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Hybrid battery insurance/coop.

Discussion in 'Gen 2 Prius Care, Maintenance and Troubleshooting' started by tonymark, May 9, 2014.

  1. tonymark

    tonymark New Member

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    Just got burned with my HV battery failing 19 days after warranty expired with only 78k miles. Got me thinking about a few friends that own Priuses. I visualized a HV battery coop with annual due or one time fee.

    Tell me what you would pay annually(or one time fee) for a free reconditioned battery when your hybrid battery fails.

    There are lots of details to work out. The coop would have an annual fee of $50-125. When your hv battery fails you get a reconditioned one at no charge. You install it or pay a coop tech to drive to your house and install it ($200-$300) or pay your own mechanic to install it. The only warranty is maintaining your membership in the coop. Battery fails again 2 months or 5 years, get another battery at no charge.

    $100/year is way better than shelling out $1500-$2000 for a reconditioned battery from Dorman or competitors.

    Would you join and pay an annual fee? How much? If it was a one time payment, what would you pay? Remember, this does not include installation.
     
  2. JC91006

    JC91006 Senior Member

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    This scenario will never work. And if it did, Dorman is already doing it

    SM-N900P ?
     
  3. tonymark

    tonymark New Member

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    You seem to be knowledgeable about all things Prius, so I respect your opinions. Not really sure on Dorman offering a cooperative battery exchange. A friend went the Dorman route recently and paid $2200 shipped with a core return and had to install it himself. $100/yr coop= $2200 in 22 years(coop covers multiple failures). Please explain how Dorman is doing this. Too many rebuild places to compete with. I am suggesting a crowd/cooperative funded strategy to deal with the Achilles' heal of the Toyota Prius. I say all this while my father-in-law drive a 2001 Prius Gen 1 with 210k miles on original battery all while living in Phoenix, AZ.
     
  4. JC91006

    JC91006 Senior Member

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    The"business" model you are proposing won't work because the cost will be more than $100 per year. Whoever rebuilds these batteries will need to do this as a business and not a hobby. Also the coverage area will be very difficult to work out.

    Dorman already is doing this on what you are suggesting, but it's done with profitably in mind. They have a network of autoshops that can supply the batteries, throughout the United States. Their guarantee is 3 years and they don't provide labor.

    What you are suggesting will be very hard to do. Also the ones that are paying 100 and get their battery replacement early on, there's no incentive to keep paying into the program, they would opt out

    Also you are giving me way too much credit on my knowledge of the prius. I'm just learning like everyone else.

    SM-N900P ?
     
    Merkey likes this.
  5. wjtracy

    wjtracy Senior Member

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    TonyMark- I hear you, and your idea has some merit: believe Leaf is charging $100/month for new battery, so $100/yr sounds good. But I do not think we would pay it....as we are hoping to set the Prius record on battery life. More seriously I do not go for extended warranties...

    My alternate proposal is that non-CARB states unite and demand 150k-mile 10-yr warranty like CARB. That is a decent incentive, give it to all of us!
     
  6. GrumpyCabbie

    GrumpyCabbie Senior Member

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    I've found a way that gives a little headway when you're slightly out of warranty; always get your vehicle serviced by Toyota. Works here in the UK. You support their network and they offer good will outside of warranty (within reason obviously).

    Saying that, maybe you need the hybrid battery health check system that we get here too? Get the car serviced by Toyota and they will warrant the battery upto 10 years UNLIMITED mileage, or if you prefer to service your car elsewhere, they will check the battery every 10k miles/12 months (whichever is sooner) for a fee of £50/$84.

    Maybe Toyota USA could consider something similar?

    uk link: Hybrid Health Check | Toyota UK
     
  7. uart

    uart Senior Member

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    I understand where you're coming from Tony, but I think insurance works better for things that are a large unexpected cost and only effect a small minority of people.

    I know that replacing the traction battery is a fairly large cost, but I don't think it's entirely unexpected. To be honest, I think that if you keep a prius for long enough then there's pretty a good chance you'll eventually need to replace the battery.

    Most people are gonna get at least 8 to 10 years, due to the various warranty levels, so if you put away $200 per year then the vast majority of people will have at least $2000 set aside before anything is needed. (I know that you were one of the unlucky few that only got 8). Honestly I think that this is the best way to deal with it, just expect it to happen and put aside the money.
     
  8. vskid3

    vskid3 Active Member

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    I think of the battery as being comparable to a conventional automatic transmission as far as cost to repair/replace and average life. So unless your other car choice would be a car with a solid transmission (most likely a manual), the battery isn't adding any more risk. And that's not even factoring in the difference in fuel costs between the Prius and whatever other car you would have bought instead.
     
  9. Patrick Wong

    Patrick Wong DIY Enthusiast

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    "I think of the battery as being comparable to a conventional automatic transmission as far as cost to repair/replace and average life. So unless your other car choice would be a car with a solid transmission (most likely a manual), the battery isn't adding any more risk."

    I don't understand this thinking. Have you overlooked the fact that the Prius has a transaxle with two motor-generators, which have been known to fail from time to time? If the transaxle does fail, your choices are to have your local Toyota dealer install a new transaxle for ~$5K, or find an independent to install a used part from a salvage yard and hope for the best.

    Regarding the OP's original question, I think the concept is flawed in several ways:

    1. The yearly price would have to be substantially greater than $100, probably double that or more.
    2. How would you force subscribers to continue their annual payments from the time the car is new to the time that the car is sold? (The US Affordable Care Act addresses a similar issue by requiring all residents to purchase health insurance or suffer a federal income tax penalty.)
    3. If this is a voluntary program, how would you account for the likelihood that interested buyers would be more likely to need a replacement battery vs. an average Prius owner, by 1) driving much more than 10K miles per year, or 2) living in a very hot desert environment, or 3) daily driving the car on mountainous terrain which places great stress on the battery.
    4. The cost of traction battery replacement is low enough that it does not warrant a separate program just for this issue. What about if the transaxle or gasoline engine fails? The repair cost for those items is similar or greater.
     
  10. WNY-HYBRID

    WNY-HYBRID Member

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    Or just buy a new battery when you need it
     
  11. Rich12

    Rich12 Member

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    You're screwed when you buy a Prius. Any way you look at it.
     
  12. WNY-HYBRID

    WNY-HYBRID Member

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    How's that?
     
  13. jdenenberg

    jdenenberg EE Professor

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    A new battery from toyota at 150k miles (out of warranty) costs just over $0.02 per mile (a bit less from Dorman). If you don't drive a lot, a Prius is not the car for you as the great MPG only helps with heavy use.

    JeffD
     
  14. WNY-HYBRID

    WNY-HYBRID Member

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    ?



     
  15. tonymark

    tonymark New Member

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    Wow, I didn't realize that this was such a bad idea. Obamacare, really? Okay It's a bad idea I get it. I asked and got an answer. Just to clarify, you don't join the coop until the warranty ends on original battery or you purchase a out of warranty Prius second hand. So you may have $500-$600 in the coop when your battery fails. If you install it yourself, it's not a bad deal. The only warranty is to keep paying the yearly dues.
     
  16. bisco

    bisco cookie crumbler

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    i like it.(y)
     
  17. KhaPhoRa

    KhaPhoRa Member

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    It actually would work. The problem is the numbers. There aren't actuarial tables out there to pull from regarding this, so getting the numbers right would be the hard part.
    At a minimum you'd need to have an idea of the following:
    What is the average age of a members car, what percentage of those will have a battery failure each year, what percentage will drop out each year without suffering a failure, how many cars will go out of service for non hybrid battery issues, what percentage will drop out of the program following a hybrid replacement, etc. if you charge $100 a year and have a 5% claim rate that's $2000 per claim towards a replacement. That's plenty, assuming the 5% is accurate. Assume all of those people don't pay in any more and you'll have to increase the membership the 5% lost plus the rise in failure rate due to the existing members from the previous year still being in the program (this age will eventually level out as people sell or trade in or total their cars, etc) and new members join, plus lost membership due to other reasons. You'd have to account for fraud too (people signing up only after getting the triangle, limping along for 30 days or whatever cool off period you impose).
    It absolutely could work once you get those (and who knows what other factors) variables nailed down. It's insurance, and insurance has been a profitable venture for those who get the numbers right. You can guess and hope and you may bring in way more money needed or not enough. time will reveal the unknown variables as long as the program survives long enough to tease them out. I think it's a potentially great idea.
     
    hybridbear likes this.
  18. JC91006

    JC91006 Senior Member

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    I think the idea of rebuilding the GenII batteries are going to go the way of GenI rebuilding. It won't be recommended in a year or two. The cells/modules/packs being rebuilt will be past it's sell by date, the band-aid repair will cause customers frustration as their car will need another repair in a short time. Yes this concept will have it "warrantied" but who wants to keep breaking down and getting "warranty" replacements? And don't forget the labor is not included.....and the down time is ????

    The rebuilding in the near future will have to be rebuilts using GenIII modules, GenII modules will be very unpredictable as they will most likely come from 2004-2006 failed packs and will be past it's sell by date. And who can guarantee their modules actually come from a GenIII pack? You would have to go by the word of the rebuilder, truthful or not. Most reputable mechanics will not even offer a rebuild but only go with a "new" replacements for GenII to protect the integrity of the repair and integrity of the shops.