Extended Warranty on New Gen III is BAD IDEA!

My '08 Highlander Hybrid had to have the electronic power steering link and some other stuff replaced under warranty (as did a lot of earlier Highlander Hybrids and the '07 Camry Hybrid, as I recall). List on the parts alone was over $1200. While I too have faith in Toyota, a little insurance never hurts either.

 

I had the same thought when I bought my Prius yesterday: why am I buying this new car if "everything" is going to break in a few years. I could tell the guy trying to sell it to me felt slimy doing it.

 

At some point, I will be buying the warranty. I had a 5 year on my current car. There were some minor repairs that I had done during the 5 year that were covered. Of course once I hit the 5 year mark the repairs got expensive, even for minor things. The car is almost 7 years old and I have paid almost 2k in repairs since the warranty expired. I am debating between getting the 7 year and the 8 year on the Prius. We can afford the piece of mind.

 

The Prius extended warranties offered by WarrentyShack are toyota warranties. That means they are backed by Toyota. Warrantyshack is a front for an F & I person at a toyota dealership.

 

You haven't presented any statistics.

I don't see any referenced numbers of any kind relevant to the Prius in terms of expected repairs, repair costs or warranty costs.

I can say that the earth is flat because no one has presented any statistics and with this line of reasoning I'd be right, until proven otherwise. Yes, extended warranties are often bad deals if you go into them blind. But rather than hand wave that they are good or bad, all that is needed is some real data so that people can make an informed choice based on relevant information. If you want to dig some up specific to our new 2010 Prius, that would be very helpful. It's not a personal attack. It's a request for information to support your hypothesis.

 

Plus it help supports PriusChat.
I took it to my local dealer it is the exact same warranty they sell for $450 more.

 

The thing to remember is that the Gen III Prius is a new car and new cars always have issues when first released. These issued will be fixed along the production line once they are discovered, but buyers of the new cars will be more or less guinea pigs. Toyota does build good cars but they are not perfect...

 

The number one reason I will not buy an extended warranty is the lack of integrity even of the big companies original warranties. Alone without the aid of the internet these companies screwed the lone customer time and time again. Now with the internet we can see their behavior to other customers denying the exact kind of claims that should be honored.

If your buying a reliable car, why by an unreliable warranty to go with it?

 

Here are the economics:

1) You're buying a Toyota Prius because it's dependable in the first place. NEVER buy an EW on any vehicle check rated by Consumer Reports, which the Prius has been.

2) Take the $2,000 and put it in YOUR pocket (ie. savings account, ok I know they aren't yielding much at the moment), not the dealer's coffers. There are HUGE markups (profit for the salesman/dealer) on EWs, so how can it be good for you as a consumer?? In fact, it might be the biggest or one of the biggest profit centers on a new car today.

3) Buying the EW at time of purchase DOES YOU NOTHING for 3 years or 36,000 miles (you already have factory warranty for that).

4) The chances of you needing a $2,000+ repair over the first 5-6 years or 72,000 miles of ownership are slim. If you don't, the warranty was a waste, wasn't it?

5) What if the EW company goes bust (and for this reason you NEVER even consider 3rd party warranties EVER)

6) These EWs are NOTORIOUS FOR DENYING REASONABLE CLAIMS. Do you want to fight these reprobates over mice type on the contract? Not me...

PLAY THE ODDS--the chances of you needing it are slim. If you happen to be unlucky, blame it on my proslethizing but don't kick yourself because it really would simply be bad luck, especially in the case of this vehicle and its track record.

I hope that helps. BE STRONG--do not give into sales tactics that have no basis in fact and do not make good economic sense. [/quote]

Just because your friend was naive or non-consumer savvy does not justify your one sided approach to "chatting." There are other things to consider whether or not the cost is justified including: age (yes more men enjoy fixing their own car), gender (its fun to crawl under the underbody at 40 but perhaps not 70), and what one "pays" - I paid $1,055 and your friend paid about double.

If you don't like extended warrantees, great, but

1) When quoting Consumer Reports or another publication, don't cherry pick the parts that support your opinion without including that CR did not recommend the Camry a year or two ago for "reliability." It is again in 09 but three other models are not. All Hondas are still recommended except the Element (new insight not rated yet). I have been reading CR for over 20 years and while I still subscribe, am less enamored. For instance, the RAV4 slightly beats out the CRV, which I have. A friend has the RAV4 and being priced about the same, it is inferior except for getting a couple of gallons more gas mileage. Interior appointments much cheaper looking, less well thought out and space inside, and as for the wheel still on the outside of the cargo door...

2) Play the odds? No thanks as I have had a car with 23,000 miles have the whole engine have to be taken out for an oil leak. It was under regular warranty, but if it had not been, the cost would have been over $3,000 (and no car for a week).

3) Be strong? I am ; single so take care of a 3200 sq foot house, yard, cat, two vehicles, and run my own consulting business. I am strong enough, thank you, without repairing my own autos.

4) EW are notorious for denying claims? Maybe non-OEM firms, but NEVER a manufacturer backed EW in over 20 years (have had Honda, Toyota, and even way back FORD and they paid whenever I said there was a problem). One of the Honda’s never had a claim so the dealer gave back all but $50 (which dealers still did that). Not sure why you are saying “third party” warranties when a Toyota EW is not TP.

5) Loose money if don’t have a repair? Disagree. While I have already participated in the other thread (where the style for the most part give and take/pros and cons vs. this one), suffice it to say that if I am fortunate enough to never use my 7 year warranty, purchased for $1,055 with zero ded., I still will get it all back when I sell the car privately (a few months before EW expires) vs. trading the car to a dealer (even taking in to account the sales tax issue).

6) In response to another member’s comment, "what am I buying this car for if I need a warranty," I am buying it for the gas mileage, the fun I have driving it, and because it’s made by a "reliable" car company. Not because I think it’s not going to have any repairs needed in 7 years, having had friends and families Toyota door handles fall off, CD players eat the disks, etc. In closing, on my Avalon, the seat belt design was such that it chipped the heck out of the side panel on the door. I made Toyota replace it under my EW under my warranty because of the "defective" design and with all my cars, if I hear a strange sound, I can take it in, get it checked out with 0 ded, and be on my way even if its fine.

Thus, in closing, I am buying piece of mind and resale value, and because this is America where we are all free to do our homework, utilize our experience, and then make the best choice based on our own circumstances. Cheers!

 

I've had the same thing happen to a Mustang right before the extended warranty expired, and the engine was of course replaced under warranty. But it was a Ford and that's far less likely to happen in a Toyota. The cost would've been only $1,000 to play the odds ($3,000 less the $2,000/cost of EW).

 

If you don't trust the company, that's a great reason not to buy a warranty from them.

 

I never said or implied it was a good idea. So, you don't even have to disagree. I simply asked for your statistics that support your hypothesis and suggested that your general claims may not always apply to specific situations.

Exactly. But as I suggested earlier, you could still make an effort to prove your point with 2nd gen Prius numbers. Start with Consumer Reports or True Delta charts on long term repairs per year. Adjust by the percentage the 2nd gen is above or below average. Then factor in typical problems and costs. Though it's only a rough estimate, it does give you a break even point. Then subtract the value added for roadside assistance if you'd purchase that separately. Now you have a ball park of a fair value of the warranty. If that's a lot lower than the best street price, then you've proven your point.

I don't disagree. You may well be right. But you're the one who brought up statistics and made a thread titled, "Extended Warranty on New Gen III is BAD IDEA". The onus of proof is upon you, if you wish to convice smart consumers of your claim. If not, that's fine, too, but I won't be doing the math for you.

That's swell. Don't know him. Don't care. Did he do an analysis of a 2010 Prius, based on any relevant numbers that can tell me the fair value of a given policy? If not, his general claims are fine in general, but that's all.

Common sense has it that investing in the stock market long term is low risk based on historic patterns. Didn't work so well this decade. But I don't want your common sense, I want the statistics you claimed to have.

Fine. No disagreement with that. What about on a new Gen III Prius Toyota EW sold at a steep discount to MSRP?

That's true, in general. But again, there's a range of selling prices where both parties can benefit due to the different costs they pay for parts and labor. If you strike out dealer profit by buying near cost from a high volume seller, a smart shopper may well be able to put yourself in that range.

Plus, if for every smart consumer who gets a good deal there are 10 others who pay MSRP, the seller still comes out way ahead. This principle works on most purchases. Every insurance company has actuaries that set prices to guarantee profitability. That doesn't necessarily mean that every buyer loses money. These are two issues you need to separate.

Anyway, you're dealing in generalities. I'm looking for specifics to justify for or against a potential purchase for members considering such a warranty on their New Gen III Prius. When you have some data and analysis, I may well be inclined to agree with you

 

Thank heavens...whew! Thanks for putting the information out there, though.

 

Its not about trust, its about perfection. No one or thing is. Plus, everyone keeps coming back to playing the odds with $2,000. I paid $1,055 with no sales tax (we normally have 8.5% but had a hybrid holiday). Plus if one is financing a car at 5% to 8% then they should wait until 35,000 miles, even if the price goes up. I am not paying interest (but guess the time value lost of the purchase is 1.5% at todays savings rate which will play off the odds the price will go up in 35 months : ). This horse has been beat dead so I surrender

 

What i wonder is does healthylaugh has health insurance?

 

Good point. Being self-employed, I guess I am over insured: full health, disability, and LTC. No life insurance though since the cat will inherit enough. While I am a big believer in proactive care, since I am not perfect (either like my autos), I wanted to make sure that I get the best of care, and am not a burden to family, if I need repairs or restoration.