Extended Warranty on New Gen III is BAD IDEA!

[HTMLSpinnr]

While I had only $400 in repairs on my 2004, there were items I "would have repaired" had they been covered (dash warpage, etc.) that I just let go due to cost.

For the 2010, there are some new pieces of technology, that, while I have total faith in Toyota, their reliability will only demonstrate over time. For instance, mixing coolant and exhaust in the same system - not once, but twice (cooled EGR and exhaust heat recovery). Exhaust gases are corrosive and from what I've seen, a stainless steel exhaust system only buys time vs. preventing corrosion. Translation, I felt that there was a small likelihood of developing a leak in one of these systems that could eventually become expensive. Should it happen within the first 7y/100k miles, it'd at least be covered. This was my justification for getting the warranty - combined w/ my prior experience w/ first year releases.

I simply consider it part of the cost of being an early adopter. To each his/her own though.

[jay_man2]

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.

[radioprius1]

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.

[healthylaugh]

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.

Bravo... well stated. These vendors run the nunmbers and they are in the EW biz to make money--period.

Some who don't agree with my thesis are making personal attacks such as:

"I must be young (and immature)" or

"I'm rigid and one-sided" or

"there is no truth to my statements."

1) I'm neither young nor inexperienced. I'm a consumer advocate and a professional writer/speaker. Immature? Always, life's more fun that way.

2) Read my posts again, I clearly welcome everyone to make a choice with wihich they are comfortable, but the choice to buy an EW does not change the facts that no company sells these at a loss, based upon their empirical evidence.

This may inflame some, but it's Mr. Schumacher's hard truth: If a person cannot stand to bear a catastrophic repair out of pocket, they have bought a vehicle too expensive for them and their budget. If, as one poster stated, you "live paycheck to paycheck," you are the poster boy (or girl) for the economic meltdown we're in--too much credit, too little common sense/delayed gratification. Buying any new car when you're that tight for money means no EW is going to save you if you lose your job, get sick and cannot work, and so forth...

3) Bring your data about how EW companies are altruistic and have the consumer's best interest at heart. Of course if you get it cheap enough, it's a good deal at a certain point and everyone needs to decide that number for themselves (BUT if the company does not honor the repair or goes out of business, no "discounted price" is good).

I have ex-dealer F&I friends and now that they're out of the biz, they openly admit taking advantage of buyers via the EW and own large houses and expensive toys from their proceeds of same.

Furthermore, the medical insurance analogy is not germane, mainly because medical issues can be far more opressive financially, whereas one's exposure with this car is in the mid-20 thousands (and no non-accident failure ever costs the entire purchase price). You can chew that up on the personal medical side in a hurry with one labotomy, which is what you need if you ignore the facts. <j/k> kind of...

Some who disagree have made valid points, but again IMHO, none override the statistics. I respect all opinions and embrace the freedoms that are quickly being eroded in this country. I also clearly express that these are my opinions and the opinions of many experts based upon facts. If you choose to ignore them or disagree, I respect that fully. So enough with the personal attacks. Sinmply bring your verified stats...

LAST ITEM: I'm unclear on the statement that WarrantyShack.com is an official Toyota warranty? Do you have a signed contract from Toyota Motor Corporation stating that they will honor any and all warranties purchased through them if WarrantyShack.com goes kaput? If so, I stand corrected and apologize profusely for my error.

[LoraJ]

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.

[dhs]

Originally Posted by healthylaugh

LAST ITEM: I'm unclear on the statement that WarrantyShack.com is an official Toyota warranty? Do you have a signed contract from Toyota Motor Corporation stating that they will honor any and all warranties purchased through them if WarrantyShack.com goes kaput? If so, I stand corrected and apologize profusely for my error.

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.

[CPSDarren]

Originally Posted by healthylaugh

Some who disagree have made valid points, but again IMHO, none override the statistics.

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.

[jaywolf]

Originally Posted by dhs

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.

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

[Jon S]

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...

[hampdenwireless]

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?