Fuel system appears bad... Should I buy an outside warranty?

The fuel gauge on my 2001 Prius just began flashing abnormally tonight. It's a full tank of gas, but at first only half of the bars lit up. Then they started flashing. Now only the bottom bar lights up, and it flashes.

So, based on the description in owner's manual, I'm guessing my fuel system is bad. I know this is a common problem with Classic Prii.

My factory warranty has expired, and Toyota won't let me buy an extended warranty, so I've been considering buying a non-Toyota warranty for the car. First National Warranty/Warranty America, LLC just offered me a 5-year bumper-to-bumper warranty (covers what the factory warranty would cover -- just about everything but the batteries, they claim) for $1,800. Suddenly, with a new repair facing me -- like, next week -- I'm taking this offer seriously.

My questions are as follows:

1) Anyone know the ballpark price range for a fuel system repair...?

2) Anyone have any experience with First National Warranty or Warranty America, LLC? Know if they're trustworthy? Will issues pop up that they'll refuse to cover? Do they pay promptly, reliably, etc.? (They say they pay Toyota dealers with a corporate credit card.)

3) Know any better warranty options...?

I just bought this car. I love it, but (before this upcoming repair, anyway) I could still sell it to a dealer and make a small profit above what I paid in April. What with the remaining warranties on the verge of expiration, I'm considering selling it right away and trading it in for a car with smaller car payments. Wish I could afford a brand new Prius, or almost any brand new car for that matter, but I can't.

So now I have to make these decisions in a matter of a few days.

Can anyone help with a little advice...?

Thanks!

 

Re: Fuel system appears bad... Should I buy an outside warra

(1) You haven't asked whether this insurance program covers pre-existing issues.
(2) The insurance company doesn't ask whether the car has pre-existing problems, only how many miles are on the car. I haven't done anything fraudulent -- I haven't lied about the condition of the car. How am I being untrustworthy?
(3) If the symptoms of my "pre-existing" problem appeared one day after I bought the insurance, you'd have no problem with me asking the insurance company to pay, and you wouldn't worry that your rates would go up. But they appear one day before I buy the insurance, and you call it "fraud" regardless of the terms of the deal. Here's the offer this insurance company is making: You pay us $1,800 and we'll cover every repair it needs. They're gambling that $1,800 is greater than the cost of the repairs the car will eventually need. I'm not going to lose sleep over asking them to pay for a repair they would have had to cover had I enrolled yesterday (as I contemplated doing). Your rates will be as safe if I enrolled today as they would have been had the problem occured after I enrolled. The financial equation for the insurer is exactly the same.
(4) YOU'RE expecting that $1,800 is greater than the cost of the repairs that the car will eventually need. Why would the rates of their other customers go up if they're making exactly as much money as they expected to make on this deal?
(5) This kind of logic -- one day before, ahh you're fine, one day after, you're fraudulent or unworthy of coverage -- is the logic that keeps the people who most need help with health costs from being able to obtain insurance. A theater company once captured the absurdity of this problem with a sketch called "The Health Insurance Cafe": A customer at a restaurant confesses to the waitress that he came into the restaurant because he's feeling hungry. "A-HA!" the waitress cries, furiously pointing at the customer. "PRE-EXISTING CONDITION!!!"

And you want to talk about nerve.

 

Re: Fuel system appears bad... Should I buy an outside warra

If I misread your post I apologize, but what you said was, "Come on now, you have some nerve! You want them to be trustworthy when you are not." How is that not attacking me personally?

Again, the insurance company has not told me they will not work on "pre-existing" problems, so there is no fraud involved here. I have not lied about the condition of my car, and they haven't told me pre-existing issues are a problem. The day on which symptoms appear is not the primary determinant of fraud. Deception is. (American Heritage Dictionary defines fraud as "deception deliberately practiced in order to secure unfair or unlawful gain.") Some insurance companies knowingly assume the risk of pre-existing conditions -- for example, when an HMO accepts a patient even though a doctor has told him he should have leg surgery or a filling for a tooth cavity. Insurance companies decide what they can afford, and make their policies about pre-existing conditions accordingly. In this case, the insurance company in question has apparently decided it can afford to cover some pre-existing issues. Obviously, a totaled car is different from a fuel system malfunction, just as a person with HIV or bipolar is more likely to be denied insurance than someone with, say, pre-existing back pain or a cavity.


You're right, of course, that insurance rates go up unfairly when people make fraudulent insurance claims -- say, when someone drives his car into a wall in order to collect insurance benefits. Rates don't go up when the policy is used for what the insurer anticipates it will be used for. As you admit, they have done their math and expect to come out ahead if they charge me $1,800. I don't plan to drive my car into a brick wall, or otherwise cause my car to malfunction.

Thanks, John, for a very helpful post. I'll have to check out that web site.

You both might be right that I'd be better off skipping the third-party insurance.

 

What do you mean by "do the fuel gauge setup"?

 

Re: Fuel system appears bad... Should I buy an outside warra

Well, when I pulled out of my parking spot last night, which was on a slight decline, my fuel gauge quickly repaired itself. It suddenly (and correctly) started showing a full tank of gas.

Ironically, I was on my way to a level parking lot to try out the resetting process detailed in Frank's (very helpful!) post.

I attempted the resetting process a few times before it repaired itself, and was unable to get the odomedter to display the fuel gauge settings, as described in the TSB. I don't know why. I tried several times.

So the third-party insurer may be safe from my claim. They might also be without my business altogether, thanks in part to the unanimous skepticism of this group.

But my Prius technician told me I should bring the car if it does this again, as some computer programming or a new "floater" sensor may be in order.

Anyone have any experience with this problem that would be instructive? Or know why my 2001 Prius didn't seem to want to reset the gauge? (Perhaps I just wasn't getting hte timing of the button pressing and depressing right.)

In any case, many thanks to those of you who provided me with constructive advice and historical data on third party warranters. That's exactly what I'd hoped for when I made my post...

 

Dan writes:

"About the fraud issue, you may have been legally and possibly ethically in the clear, but I don't believe morally you were. Its kind of like knowing the winning lottery numbers, and then buying a winning ticket. But it may be that the extended warranty company is allowing pre-existing conditions, with the hope that the needed repair is minor and not expensive. After all, $1800 is substantial, and they still win if they have to shell out, say, $600. They'd probably cry foul if you had a bad inverter."

Exactly... If I were a third-party warranty company, I'd be inclined to accept a customer who said to me: "You can have my business if you cover a fuel system malfunction that just happened yesterday. If you refuse to cover this simply because it happened yesterday, it's not worth it to me to buy the warranty."

After all, as I allued to in my first post, fuel system problems are among of the most common problems with 1st generation Prii. If the warranty company is worth its salt, its people have read the same Consumer Reports studies I have, and they know around 5% of 2001 Prii had already experienced fuel system problems by 2004. They know to expect more in 2005 and beyond. So why pass up $1,800 simply because a customer wants to be paid for a (say) $600 repair a few days earlier than expected?

The lottery ticket analogy is amusing (though not entirely parallel, I think). Here's another: When I was 19 years old I spent a day working for a telemarketing company that sold ads in magazines. The training supervisor told us new trainees that we should discourage advertisers from putting expiration dates on any coupons that appear in their ads. He said he always asked his clients: "If a customer comes in with a coupon, are you going to turn them away because the expiration date has passed?" Usually, he said, these clients answered "no, we wouldn't turn them away." Most of them deep-sixed the expiration dates.

Why let chronology prevent you from taking the business of a paying customer?

Still, as I've said, it would be different if the company asked me whether there were any problems and I said "no." Then there's clearly a moral and ethical (and I'm not sure I see the distinction you're drawing between those two adjectives, Dan) case to be made against me.

Thanks for your help with the tech issues, Dan.