Should I cancel the warranty (beating a dead horse)

#1

I know this has been hashed out over and over, and I know it is like beating a dead horse. But this is my dead horse, so here is the question:

I just bought a 2002 Toyota Tacoma w 43K miles. I was also sold a “Gold Vehicle Service Agreement” for $1130 (which I financed so will end up being $1440 or so). It “covers” me for 5 years or 60K miles, so until 2016 or until 103K.

Should I:

A) cancel the “service agreement”, it is a rip off - chalk the $25 cancellation fee to a lesson learned and put the rest in the “repair fund” or;

B) Keep the agreement - $1440 over the next 60K is a guarantee!

Some more info -

I am not at all mechanically inclined, so DIY repairs are out. I am good at bringing my vehicles in for routine maintenance. I may not own this truck for the 5 years or 60K (though the service agreement is transferable, for what its worth).

Any and all assistance is greatly appreciated. This kind of stuff keeps me up at night.

#2

Is that agreement for UP TO 60k miles or an ADDITIONAL 60k miles.

I’ll bet it’s UP TO 60k miles…which means $1130 for a 17k mile warranty…

I’d cancel.

#3

Cancel it and chalk the $25 fee up to the cost of a lesson learned. The chancess of ever getting your money back in savings are extremely low. The chances of having wasted the money are extremely high.

#4

You’re talking about a nine year old car. Does the warranty help you sleep at night? If you have to get a new air conditioner compressor, it will have almost paid for itself. If you feel like it’s a rip-off, it isn’t helping you sleep at night. In fact, it’s probably keeping you from sleeping.

#5

Is That “Gold Vehicle Service Agreement” for $1130 Issued As An Extended Warranty By Toyota Itself Or An Aftermarket Company ? I Would Buy Only From The Manufacturer Or I’d Cancel.

Do you have a good understanding of what is covered or rather what is not covered. That’s the important part. I can’t speak for this particular company because I don’t know it, but (many ? most ? ) are very carefully crafted so that anything that is expensive is not covered. The brochures list all kinds of things it covers, but they’re things that never get repaired or replaced.

"I am not at all mechanically inclined . . . " makes you an easy target for an expensive aftermarket policy and I’ll bet you’ll admit that you can’t look at the printed information and tell if it covers what you’ll need. Perfect.

Also, does it cover diagnostics (You’ll be charged an hour or half-hour labor for this almost every time a problem arises) and is there a deductible ? Will it cost you $100 or $200 every time your car goes in with a minor complaint ?

Do you have a trusted mechanic or somebody who can take a look at what you bought and offer an opinion ? Do I need to say not to trust the salesperson ?

CSA

#6

From Toyota Financial Services extended warranty brochure. This causes me concern that they sold you a Gold warranty that is invalid the day it was purchased:

Eligibility
Plan is available through your Toyota dealer only at the time of Toyota Certified Used Vehicle purchase or lease.
Coverage
Effective until 7 years after vehicle’s date of first use as a new vehicle or 100,000 total vehicle miles, whichever occurs first. This is the same time and mileage period covered by the TCUV Limited Powertrain Warranty.

The 7 year limit (based on first use as a new vehicle) ended in approx 2009.

#7

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

#8

Thanks all for your quick responses.
To answer some questions,
Whitey: It doesn’t help me sleep at night. Quite the opposite.

MikeinNH: It covers me up to 103+K miles.

CSA: It is Toyota, not an aftermarket who writes the policy.
It is true, I can’t tell by looking at the list if it covers what I need (But I am good at other stuff).
It does NOT cover diagnostics and has a $50 deductible.

Jayhawk: It covers me to 2016 or 103+K miles (so 5 years or 60K from 7/15). Thank you for pointing it out, I double checked.

Mr. Meehan: I think your analogy is a good one. People win big in Vegas, but most lose. I am not much of a gambler.

I have plenty of room on a credit card for emergencies, so the only way this thing is worth it is if I do more than $1440 in repairs, plus deductibles… starting to think I should cancel…

#9

Now you’re talkin’!

Sincere best.

#10

I think repairs on an '02 Tacoma between now and 103K miles is quite likely. Read the fine print to see what kinds of exclusions are in the contract that might cause a claim rejection. It wouldn’t take much to rack up $1,400 in repairs. A power window could fail, radiator, alternator, steering rack. etc. Since you have it and it is a Toyota policy I’d consider keeping it, it all depends on the details in the contract.

#11

Having owned two Toyota pickups, one for almost 11year and the other for 17 years and over 300,000 miles, I’d consider the likelihood of using that warranty extemely low. My first rotted out (the frame), and my second didn’t have anything even minor go wrong until 200,000 miles, and when it got retired (my daughter got hit in it at 338,000 miles) it still had the original unexcised engine and drivetrain. Repairs had included things like a new radiator, a new starter, a new water pump, new shocks, and a new exhaust system. I did put a new timing chain in at 200,000 miles, but that was the most major repair it ever had.

And I worked the crap out of both trucks.

#12

Well if what you say is absolutely true and verifiable, that it covers to 103K and is written and backed by Toyota and not that guy in St. Louis, it may protect you from a major repair. Insurance is insurance and you should not expect to get your money out of it anymore than you would out of an auto policy or home owners policy. But IF you have a major problem like a trans or engine or computer, you’re protected. Doesn’t take long to spend a couple thousand on major or electronic work.