Extended Warranties or Not???

The Toyota Care Plus IIRC is not an extended warranty, but a pre-paid maintenance package. Your Prius comes with 2 years for free, so the $1,496 only really covers 3 years of maintenance (years 3-5). This comes out to $498 a year, for what's essentially 2 tires rotations, and 1 oil change a year (plus an air filter change at the 30K mark).

IMHO the Toyota Care Plus is nice for the convince factor, but at that price (which is it's full price), it's a ripoff. Again, IMHO, anything more than $600 is too much.... but, the cheapest I've seen has been $890... I'd cancel this if I were you. You're better off paying out of pocket.

The warranty is a little trickier. I'm a firm believer on skipping such warranties, but I'm also mechanically inclined and have changed clutches, alternators, axle shafts, control arms, and a gob of other stuff myself. Not only do I have the tools and experience, I have other vehicles I could drive if it took me a week or two to fix something. Not everybody is in the same position I'm in.

Additionally, extended warranties are worth passing on because statistically you will not have $1,891 worth of repairs over it's term (otherwise they couldn't afford to offer it at that price)... however that statistic is over the pool of many Prii, your experience many deviate significantly.

So, if you can afford the repairs out of pocket (e.g. have a good emergency fund), and/or you're capable/willing to DIY, I'd skip it.

 

Lots of opinions on Toyota Care Plus here:
Toyota Care Plus worth it? | PriusChat

 

When you buy the warranty/insurance you have paid:
- the cost of any future repairs that the contract language covers (estimated by two independent sources to be, on average, about 30% of the total you pay)
- the insurance company's expenses and profit
- the sales bonus for the person who is in the dealer's facility selling the up-sale
- the salesman's bonus
- the sales manager's bonus
- the dealers profit's
- the administrative costs of coordinating all these entities

You are forgoing the interest you could have earned on the money you are paying them.

You are assuming that the insurance company will be in business when you want to collect.

You are assuming that the service you need will be covered by the contract language which is written by their lawyers and not reviewed, I'll bet, by you or your lawyer. It isn't the marketing brochure that matters, it is the contract language as interpreted by the judges in your state.

You are assuming that when you need the service, you are in a location where a mechanic that accepts this warranty/insurance is convenient. Because of the hassle in dealing with many insurance companies and sometimes the low hourly rates they pay out, many mechanics won't agree to service a car covered by one.

You are assuming the car doesn't get totaled too.

You are assuming that you are paying the best price for that warranty. The same warranty may be available online.

And you understand that the warranty/insurance includes the time when your new car is under full manufacturer's warranty.

Like a casino, some will really benefit, a few break even, most will lose.

I bought a used car with the option of the seller getting a ~$2k refund on the transferable extended warranty she already had and giving me the full reduction in price I paid for the car, I took the price reduction knowing if the motor blew, it would cost me ~$25k. When I sold that car, I was way ahead for my decision. One sample, I know. I only cite it to show I practice what I post.

On neither of my Toyotas ('11 Avalon, '12 Prius v) did I take the extended warranty/insurance. Since I am in a position to absorb any repair cost, I prefer to insure only for things I can't afford to pay for like health care costs, long term care insurance, house, auto accident liability, etc. I even carry a high collision deductible on my auto insurance.

Good luck in whatever you decide.

 

not.

 

Beware of dealer-level extended warranties. There are many horror-stories about these. If you wondered why salesmen are so aggressive about selling you the "extended warranty" its because that's where they make most of their profit in most cases. It's based on statistics and tricky language, so in most cases you should insistently decline.

In spite of this proviso, I have benefited from just such a warranty. The one time I opted to buy the two-year extended warranty on an HP laptop, it actually paid off. My keyboard went dead just shy of the extended warranty period, and I saved myself a hefty repair bill due to the fact that I was still covered.

However...
Such cases are the exception, not the rule. It's still almost always a good idea to decline such warranties. Statistically, different technologies have different failure-rate curves. Electronics have a failure rate that decreases arithmetically over time, whereas mechanical devices have a flatter curve, or the "bathtub curve." You can bet, each "extended warranty" is designed to beat the appropriate curve.

 

Explain.

Simply, if you have a couple thousand dollars in savings to cover the unexpected, dump the warranties.