Is an vehicle protection plan worth it?

Sound like you have a plan in place. Any money that you did not spend on the plan, you could just place in a saving for future use if and when the vehicle needs it. If not for this car, then you can use it for your next car purchase down the road.

 

I just picked up a 21' Prius Prime LE this week.. The dealer sold me the platinum service plan from Toyota 6 yr/125k mi $0 deductible for $1495 and prepaid maintenance 5 yr/75k miles for $1030. After reading in this thread it seems like these prices aren't bad, but I am starting to wonder if they're really worth it. I drive around 20k-25k/yr and I do think the car will go 125k miles without issues. And the one thing on the prepaid maintenance is it states the intervals are 10k miles so I am thinking only the oil changes are covered and the in-between 5k mile maintenances are not covered? But the 30k and 60k mile services will fall under this maintenance plan.

 

Golden Rule....
If you "get a feeling" that somebody has ripped off some of your gold?
They probably have.



WHY do you think this is a thing?

In a fair and just world you SHOULD be able to make absolute statements, and in that world "extended warranty" should be in the same category of low level non-violent crime as selling worthless cancer policies, time share property 'investment', credit life policies, penny stocks, etc....

HOWEVER (comma!)
America is no longer a nation of majority rural, self-reliant rugged individualists who work on their own relatively simple machinery...taught to 'question authority' and NOT trust anyone over 30.
Add to this....
Cars are wildly expensive, insanely complicated, and often sold to people who happily sign five, six, heck....sometimes even seven, year loan agreements on a car that comes with a three year b2b warranty with lots of holes in it....and a "powertrain" warranty with enough exclusions and exceptions to sometimes come with a "lifetime" term.
Since people

My own vehicles, for example, have 100,000 mile powertrain warranties that "might" cover the pistons and rods.

Since we don't live in a world of absolutes.....
I'll provide some links to help you with the mental coin toss where extended warranties are concerned......(**)

Extended Car Warranty: Is It Worth It? | Credit Karma
Extended Auto Warranties: 5 Questions to Ask Before You Say 'Yes' | Edmunds
Should You Buy an Extended Warranty on Your Car? - Clark Howard


(**) There's NO QUESTION where "maintenance plans" are concerned....
Even IF they actually performed all of the maintenance in the warranty and maintenance guide (hint: they don't!), and even IF they never tried to up-sell you on rip-off, unneeded items that are not in the warranty and maintenance guide (YMMV) it's utterly foolish to "pre-pay" for this service.

However (comma!) since people sometimes think that 'data' and 'truth' are the same thing.....actual mileage WILL vary.
Should You Get an Extended Warranty for Your Car? - Consumer Reports
Should You Buy a Prepaid Car Maintenance Plan? | Edmunds.com

 

A couple people mentioned consumer reports, this is their advice on what to do instead of buying an extended warranty or prepaid maintenance. Take whatever the price the dealer is offering, don't buy it and instead put that amount in a savings account. If something happens then you have that money to pay for it, most of the time it will cost way less than the initial outlay for an extended warranty. And if nothing happens, you get to keep the money, use it as the down payment on your next car.

you will have that piece of mind a warranty gives you, if something major happens you have that emergency fund to take care of it. Most likely, especially with a reliable car, you want have any major expense.

 

+1 for this statement.

And if I would further suggest a better way to prepare for unexpected future cost, instead of putting money in a saving account where it is earning a minuscule amount of interest, open up a brokerage account and invest the money in something your risk tolerance can handle. ROI is far better than money in a saving accout for most cases.

 

You don’t need a special savings account. Car repairs are just part of life.

 

I actually like having a special account, be that a checking account, a saving account, or a brokerage account, for different budgetary purposes. With online accounts, it is very easy to transfer money from one account to another without ever seeing a teller. I currently have 10 different accounts all handling liquid assets. If I include non-liquid investment accounts for retirement savings, the number will increase to 16 total accounts.

 

Most people who buy these "services" think that they cannot "afford" to put $1500 into savings...(while shelling out $$ for a new car.)
It's easy....all you have to do is sign a piece of paper, right?

 

im new here. But this all makes sense. I was offered an extended
warentee on a 800 dollar hot water heater. It was some insane
price like 12 dollars a month. I asked the salesman what the average life span if an electric hit water heater was ..he said 10 yrs
i said i could put 12 a mnth aside
for 10 yrs and buy a new HWH.
Why on earth would a car dealer
offer a warrentee on a losing proposition??. they dont. its pure profit. like any insurance/maint plan. your paying thousands for
a handful of free oil changes..
Sorry. I usually stop the finance guy and tell him "can i just sign something that says you offered me this stuf and i declined"
But im a hard sell..

 

One thing to note - you can get Toyota plans cheaper at other dealerships. There's a thread on Slickdeals listing Toyota dealerships that will quote prices FAR below what you'll normally get - I can link it if interested, or just Google for "slickdeals car extended warranty", it's a big thread with known good price havers from all the major brands.

I'll probably skip it on my Prime but I will buy it on my 4Runner as I beat the ever loving sh*t out of that thing. The warranty was half of what it was at my local dealership, same first party coverage.

 

Getting robbed for only half the money is still getting robbed.

There are some VERY few people that benefit from an extended FACTORY warranty, paid for with cash, but it's like car leasing (fleecing.)
There are VERY few financial experts that agree that these plans are worth the money.

 

It really depends. If you're buying a high-end BMW or Land Rover, it's extremely likely you will use the warranty if you keep it for 5 years. For a Toyota, you're buying peace of mind. Personally, eliminating a bit of worry that could nag me slightly over the course of years is well worth $1500 or so.

 

I find that having several thousand dollars in a vehicle maintenance fund eliminates MORE worry, but then.....my last 4 cars (GMCs) have had zero problems that would have required a dealer visit in the first 150,000 miles.....so my vehicle maintenance fund is much larger than $1500.

IIRC, Toyota's B2B warranty is 36,000 miles and their super-duper titanium warranty is for 125,000 miles.
Typically Toyotas hold together for 125,000 miles even with very marginal maintenance, and IIRC most the hybrid components are covered by the base warranty out to 100,000 miles. I think that their powertrain warranty is good to something like 60,000 miles but they are rather selective about "covered" repairs......AND most people think (incorrectly!) that you have to have maintenance and repairs performed by the same crooks that sold you the car - even (in some extreme cases) the same exact dealership!

YOUR car belongs to YOU!
Well....in many cases by the bank, but that's ANOTHER topic....

Peace of mind?
Sounds more like Stockholm syndrome to me....

BMWs and Lahnd Rovahs are much more up-scale products than Yotas, even if they usually REQUIRE major surgery before they hit 100,000 miles. They represent a different 'type' of buyer.....usually one who is not worried about financial matters because they do not have to......or simply do not WANT to.
They usually don't ask questions on car forums about whether getting extended warranties or prepiad service is "worth it." because in the case of the former they already know the answer and in the case of the latter they simply do not care.

 

Heck after all the rebates and tax credits, $1500 is almost 10% of the price of the Prime LE we have!

Also, the emissions warranties and hybrid/battery cover a lot of expensive equipment for many miles/years. So Prime - nope.

Now my VW, on the other hand - a brand that I hadn't owned before and read many horror stories of electronic gremlins, turbo issue, or carbon buildup - I decided to get Geico MBI (mechanical breakdown insurance). Costs roughly $90-100 per year and I didn't have to buy it until just before 15 mo or 15k miles on the new car. Good for 7yr/100k and covers everything that isn't wear & tear, with a $250 deductible. Cheaper insurance than a factory warranty, with the seller for me, being a $50 deductible for windshield replacement. Previous cars always cracked a windshield during my ownership.
Results (as of today) 70k miles, 5 years in 0 repairs on it. One windshield chip that was touched up for free and hasn't spread. (regular insurance from Geico covered that). So far I'm losing on the MBI. At least the total cost of MBI will be $600ish, though, vs $1500-2k for a factory extended warranty?

 

The extended warranty is an insurance plan. Some of you who buy it use its money's worth, but most of the people who buy the plan end up losing money. If not, they would not be offering such a plan anymore. Yeah, it is the same thing as the collision & comprehensive plan of your insurance. You are not required to have it, but if buying the plan makes you sleep better at night, then that is worth the money.

But as far as Prius PRIME sold in our region is concerned, any extra warranty plan is a total waste of money. It is cheaper to trade in and buy a new PP before the factory warranty expires.

 

Totally a valid opinion, I get it. I've had worse luck than you, I had a 2019 Chevy Colorado strand me TWICE in the wilderness due to faulty hoses, one of which destroyed the engine. Granted this was under factory warranty but this stuff does happen.

The only thing I'd disagree on is the actual wealth of the buyer influencing all that. I'm 35, married, work in tech in Seattle, own two homes, two cars, zero debt besides mortgage. Most people of my stature own BMWs or Teslas, I don't just because I literally do not care what randos think of me and I already have my girl.

 

I have only had it twice on my Toyotas and both times we never used them. But my wife thought it would be a good idea and felt better about it. I would not hesitate to consider one if I bought another brand. But I've mostly owned Toyotas and have never honestly had that many problems except small things happen to them. Having owned my 2020 Prime for a year and a half now, the only thing I can really complain about it the driver window has a little streak on it like something is rubbing within the door itself. I don't think it's scratched, just a streak that appears.