Extended Warranty Needed? Cost?

An extended warranty is an insurance policy. In effect, you are gambling that your car will break down in order to hedge your bets. Now, with any gambling, you want to assess risk vs cost. If a horse is a 100 to 1 long shot you don't place a bet on it that only pays 50 to 1 if it wins.

If your financial situation is such that you absolutely cannot afford to pay for out-of-warranty repairs, you might want to buy the insurance (extended warranty). But if your finances are that narrow, you probably should not have bought the car in the first place.

That said, my opinion is that all Toyotas are so reliable, that the extended warranty is a losing bet: the chances that you will need the warranty are too small to justify the cost. This is why most folks recommend against it, except for products with a poor reliability record. Remember that the insurance company selling the extended warranty is in business to make money, and sets its prices accordingly. In the long run, the insurance company (like a casino) will make money, and the consumers (like gamblers) as a collective, will lose money.

So, only buy the policy if an out-of-warranty repair would break you. But read the fine print, because the policy might not cover everything you think it should. The extended warranty is not a manufacturer's warranty. It is an insurance policy that pays off under certain conditions, and in the case of a Toyota, those conditions are rare.

All the above, of course, is just my opinion. But I think Consumer Reports agrees with this.

 

Absolutely, NOT! The chances of it being used on a car like this is zero to none. These cars rarely break down below 100K miles, and that is mostly what the extended warranties run to. Anything over 100K though is where one of those EW's may be good, but where do you find one you can trust.

The way they work is you pay up front for any diagnostics before you even know if the repair is covered. Then if the damage is questionable, you pay for it all upfront and hope to get reimbursed. I only had one warranty actually pay off, that was for a 92 Crown Vic that I bought used, and after two years the fuel pump failed, taking the wiring with it in the trunk. Thankfully that was all covered, and cost me $150 total for towing and deductible. I had one for the Prius from the dealer, due to me not knowing anything about the hybrid system, and found out the next day after buying it that I could get it for under $900. I called the dealer to cancel it, but they did one better by giving it to me for $795, and sending me a check for the balance. When I got rid of the Prius, I canceled the warranty and got back $1400. That was the one and only time I ever made money on a car that I owned. After 56000 miles on the Prius and Camry, neither one was in for any work at all.
If you have the money to spend on it, and wont need it for something else, shop around for one, you don't need to buy it with the car, and if you think that it is a fair price, having it is not a bad thing, you never know if you will need it.