Should I buy the extended warranty?

Please read this before getting into an extended warranty:

Read this report on dealers and extended warranties. The report is somewhat dated, 2003, but I assure you nothing has changed in the methods and practices of dealerships and the warranty companies since then.

 

Just curious though....since I posted my pic...with the contract clearly stating that you would get a full refund minus $50 for processing... I can't see why you wouldnt just pay out of pocket for most claims....and wait for that one time where the damage exceeds the warranty purchase where at that point a claim would be ideal.... otherwise if its not covered you would just pay out of pocket (which you would have done without buying the policy). I understand the script about this and that..i just dont see why you wouldnt just have this in the back pocket until that one time where its needed or when 7 years pass you just lose out on $50. Am I looking at this whole situation properly? It makes sense in my head but maybe I'm missing something that you are seeing.

 

Yeah, I saw your pic and actually have my own copy of that exact contract I believe. It does state that you'll get a full refund if you don't use it. But, they try to trip you up... you have to get a notarized mileage statement somewhere, and have to go back to the dealership where you got it, and have to mail them a claim form, all within a 30 day window. Oh, and the contract covers the vehicle starting from it's manufacture date BTW so be careful not to miss the end of the contract... Further, please read the article I sited in my prior post here because many many people have complained about doing everything correctly and simply being ignored and not paid on claims and other terms related to the contracts.

Personally I'd cash out (I know it's prorated, and since from date of manufacture not purchase they'll screw you) but I'd get away from anything to do with those companies - my opinion is they should be locked up. It's borderline criminal.. but like the article I cited says they exploit loopholes in state laws where they are not considered insurance so are not regulated like insurance companies.

 

mountainwolfpup- solid advice!

fuck salespeople

 

I have a lifetime warranty on engine and powertrain that came with mine for free

Covers:
"Engine: Cylinder block and head and all internal parts, intake manifold, timing gears and gaskets, timing chain/belt and cover, flywheel, valve covers, oil pan, oil pump, engine mounts, turbocharger housing and all internal parts, supercharger housing and all internal parts, engine control computer, water pump, fuel pump, seals and gaskets.
Transmission & Transaxle: Case and all internal parts, torque converter, clutch cover, transmission mounts, transfer case and all internal parts, engine control computer, seals and gaskets.
Front Wheel Drive System: Final drive housing and all internal parts, axle shafts, drive shaft, constant velocity joints, front hub and bearings, seals and gaskets."

 

I'm glad I had my plan. Paid for itself. I don't have 1500 in my pocket for when shit breaks. Find a cool service tech and your good to go

 

I bought the extended warranty when I bought my Vette, and it paid off big time. I had about $4K worth of work done for free. Bought the extended warranty for my Matrix, and when I had some lifter issues, I got a whole new engine out of it. I have mechanical breakdown coverage on my Tacoma through my auto insurance company for a few bucks a month, so I'm covered there.

 

Here's my opinion...NEVER buy an extended warranty(or insurance) that you can afford to pay out of pocket for the repair/fix out of pocket. Ask any actuary and they will tell you the same thing! It is a fact you will be more likely to lose money on these warrenties. Insurance and warranty are multi-billion dollar industries...billions of dollars that customers are LOSING in paying for their services. Sure, some people do make their money back and then some but the majority dont.

Most of the arguments for these type of warranties are very poor in my opinion. "Peace of mind," if you have peace of mind paying more for you truck, then pleace send me $100 bucks for your peace of mind. Or, "one engine failure and it pays for its self." This is true but what is the likelyhood of an engine failure. Emotional arguments for this type of thing are invalid, you have to look at it statistically if your desire is really to save money.

Just to be clear I didn't say you should never buy this insurance, just not if you can afford to pay for it out of pocket. And if you cant afford to repair you vehichle you should probably hold off on buying it.

I would be interested in a poll here on how many people have made their money back on their warranties.

 

Yes, thats 150 dollars over dealer cost on that warranty. dealer usually start out at a 1000.00 over cost. just make sure the ties and wheels you put on are within factory specs. or it could void the warranty.

 

Just , remember. If the only thing influencing you purchase decision on a warranty is the lowest price. you will most likley get what you pay for.
you could have baught a cheaper truck then a Tacoma too, now you made a great choice of vehice and doing everything you can to follow that up with a bad choice on a service contract. and all that will do is sour you on a good thing. Buyer Beware.

 

Good advice, born of wisdom. and not of fear of being "ripped off" for 50-100 dollars on the up front price of a warranty

 

I have made money on warranties. I had a 5500.00 transaxle replaced in my 2005 volkswagen jetta. I piad no deductable due to the disappearing deductable feature.
and as far as the actuarys, the warranty companys make money on New Vehicle Policies. This is due to the fact that that factory is covering most of the life of the first owners coverage. the service contract is more often then not cancelled before it runs out, so exposure is minimal. used vehicle coverage usually runs over 100% claims to income. therefore a loser to the underwriters. but between new and used the average is in the green. if not the warranty co. will pull out of a dealership that isnt placing enough new service contracts.
the story with captive warranties. (factory backed) is a little differant. for instance Toyota will subsidize themselves via factory programs to stay out in round, so to speak.

 

If people waited untill they could afford out of pocket repairs they would never buy a vehicle. most folks are reaching to afford the monthly installment. let an installment and a costly repair. the auto industry wouls close down

 

I say Yes.

 

finally a genius!! with a complete vocabulary

 

Is the warranty worth it? Would you buy the extra 4 years for that $1,050? I have to decide tomorrow (12/10) because I have to finalize the loan papers...

Thanks everyone!!



NO, NO, NO, do not waste a dime on the extended warranty. The math says you will NEVER use it. And this is exactly what the dealer is counting on.

For what its worth...

Good Luck.

 

I dont like the 100% money back contract simply because it promotes not using your warranty. you might pass 3 or 4 oppertunities over 7 years to use the warranty that would have paid you back your investment. but instead paid out of pocket waiting for a major breakdown. and you can always pro-rate and cancel. as far as those co. being criminal, isnt anybody willing to take responsibility for their choices these days. why is everything always someone else fault. I've had people sit in my office and read every line on every form. and thats okay with me, because I believe that its all on the up and up. and in the interest of full diclosure and transparancy, if they want to read let them read. I never in 20 years in the auto business had anyone suggest I falsly represented a product.

 

I did on my '12 because I will have this truck for a very long time. I wanted Toyota's official extended warranty service in case anything goes south on the truck. I don't buy warranties of any time except for my vehicles. I've had it pay for itself on my Ridgeline years ago. Just insurance really.

12Tac

 

When I purchased my used 2011 tacoma DCSB OR I got an extended warranty from the company I financed the truck from and insured it with,.....USAA,......and it was a WAAAYYY cheaper extended warranty then the one offered by dealership. If you really want one shop around! Other legit trustworthy companies also offer extended vehicle warranties.

 

Your personal example is a type of logical fallacy called a hasty generlization.

Like I said, some people may make their money back (or more) but the majority dont. Certainly just because you made your money back doesn't mean all, or even most will. If what you're suggesting is true then the warranty industry wouldn't stay in business, pay their investors, or be able to cover their enormous over head costs of doing business.

Companies are not philarophist, if the are SELLING you a warranty they are doing it to make money on you.