extended warrenty and premium service

I have an '05 prius with 31,000 miles. I am going to purchase the extened warrantee through priuschat.com for under $1,000. I think you can wait until up to 36K or 3 years to purchase it so you do not have to decide now.

 

The extended warranty not only "extends the warranty", but it also gives you some options that aren't available otherwise. Towing, lodging reimbursement, food reimbursement, etc. It is good to get from the start. It from the "adoption date" of the new car...so whether you get it on day 1...or day "3 years later", it still expires on the same day.

 

and they don't need to have my money any longer than necessary, which is why i'm waiting till year 3

definitely a good idea to purchase the extended warranty though. service plan, not really worth it IMO. most of the maintenance is tire rotation and oil change- a couple big numbers at major intervals. find out your dealer of choice's prices for each interval (they usually have a service menu available to take home with you), add up what you would pay, then compare to the price of the service plan.

 

An extended warranty is prepaid service. You're betting that the car will cost more in repairs over three years than what you're paying upfront for the repairs. This is big business for Toyota and for all other car makers, because they know that the repairs over that period of time will cost less that what you're paying.

 

Bolds Added

Not quite.

They are betting that the total repairs for all people buying the policy will be less than the total money paid by all the policyholders plus the interest/income they earn on that money in the meantime.

It's the same for any pool insurance, it's a gamble, and they price it based on their calculation of the odds for the group. It doesn't say nearly as much about your odds as an individual.

For example, there may be problems that appear only in very hot or very cold climates. They may lose money on those people but make it up on the Californians

Insurance is just like book-making except they have actuaries setting the odds instead of bookies, oh, yeah, and it's legal

That's why good actuaries can make a whole lot of money. An uncle of mine who ran an insurance company tried like hell to get me to come be an actuary for him. If I had, I'd certainly be retired by now.

Further, they recognize that on some models, or model years that may have specific unforseen problem, they will lose money. So, in the long run they are betting that they will make money on all the policies sold on all cars.

I'm also willing to bet that Toyota has no clue right now whether they're going to win or lose on the Prius warrantees, and I bet they really dont' care. The Prius warrantee doesn't cost much if any more than for their other cars, and the risk is certainly much greater, but it's more important to them to have happy Prius customers in the short run.

 

don't forget that it cost them much less to fix something as opposed to you paying for it.

 

I got my extended warranty in the hopes I never use it. I've used extended warranties in the past for used cars, one in particular I was really glad I bought it. With the Prius and it's expensive components I thought it was a good gamble.

 

The advantage for buying it near the end of the 36 month warranty is you don't loose depreciation from the warranty if you later sell the car.

Eg. Pay $1000 in first month, sell in 37 months, you will probably be lucky to get $500 back, the way they calculate the policy depreciation. Buy it in month 35 for the same price, sell at month 37, likely get more than $900 back.

Becomes insignificant the longer you keep the car, and of course equals out at the end of the 7 years.

 

Yeah, actually I just got an 06 Prius last week. I turned down both the extended warrenty and Premium service offers because I didn't trust the salesmen there.

Shoudl I get them? Are they worth it? What should I pay for them? Thanks! -- John.

 

I would say don't pay more than what was posted here in another thread. As for me, i think it's totally worth it. My previous car had the extended warreny run out last March. Up to that point, the warrenty had covered over $2500 worth of repair bills, when it only cost me 900 to begin with!

 

oh, sorry... it was on a pontiac.

 

And I have up intil 36,000 miles, correct? -- John.

 

<div class='quotetop'>QUOTE(rwd2177 @ Feb 25 2006, 01:18 AM) [snapback]216320[/snapback]</div>

I just recieved my Paitinum extended Toyota warrenty in todays mail. I bought it from Greenfield Toyota located in Maine, to cover my 2004 pkg 4 thats about to turn 36,000 miles. Price was $590.00. Around here, Fort Worth Texas, they were quoting me 12-1,400.00. There phone number is: 413-772-0231. I'm not associated with them so this isn't a sales pitch. Happy hunting

 

<div class='quotetop'>QUOTE(Danny @ Mar 9 2006, 10:05 AM) [snapback]222662[/snapback]</div>

Does this $990 extended warranty include the money back option if the warranty is not used during its term?

 

I decided on extended warrenty because of the high tech nature of the vehicle, and distance for a dealership (with a generous towing coverage). I was offered the warrenty at purchase for nearly 2 grand. When I went back and told them that I could get it for less than $1,000 from the internet, the guy said, we would like to keep your business here and wrote the policy for $990 (I did not say where the internet price was...),.. This was the 7 year, 100k miles/

there are options for the extended of different number of years and mileages, and you should match your annual miles and to match the expiration of the warrenty (less time, less $$)

Jim