Are extended warranties necessary?

You are driving a car generally thought to be reliable. Consumer Reports says extended warranty companies pay out on average 30% of what you pay them. Those are far far worse than casino odds that you'll come out ahead. Casinos pay out around 90% on many games.

Only if you can't handle risk at all and would feel much better if you have some protection. But review the financial health of the company behind the warranty, research their reputation, read the contract and not the sales write up, and good luck.

 

Extended warranties are seldom worth the money that you shell out for them.
You should NOT, EVER buy an extended warranty from anybody but the dealers.
Most of those ads you get in the mail are just rip-off scams.

 

Agree, third party warranties are pretty much worthless. I got one in the mail yesterday and just shredded it with the rest of the junk.

 

it's a philosophical decision. a very reliable car, with a few very expensive systems.

 

If you are really worried about having enough money to cover emergency repairs, get an on line savings account from an on line bank like Capital One 360.

Every month, have $50 deducted from your monthly paycheck.

In a year, you will have $1,200 that you can use toward ANY repair on ANYTHING you own.

An extended warranty is an "insurance policy."

You pay a commission up front and you GAMBLE away your money only to claim a "reward" for a specific item needing repair for only a specific circumstance.

By the third year, you'd have at least $3,600 that is ALL yours. $3,600 will cover most any repair that you'd need on a 3-6 year old Prius.

If NOT, you d still have $3,600. If you bought a three year extended warranty you are left with nothing but a scrap of paper worth nothing.

 

Just note that if such warranties are really 'necessary', i.e. a net positive financial bet for you, then only a warranty from the original manufacturer has any hope of actually being fully honored. Any third party provider must either find ways to deny payment, or go bankrupt.

 

the few times I bought one it didn't cover the problems my cars had!

 

In some cases the dealer made more money off of the extended warranty that they did on the car.

 

There is nothing wrong with the Toyota Extended Warranty, it's the third party one's posed in question by jodypret of post #1.