the individual can put a price on that.
In these uncertain times, you can’t count on the warranty company to stay in business. In any situation, you don’t know if you will get paid for the repairs. Be your own warranty company. If you extended the warranty on everything you owned, you would be broke or you would be losing money.