Discounted Toyota Prius Extended Warranty /Service Contracts

[mikepaul]

well if that were the case i would have jumped on it immediately for nearly any price!

Last I heard, that's the way it would work.

I'm always ready to be corrected, though...

[DaveinOlyWA]

well that would not put the buyer at any risk at all and anyone would be a fool not to do it if they were to receive their money back no matter what.

i think i will wait and see how my car goes first since i can do the warranty later if i want. to be honest with ya in the short time that i have had my car, i dont feel that the extra coverage will be needed. i am willing to gamble against Toyota's legendary reliability.

[woemcats]

The value of the plan is prorated based on how much you use. That is, if it's a 100K plan and you decide to end the warranty at 75K, you get 25 percent of the original cost back. So it isn't that there is no risk at all and you just get your money back in 7 years if you don't use the warranty.

[jimfcarroll]

PriusChat is proud to announce a partnership that will enable us to provide you with the lowest possible price on the official Toyota Extended Service Contract.

OK. I called several local dealers and they ALL gave me the exact same price - $1440 for 6Y/100K/$0. What am I missing?

[jchu]

I suspect that that ($1440) is the current "MSRP" In March we got ours at the Minnesota dealership where we got our Prius for about $1300 rather than buying locally in Idaho or going with the dealer mentioned elsewhere here in PC who was selling the same contract for just under $1000. Obviously, there is some cushion in there and Danny is giving us a great deal. I, however, am stuck with the current contract because my wife insists. We were treated so well by Walser in Bloomington that she has also insisted that we go back to them for our second car as well despite the 1500 miles between us and the dealership!!! On their waiting list since early June. Delivery sometime first quarter next year.

[mikepaul]

The value of the plan is prorated based on how much you use. That is, if it's a 100K plan and you decide to end the warranty at 75K, you get 25 percent of the original cost back. So it isn't that there is no risk at all and you just get your money back in 7 years if you don't use the warranty.

I read that if you don't use it AT ALL, the *full* price was refunded. Even one small use for a $10 light housing and there would be no refund.

Now I'll have to go back and see if I can find what I read...

So far, all I can find is this:

Beware of phony "refundable" contracts. A favorite sales gimmick used by dealer's to push over-priced warranty contracts, is the "refundable" policy. These policies promise a full refund at the end of the contract if no claims are made. Mark Eskeldson in What Car Dealers Don't Want You To Know, points out that this brilliant marketing strategy actually discourages people from making claims, particularly if the claims are required to be made within a specified time after the repair (typically 30 to 60 days). Eskeldson writes,
"Let's say your car needs a $600 repair in the fourth year, but you don't file a claim because you want a full refund of the $1800 you paid for the warranty. In the 5th year, your car needs another $600 repair (you're still hoping to get your money back). In year six, another repair is needed, this time $1,000.

"What do you do now? If you file the claim, you'll only be covered for the latest repair, not the first two that cost $1,200. You won't get your $1,800 back and your total repair costs will be $3,000, including the warranty. If you don't file the claim, you will get the $1,800 without interest, but only you spent $2,200 on repairs. Had you put the original $1,800 into an account paying 5% interest, you would have had over $2,200 to pay the bills."

In such a scenario, it's clear to see who the winner is.

But I can't find where the Toyota Platinum Service Contract is sold as 'refundable', even though I believe I read it was...

[woemcats]

Well, it is refundablein a sense. You can cancel at any time, but you lose the amount of COVERAGE you used, even if you had no claims. It's like insurance. You pay Allstate $100 per month IN CASE you get in an accident. If you paid a premium for 6 months and cancelled at 4, you'd get only two months refunded to you, whether you had any claims in the other 4 months or not.

For example, if I bought the six-year warranty at too high a price when I got my car, then found a price $600 cheaper a year later, I'd have to do the math. Toyota, when I cancelled the extended warranty, would subtract the 12 months of the policy that had elapsed from, say, the seven year contract. If I originally paid $1600, I'd get a refund of $1333.33 (minus an additional $50 processing fee).

To wit:

72 month policy for $1600.
Cost per month of the policy: $22.22
Cost for a year: $266.67

That is how the Toyota warranty is sold. I've honestly never heard of a refundable warranty, which just sounds like a scam, but who knows. Apologies if you already understood what I was talking about before this post.

[DaveinOlyWA]

after reading your post, i called my dealer and there is no refund at all. the price of 1240$ was a $200 discount offered me because of the wait i had (157 days) and although it expired tuesday, i was told by the service manager that they will honor the discount even if expired on a case by case basis with anything within a month nearly garanteed. he also said that you do not get anything back if its not used. what would be the point?

he did say that you can cancel at any time without penalty and get your money back prorated for the time you did have coverage.

[Danny]

Well, it is refundablein a sense. You can cancel at any time, but you lose the amount of COVERAGE you used, even if you had no claims. It's like insurance. You pay Allstate $100 per month IN CASE you get in an accident. If you paid a premium for 6 months and cancelled at 4, you'd get only two months refunded to you, whether you had any claims in the other 4 months or not.

For example, if I bought the six-year warranty at too high a price when I got my car, then found a price $600 cheaper a year later, I'd have to do the math. Toyota, when I cancelled the extended warranty, would subtract the 12 months of the policy that had elapsed from, say, the seven year contract. If I originally paid $1600, I'd get a refund of $1333.33 (minus an additional $50 processing fee).

To wit:

72 month policy for $1600.
Cost per month of the policy: $22.22
Cost for a year: $266.67

That is how the Toyota warranty is sold. I've honestly never heard of a refundable warranty, which just sounds like a scam, but who knows. Apologies if you already understood what I was talking about before this post.

Exactly. This is what I understand from dealing with Toyota Financial.

[mikepaul]

Well, the Yahoo groups take forever to search, and the warranty information at http://www.vfaq.net/docs/ExtendedWarranty.html don't say anything about refundable if not used, so I'll just give up.

However, once upon a time there was a posting somewhere about it. My imagination isn't all that good...