Is Prius extended warranty ever worth it?

I have to admit, I am math challenged. Seems to be your specialty though as you seem to equate everything to math.

 

Ahh.. a logic moment.

Everything is not math, but I am only talking about the math. I thought I made that clear.

 

Well adding a loan with interests on a fixed income doesn't seem like good math, seems like you'll be cutting back on other qualities of life.

 

Now you're just being childish. Even though you don't find any value in an EW, some people do and there is nothing wrong with that. If you don't like one, don't buy one. Why is it such a big deal to you if someone buys one? It's their money, not yours, and you sure won't be there if they end up in that 1% that has a failure.

 

Unlike spending $35 a month for the EW ?

Grab a finance calculator and compare.

Nothing wrong with eating $100 bills rather than apples either, so long as you do not over due it.

Your personal preferences are only your concern; just do not confuse them with financial prudence when it comes to a Prius EW.

 

I think you're confusing someone with the flexibility of having $4000 at any given time for a repair vs someone that doesn't and need a warranty to hedge repair costs.

 

Give me a break, you said that the last time the analogy was brought up. Do you think insurance companies sell insurance to lose money? Of course not. I can guarantee you that insurance companies have made a much bigger profit off me in over 40 years than Toyota ever will selling me an EW.

 

I am not. Calculate the additional interest the unlucky 1% will pay. Presume:

1. 5 - 15% apr
2. $1000 principle ($2000 saved after 5 years, another $1000 needed to complete repair.)
3. Payback at $35 a month

Remember, you are going to compare this number to the other 99% of owners who did not buy the EW and saved $ 1200 - 2000. If you want to, feel free to include the opportunity gain of that saved EW. Anywhere from 1% apr in a checking account to 25% apr to pay down credit card debt. It is probably pretty fair to state that the credit rate available to people who want to borrow money is not too far different from the rate people get when they want to save money. I would call it a (-) 3% spread for those without savings.

 

And that's why I don't advocate one way or the other, I simply try to offer things to consider. And for the record, please note that I have stated that I am generally against buying an EW. I just refuse to tell someone on the internet who I don't know unequivocally not to buy one. I can tell them I think it's too expensive, etc., but I certainly wouldn't call someone I don't know foolish/stupid and that's the only part of this whole discuss I object to.

 

Well you are talking 1 repair, as oppose to multiple repairs that the warranty covers up to normally 100k miles. That would be a curveball to the calculations.

I also think the 1% is a low figure. I would think more people actually run into situation where the warranty would pay off. But once again, these warranties are money makers for the company and it's not for everybody.

 

One or many, count the number of repairs reported here on PC that exceeded $3000 in cars with no more than 100k miles that would be covered by an EW but not by one of the standard Toyota warranties. And remember: these are the rational people who shop the repair rather than go to the dealership with an open Toyota checkbook.

I understand your POV.

I am not calling preferences stupid; I am saying that only a fool would think it is a financially prudent decision.

 

DoubleDAZ needed a new engine....

Yes the percentage that need a $4000+ repair is low and it probably is wise not to buy the EW. However when you're on a fixed income and don't have additional money to spend on expensive repairs, EW makes lots of sense.

I would rather be able to afford a car payment with no surprises (with EW) than to save money on a rainy day fund and be surprised with an expensive repair I can't afford later.

I also don't think the PriusChat numbers are the ones to go by, you would need a survey going out to all the owners to really know. Not every owner is on Priuschat

 

That is ~ $500 + labor for a lightly used one. Remember, we are talking rational people here. Was that a Prius ?

I am waiting for your interest calc.

 

Not everybody likes to go out and source their parts and find a mechanic to install them. That takes a lot of time and used parts don't always work. Besides....some people actually still have jobs and are not retired.

Heck if this were the case, it would never makes any financial sense to buy anything NEW.

What interest calc? Are you assuming people can get 2nd loans?

 

Calculate the additional interest the unlucky 1% will pay. Presume:

1. 5 - 15% apr
2. $1000 principle ($2000 saved after 5 years, another $1000 needed to complete repair.)
3. Payback at $35 a month

Remember, you are going to compare this number to the other 99% of owners who did not buy the EW and saved $ 1200 - 2000. If you want to, feel free to include the opportunity gain of that saved EW. Anywhere from 1% apr in a checking account to 25% apr to pay down credit card debt. I am presuming they have access to credit. This is America after all, except for credit cripples I have already discussed.

 

I'm math challenged

 

Then stop throwing out advice or opinion, since you cannot calculate the numbers on which rational advice is based.

 

I didn't give out any advice. We are having a discussion on when buying " Is Prius extended warranty ever worth it?

 

Indeed, and specifically financial prudence. Since you cannot calculate (or use a calculator) to even know what amounts are in the range of possibilities, why are you in this discussion at all ?

There has been one beneficial side-efffect to this discussion with you. Now I realize that EW buyers have two characteristics, not just the over extended/ credit_crippled one I mentioned. They are also math crippled and unable to seek help.

 

You haven't answered how you can cover a $4000 repair when you're on a fixed income? With your $35/mo rainy day up to only $1500.

Your answer is to get a loan and get into debt with money you don't have to pay the loan. Is that the solution?