Not Is. Rather, Was at one specific time in the past. I must call Foul on this "1 in 40,000" figure, due to its age [May 2008] and the miniscule fraction of the GenII Prius population that was out of warranty at that time. Even now, most GenII Priuses are still in warranty. But the fraction that is beyond warranty, and thus potentially had to pay for a new battery, is vastly larger now than in spring 2008. I would be astounded if today's equivalent figure is even within a full decimal place of that claimed one. It seems that the number of PC posters who have brought their tales of battery woe here, alone, should disprove it. I budgeted for a new battery somewhere between 100k and 200k miles, but the failure rate does appear to be low enough that I'll have a very good chance of not having to spend that money before replacing the car.
Well, gen 2 Prius HV battery pack is more reliable so I only see that number go down. I do agree that we need to look out for the actual recent figures.
While I tend to agree with your idea of not needing the warranty, some people do need it for peace of mind. False though it may be (many failures are refused under warranty). I just said "NO"!
I have two favored responses towards warranty offers: either I shake my head no before they utter a word, just after they open their mouth to start talking; or if they get the sentence out I just offer a sardonic smile as an answer. Most salespeople get the hint and do not press. I want to point out that if the eventual long-term failure rate of the HV battery reaches 1%, the spread-out risk for the Prius buying population is about $10. How amazing is that !?
The life of a Prius Hybrid Battery is more a factor of age than miles. I have a 2001 Prius with 218000 miles. The original battery failed in January 2009 at 192000 miles. My sister-in-law has an identical car and her Hybrid Battery failed in September 2009 with 127,000 miles. Replacement of batteries for each car cost us about $2300.
MY 2000 Insight 5 spd went 180,000 miles on the first battery , then Honda replaced it for free. You can't beat that ! Plus it needed no wheel alignments, no shocks, no bearings - nothing but an exhaust system in 262,000 miles and 1 EGR valve.