Extended Warranty on New Gen III is BAD IDEA!

Actually, I argue that the negotiated rate used for parts and labor under and extended warranty is usually less than what a typical customer pays at the dealer. If you can do better, great. Just as some people can do better negotiating a lower cost on an extended warranty that might make it a better deal. An independent shop may be cheaper, but only if it has good techs, offers a warranty on repairs, has been around a while and uses quality parts. If you're lucky to have one of those that charges a lot less than a dealer on parts and labor (or do repairs yourself and buy parts online at a discount), then an extended warranty is much less likely to ever payoff for you.

Yup, I mentioned that too, as I can see both sides of the story. Don't forget about the powertrain and emissions warranties.

 

An EW *might* be a great deal. It's just damned unlikely.
Consider that car dealerships push EW about as much as glass etching and winterizing. That should be a clue.

 

At full price, on a car late in the model cycle with good reliability, they clearly make a lot of money for the dealer and manufacturer and rarely ever pay off for the consumer.

Again, the question based on the topic title is, given the anticipated reliability of an all new model like the Gen III Prius (from a reliable manufacturer like Toyota), what is an estimated break-even point given likely repairs not covered by the standard warranty? I don't have the answer as to what price is fair, but I also know it's not simply, "Never buy an extended warranty at any cost."

 

This seems like a question I can answer: break-even is repair costs equal to the EW cost.

Joking aside, you frame the question wrong. People buy EW for rare, unanticipated, costly repairs. In the G2 Prius these have been inverter/transmission failures. I've heard of about a dozen so far, and cost is about $5000.

Let's play with a bit of arithmetic: 12 repairs * $5k/repair is $60,000.
About 700,000 G2 Prius are wondering the roads of the US, with an average age of about 3.5. So let's double the failure rate and assume all of the failures occurred outside of standard warranty, divided by cars. Works out to 17 cents a car. Let's say 10 fold more failures have occurred if we include all other systems combined. We are now up to $1.70 value for the EW.

Happy shopping !

 

Well, I have to admit, these are the best statistics provided so far lol.

 

About what I would have expected from you.

 

We fell for the EW yesterday and I'm going back in tomorrow to cancel, it wasn't even a
Toyota warranty it's something called Tender Loving Care and was $1648. We paid for it
out of pocket and we told them to hold the check until Thurs. so hopefully they haven't
ran it through. I just read over the fine print and I can get a full cancellation refund if
done within 30 days. I don't know what we were thinking. I am however
sticking with the Auto-Butler paint protection, we had that done my
sons xD a year ago and it's been reapplied twice and I have to admit it still
looks awesome for vehicle that sits outside at college most of the time.

 

My warranty was 7yr/100,000 at $1899. However, if I don't use it in that time (2.5 years lots of driving) then I get a full refund (I know, I could have gotten interest, but not much). So its just another gamble, after all people say the PRIUS should last that long without repairs, but if it doesn't I paid too much ($1055 here), if it does last, I paid nothing. Since I got a 4.59% interest rate (lower than the 5.25 from my Credit Union) with the purchase I just did it.

Rich N.

 

Sorry to hear you found out "after the fact" about buying an extended warranty being a "bad idea". More importantly, I think you mean it's a bad idea to buy it "FROM THE GET GO". We waited until the car almost had 36K miles on it. With the 1st use, it paid for itself. After the next 2 uses, we were WAY ahead of the game money wise.

Like any "insurance" ... it's a crap shoot. You get it base on risk assessment. Our business has millions of coverage under an umbrella policy, for example, because we can't afford a million dollar liability. Our CA home has earthquake insurance (though it's the biggest rip of all) for the same reason ... though we'll probably never have a quake so big that we'll pass the $25K deductible ... but every one's choice has a different basis of needs.

BTW ... and more importantly (now that the thread is EIGHT pages long), the topic has been beaten to death in numerous threads already. Lo & behold, we've all repeated the same pros & cons here, that were previously stated in those threads ... with the usual passion, great depth, & emotion.
hwell:

http://priuschat.com/forums/gen-iii-2010-prius-main-forum/61161-do-i-buy-extended-warranty.html

http://priuschat.com/forums/gen-iii-2010-prius-main-forum/68356-extended-warranty.html

http://priuschat.com/forums/gen-ii-prius-main-forum/35877-prius-toyota-extended-warranty.html

http://priuschat.com/forums/gen-ii-...gret-buying-not-buying-extended-warranty.html

The search tool (though it sucks butt sometimes) can be your friend


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Well I went back in to take in the extra keys for what we traded and was going
cancel the warranty but the Finance Director came in knocked almost
$800 off of it and got us a little better interest rate. The discount gave us
basically the same warranty available here for almost the same price so we
went with it. I was paying for the warranty and Auto Butler paint and interior
protection out of my pocket and I don't think they wanted to see that cash suddenly
disappearing.

Auto Butler - "Keep that New Car Shine"

 

I was given a hard sell by a sales manager as I was trying to wrap up the purchase of my Prius and get out of the dealership. I said no! But I had to say it over and over. Left a bad taste in my mouth.

 

Paint and interior protection, like extended warranties, are also ream jobs. When the high-pressure specialist comes in selling all that junk just smile and say "no" until they go away.

 

Well I know this much, my sons Scion xD has had the Auto Butler applied 3 times now and each time you would think you were getting into a new car, absolutely spotless, smells new again, it's slicker than glass. Personally I think the Auto Butler is worth it. I care nothing about hand waxing a car.

 

My dealer never tried to upsell me on anything. Did the paperwork by e-mail and fed ex. Drove down and picked it up and was in and out in 45 minutes - and only that long because they had to disable the seat belt beep and reverse beep - which they did at no charge and with no issues at all. I may buy my next car there, even if it is 90 miles away.

 

Just curious why disable the seat belt and reverse beep?

 

umm, because they're annoying?

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Some people hate the reverse peep and change it to 1 beep instead of constant. The passenger seat belt beeper is generally disabled so you can set a package on the seat without it beeping all the time.