Help out of manufacturer warranty!!!

There is another thread in here that discusses extended warranties, I think the title was "Did I get taken."

You are not a dumb nice person [or you are at least lucky that you have yet to lose $2000 or so for one of those worthless pieces of paper.]

Most consumer advocates and lawyers opine that those warranties are worthless. Save your money, especially on as good a car as the Toyota is. [Did you know that in some states those extended warranties are outlawed? That's how bad they are.]

The April 2008 Consumer Reports Annual Auto Issue included an article on those warranties. Bottom line in the article, DON'T WASTE YOUR MONEY.

I have dealt with those warranties a few times as a lawyer. Got people their money back and on one had to threaten a suit against the company who did not want to pay the claim.

The ONLY warranty that might be worth the money if it's a true extended warranty FROM THE MANUFACTURER. But those are rarely offered nowadays. Be careful because many salesmen will LIE or MISLEAD and say that it is a manufacturer's warranty when in fact it is not. It's a third party company [most of the time a fly by night company who will go bankrupt or rarely pay on claims due to fine print in the contract that no one reads.]

I have the Consumer Reports article and I put it on my server. You can download it here. The decision is yours if you want to purchase a warranty. IMHO the odds are 1,000,000 to one that you will have to make a claim with a Prius and if you do, the claim won't be covered or the cost won't exceed what you paid for the supposed warranty.

http://www.heartinsanfrancisco.com/ExtendedWarranties.pdf

 

Any analysis of the value of an extended warranty that fails to mention risk aversion is most likely too simple minded to be of any use to anyone.

That's simply not true. Just about everyone who buys a new car is offered an extended warranty backed by the manufacturer of the vehicle. I've bought ten cars in the last ten years, and for the ones I bought new, the extended warranty the finance guys were pushing were always those of the vehicle manufacturer.

The only extended warranty you should ever consider for a Prius is the Toyota Extra Care Platinum warranty for the $990 price you can get with your priuschat.com discount. There have been a few well-publicized instances of issuers of third-party extended warranties that went out of business and left their policy holders high and dry. All of them offered their policies for sale through a web presence.

Somebody just posted within the past day about a covered repair that was greater than the cost of the warranty. Good thing you're an ambulance chaser and not an actuary.

When you purchase an extended warranty you are basically purchasing insurance. Therefore your risk aversion is a major consideration. It's not a decision based solely on expected value. If insurance purchasing decisions were based only on expected value, no one would ever insure anything. I can't afford to be sued for $3M if some kid climbs my two fences and manages to drown himself in my swimming pool, so I pay $400 or so every year for my umbrella policy. I can afford an expensive repair to my Prius in the unlikely event that it requires one, so I don't have an extended warranty for my Prius, or for any other car I've ever purchased.

It should be obvious that the average claim for an extended warranty is far less than the cost of the warranty, even when they are available for minimal markup, like the $990 one mentioned before. Let's say the average payout is $500. Consider the following two options:

1) A sure loss of $1000

2) A 90% chance of losing nothing, a 10% chance of losing $5000.

Which would you choose? A person with high risk aversion (perhaps due to finances not able to absorb a $5000 repair bill) would choose the sure loss of $1000, even though the expected value of option #2 is -$500, which is $500 better than the -$1000 expected value of option #1. A person who has no risk aversion at the $5000 level will make his decision based only on expected value and choose option #2. In case it isn't obvious, #1 is buying the extended warranty, #2 is keeping your money and taking your chances that your vehicle will exhibit typical Toyota Prius reliability and not require an expensive repair.

I guess you were absent the day they taught copyright law.

 

My opinion for what it's worth is you haven't lost at all.
If you feel you need a warranty because you have owned car from other manufacturers which needed repairs within the first 5 or 6 years of their life then the extended warranty might have some value however you have a Toyota.

Maybe you can still get the extended warranty, try the forum shop?

 

In CA, it is illegal to sell 3rd party ext warranty UNLESS it is sold thru a dealership.
Some people might mistake whatever ext warranty the salesman sells as the OE warranty.
When my friend bought Sienna from nearby Toyota dealership, it happened. I told him to go to
Troy. He finally got the salesman to sell him the OE warranty for near Troy's price. What can I say?

Back when I owned my BMW (sold recently), I bought 9yr/100K warranty to cover the 5yr/50K miles after OE warranty. Within 3 yrs, I got my money's worth back and still had two years to go.
Well, that was BMW with poor reliability. Last time I check a Lexus LS ext warranty cost is not $0, but about 50% of a BMW 5-series or 7-series. That tells you that all vehicles break down. It is a matter of probability or frequency. An article published in Europe in 2005 indicating that Toyota has a repair rate of about 15% during ext warranty period. Mazda was #1 at 8% while Honda at 9%. Note that the survey did not cover full line of vehicles. For Mazda, it only covered Mazda6 and Miata. So data could be a bit skewed, but you get the idea.

Back to OP's question, if you are out of OE warranty, I suggest you call Troy on his phone and
see whatever steps you can take to buy ext warranty. Sometimes, a pre-purchase checkup suffices.

As for ext warranty, as priusenvy put very well, it is a matter of financial planning. Statistically, you lose money on medical insurance also, why get yourself covered? To each his/her own. As long as one makes an educated decision....

 

I'll also add that if you believe the expected cost of repairs during the extended warranty period exceeds the cost of the extended warranty, you should really think twice about buying a car that unreliable.

Buying the extended warranty should be about reducing your risk. If you can justify the purchase based on expected value alone, that's probably not a car you want to be buying. Well, that's just me. Maybe others find some cars so desirable that they're willing to put up with all their problems (Lotus == Lots Of Trouble Usually Serious).

 

Just really bad advice. With the extremely reasonable price factory warranties are offered through this site and, given the technical complexity of the Prius, one significant component (otherwise uncovered) repair will justify the expense. $2K I would think about it, less than $1K...a no brainer.