Extended warranty worth it?

Toyota restricted extended warranty sales now to within your state only. Used to be 1-2 great places to buy the thing on line but sadly that was cutting into some stealership's profits so they complained to Toyota and Toyota caved.

So now I have to check within my state and call around.

FWIW, the warranty I was quoted was $1499 for the 'platinum' warranty. Thats the only one they sell. I cant recall the terms, perhaps 7/100 or something. Dealer cost was $678 on this.

While its not practical to think we will pay cost on this...$100 profit to the dealer should suffice. I also dont see that happening.
If I can get the warranty for say $900-1000 i'm in.....otherwise that money is likely better put in the bank for now.

They always try to ROLL these into your loan and if your not paying 0% -well then this costs even more!

 

Mine was 7/100,000 for $1200 and in the end I hope it was a waste of money. At the time it didn't seem so bad, I'm still good with it. The dealer can thank TW for that sale.

 

I'll throw in my take....i chose to get the extended warranty, basically to cover anything that happens while I am still making payments on it. I plan on keeping the truck for as long as possible, and money going towards payments is money that can't be saved for repairs. once it is paid off, then i will have extra money to afford any repairs. I have the 7/125k platinum if i remember correctly. however I have absolutely no problems with mine, I'm lovin' it.

 

Yeah interest in this day and age. Ha , good one man. Sick compounding on 0.75 interest rate (if you are lucky) over 7 years. Nice try. And dont even bring up the he could have invested the difference, because in theory that sounds great, but most do not invest in the market, and if they do they will be lucky to get 10% in this day and age.

 

I know its not the popular decision, but I always pay the money to have peace of mind. Everyone's circumstances are different though, so you have to gauge cost and risk for yourself. Just ask yourself, "If I had to do a 2000-3000 dollar repair out of pocket, would it cripple me?" For me the answer was yes when I bought my current truck, so I spent the thousand dollars on the 6y/100k warranty.

It is also a pre-owned manual 6 speed, so lord knows how the previous owner treated the transmission. He might have spent the first year grinding the hell out of it. Now I have 3 more years of no headache or worry. Worth it to me.

 

Yeah, Troy and Jerry were the best for prices....dealers musta hated their @zzes

 

You can't get more than .5% interest today? Try something besides a checking account with interest. My mutual fund has been averaging 8% over the past 20+ years, INCLUDING the big downturns.

you make well over a cool $1000 investing that $2000 for 7 years. But whatever you make, you make ZERO if you give it to the dealer, unless you use it which most do not. Dealers are NOT offering this out of the goodness of their heart.

"there is a sucker born every minute." --P.T. Barnum

If a little peace of mind is worth the money, nothing wrong with doing it. But realize that it IS throwing good money away, almost all of the time.

 

Investing in the long run you'll earn great returns (hopefully). But for a 5-7 year horizon, returns aren't guaranteed, easy to quote returns over 20+ years like you did( which isnt applicable to this conversation because who owns a car/truck with an extended warranty for 20 years).

Ask the guy that invested in 2000 how his returns looked 5 years later, he took a 30% bath.

 

Last time I looked, returns are not guaranteed ANYWHERE except in simple interest-bearing checking/savings accounts and certificates of deposit.

I just did a quick check of the graph of my mutual fund. Over the past 5 7 and 9 year periods (separately computed, but overlapping obviously) the rate of return has been above 8%. If you sampled right at the last downturn, no. But I didn't panic and sell and it came right back as if nothing had ever happened... And the thing is, it would STILL be compounding at 8% since I would not remove the money after the "extended warranty period" was over. And the protection against failure keeps climbing from that point on.

That "30% bath" is only possible when (a) you have to use the warranty early in the life-cycle, or else extract the money from your mutual fund, which is the uncommon condition.

 

Just to update everyone on Toyota's extended warranties, Toyota had place a ban on any dealership to sell warranties out of state. You can still buy from any dealership from your state but from what I have seen so far, the better priced ones are coming from out of the east coast.

You can however purchase the warranty from any state if you do it in dealership - just in case you happen to be visiting that state.

 

If Toyota hadn't banned out of state sales, I'd already have the policy cause I'd have it for well under $1k.

$1k and beyond I am having an issue with when dealer cost is $678 for a 7/100 policy here. Charging $1500 like they tried to do with me is a dam joke. I'm all for making profit per say but geez. ......If I can get this for $850 I would possibly consider purchase of the policy. Not a dime more. It's not worth it.

Of course we can ALWAYS purchase this policy anytime within the 3/36 factory warranty. So maybe see how it goes with the Taco over the next few years and then if its acting up and you WANT to keep the truck, then explore purchasing. At the moment, thats what I am planning on doing...We have time.

Remember, less than 39% of people that buy Honda and Toyota extended warranties actually USE them.
(USA Today)

 

If you have a 2012+, it seems like a good idea to purchase. The secondary air injection system fails as early as 7K miles and 75K miles and cost about $1k for just parts. Dealers are charging between $1,700-$1,900 to fix. Mine failed at 7,800 miles but was luckily covered by the 3yr/36k but after that you will be on your own and seems like this part is prone to failure.

 

REMEMBER NEW POWERTRAIN THAT ALREADY IS HAVING TEETHING ISSUES (REAR DIF, LOW FLUID, ETC.) Toyota of today is not the Toyota's I owned in HS and college.

 

I have seen platinum warranty's for 7/75K instead of 7/100K. Just a different option and pricing structure ?

 

I guess, some speculate they know dealer cost. Haven't seen anything yet.

 

We wont know whether or not the extended warrenty is worth the money or not until these trucks are 3 years old. But rest assured if it is necessary 3 years from now you can bet the price of extended warrenties are going to go way up. I bought the 8 year 125,000 mile warrenty. No truck lasts forever but i keep mine over 12 years or so. Divide the expense over the extra 5 years and its peanuts compared to the money you already sunk in to the purchase price.

 

Exactly I bought a 6 year/125000 for $1200, for me its worth the peace of mind of not having to worry about shit for the next 6 years/125000 miles.

 

Just trying to educate folks.

"good decisions come from experience. Experience comes from bad decisions."

"A civilized man learns from his mistakes. A wise man learns from the mistakes of others."

Etc...

 

The dealer wins TWICE.

First he makes a huge profit on selling the contract. Then the dealer makes another big profit when he does the repairs that the insurance company actually pays for. Double-dippers...

How can they NOT like to sell them?

 

I've never bought an extended warranty for any vehicle I've purchased, but given this is a "redesigned" model and the first year I opted for the 7/100k warranty. Haggled them down pretty low, and given the issues many are having I've decided to keep the warranty. Cheap insurance, but the other part of me is thinking I'll ditch the truck just before the 100k warranty expires because I really don't have faith in Toyota and will probably go back to Subaru. Live and learn I guess!