Extended Warranty on New Gen III is BAD IDEA!

[ceric]

heathylaugh,

I bought EW from Troy (warrantyShack.com). I know what I got. It is GENUINE TOYOTA WARRANTY (I hope this is loud enough for you). So many of senior members here have bought from Troy and some even used it. Are we all stupid?

Some of your advices are valid points.
However, for $700 I got for my '05 to cover 7yr/80K.
Any non-hybird component failure would have costed more than $500 easily. There have been many (not slim chance) MFD failures reported for '04-'05. Each costs more than $1000 to repair at dealer.

Again, EW has been beaten to death as a topic here.
It is personal financial decision one has to make. Calling it a "waste of money" is insulting to people who cannot afford risks. (you know that there are people who live from paycheck to paycheck, right?)
You also loose money statistically buying medical insurance. Why do you have it?
That's right. You probably can't afford the risk of having to pay $100K out of pocket.
Well, some people can't afford to pay $1-2k expectedly. Different amounts, same reasoning.

For Toyota warranty, $2000 is a ripoff.
Below $1000 is a great deal. (7yr/80K-100K)

Statistics is useful information BEFORE you buy a vehicle. Once you GOT one, statistics does not apply to yours anymore. Your luck kicks in. Keep your fingers crossed. There are lemons from Toyota (like all other brands).
Search the web for such horrible stories.

Seriously, think about canceling your medical insurance. They are statistically bad financial investment. So is life insurance, etc.

[pakitt]

The only EW available on the Prius in Germany/EU that I am aware of is the one offered directly from Toyota. It is not offered by default from the sales person, as it is clear that it makes sense to buy it withing the 3rd year of standard warranty offered in the EU for the non-hybrid parts (5 years on the hybrid parts).
If you want, you can then buy the extension from Toyota, for the next 2 years, for about 200€ - if I understood correctly. I would never sign an extension for 2000€, considering also the quality (or supposed quality) of Toyota.
Nobody/3rd party in EU would ever offer an EW on a Prius (or any other car/manufacturer for that matter) - I don't even think it is legal. Warranty in EU is only guaranteed from the manufacturer who is responsible for all repairs that fall under such warranty.

[edmcohen]

This discussion elsewhere on the forum is relevant:
Real pricing for 2010 Prius

[wvgasguy]

Your rant is something I would expect after seeing your icon. One sided opinion with a little truth mixed in and based on worst case scenario's. The warranty offered by Troy is the Toyota Warranty. I wouldn't recommend a third party warranty either. They do go bust. Toyota willnot go bust and you won't have to argue with them. As for stain warranties and the like, they are third party and I would never recommend them

These Toyota warranties are indeed insurance. Insurance is arguably only good when you use it. The rest of the time it simply assures you that you won't have to spend anymore than what you put into the warranty. Now that Toyota offers a 125K mile warranty I consider it a nice feature just for the resale of the vehicle to a second owner. I really didn't want one until the 125K option came out. I would never consider a uned car with 80K+ miles on it without some guarentee's. I think the 125K warranty will almost pay for itself when you go to sell your car. And BTW, not I wouldn't pay $2K for it.

Your response about pricing it just under $2000 makes me think you are young and inexperienced. This has been a marketing ploy for decades and may have worked for some. But any adult knows that $1999 is actually 2 grand.

Your rant on WarrantyShack, and then you disclaimer on not accusing them or knowing anything about them is typical of the rest of your commentaries. You don't know what you're talking about.

[angelrob]

Originally Posted by mplsman

Yes my dealer tried to talk me into this aswell. I said that if a new Toyota couldn't last five years without needing that kind of money spent on repair, then I shouldn't be buying one. He shut up after that.

My "business manager" (the guy who did the paperwork at delivery) had a list of extended warranties (paint, interior, undercoating, etc.) The "road hazard" was one that I have had on all my new tires. However, theirs was $599!!! I thought it was a typo. Surely they meant like $5.99 for each tire or something? No, I questioned him and he said it was $599 for the tire package. I said "couldn't I buy 4 new tires for that amount?" (suddenly wondering just how expensive these tires are)

He nodded once and quietly turned to the next page.

[ALS]

I feel it is way over priced for the length and mileage. When I bought my last Volvo I was offered a 5 yr unlimited mileage bumper to bumper warranty for $555. It was such a bargain I couldn't pass it up. I was in sales at the time and piling up mileage at a good rate.

There were people with 200K-250K miles on their car collecting on those warranties.

If Toyota offered a factory extended warranty for 10yr, 100K miles for under $1K, I would consider buying it. Third party no way.

Any modern car that is properly maintained should run relatively problem free for at least 150K.

[CPSDarren]

Originally Posted by healthylaugh

As far as it being a personal choice. Everything in life is, so that goes without saying. The extended warranty, however, is a bad bet. The statistics don't lie, so please don't misconstrue my intent. The choice is purely yours.

If you want to make the smart play, the EW is a bad idea. Some responders have continued to refer to their "risk tolerance," etc.

Again, if you think you're solving your risk by buying the warranty, I have another way to look at it:

If you buy the EW, you're taking a far worse statistical risk that you will "waste" your EW dollars.

Statistics require data. Data on how much was paid. Data on the coverage. Data on the provider. Data on repair frequency. Data on cost of repairs. Etc. Statistics do indeed lie, as they are easily and often omitted or twisted. So far, I've seen no statistics regarding Prius warranties or repairs.

Even cars with above average reliability are likely to have a couple repair visits over the years after the factory warranty expires. The question is how costly those repairs will be vs. the up front cost of an extended warranty.

Dealers and manufacturers sell these things to make money. They make a ton at sticker price. When heavily discounted, it's possible for both parties to come out ahead. The reason is that the consumer pays higher prices on parts and labor than does the manufacturer through their arrangements with the dealer.

Would you turn down a Toyota 7/100 EW if it was $1000 instead of $2000? What about if it was $800? $500? $300? $10? There's a cost where it becomes a reasonable gamble. The question is where is that cost for a 2010 Prius. I'm sure you could dig up some theoretical numbers for a 2nd Gen Prius from Consumer Reports or True Delta or somewhere if you really wanted to prove your point. Add an amount because the 2010 is "all new" and you have a starting point for an interesting discussion.

[richard schumacher]

Why yes, throwing away $1000 is certainly a better deal than throwing away $2000.

EWs are always priced to make a profit for the seller, not for the buyer. If they didn't make a profit for the seller the seller would go out of business. Period, end of discussion, no statistics required. On average you will not get your money back. You might as well play roulette. Use that $1000 to reduce the amount you finance or buy a 12 month bank CD, and you will get more value from it. Nothing gives "peace of mind" like "cash in hand".

If you cannot afford the low possibility of paying for a major repair out-of-pocket on your new car, that is strong evidence that you really cannot afford to buy a new car.

[Judgeless]

I agree with many that have posted in this tread. The extended warranty is a waste of money.

I have a 2000 4Runner with 305,000 miles. Over the last 10 years I have had less then $1,000 in total repairs. Most of the repairs happen in the last 3 years that never would be covered by the extended warranty. Do not waste your money.

The old and new

[CPSDarren]

Originally Posted by richard schumacher

Why yes, throwing away $1000 is certainly a better deal than throwing away $2000.

EWs are always priced to make a profit for the seller, not for the buyer. If they didn't make a profit for the seller the seller would go out of business. Period, end of discussion, no statistics required. On average you will not get your money back. You might as well play roulette. Use that $1000 to reduce the amount you finance or buy a 12 month bank CD, and you will get more value from it. Nothing gives "peace of mind" like "cash in hand".

If you cannot afford the low possibility of paying for a major repair out-of-pocket on your new car, that is strong evidence that you really cannot afford to buy a new car.

With this type of rigid thinking, as ceric said above, you would also cancel any other form of insurance you have. Life, medical, auto, etc. They're all priced to make a profit for the seller. Thus, no value to the buyer. End of discussion, no statistics required. On average, you will not get your money back. Keep your cash in hand and peace of mind.

Or maybe you think these types of insurance differ because you don't pay them up front? Or they aren't as expensive per payment? Or the potential risk is greater? Or the odds of catastrophe are different? Well, yeah, there are variables that might make them a good gamble, just as there are with extended auto warranties.