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Extended Warranty?


thedeanobeano
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Evening all.

Long time lurker, first time poster!

My Gen 3 Spirit is just coming up to 60K (it will be two years old this May - so reasonably high mileage)

I enquired at the local dealers on extending the warranty (mine is on the original 60k one)

They have given me the following figures - presumably stock Toyota quotes, including Toyota world coverage etc...

1 yr unlimited £527

2 yr unlimited £780

Now, this is my second Prius (did 50k odd in 18 months in a Gen 2). Although the car is fairly boring, it does tick most boxes - reasonable MPG / auto / comfy.

Two years of warranted motoring would see another 80K miles on the clock (ie up to 140k)

It seems like a no brainer to take up, assuming I will keep the car.

What do you think?

Havnt tried Warranty Direct yet, but would think they wouldn't do a two year policy, and when the first year is up (and mileage is c100k) the cover with them may drop...

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Hi Warranty Direct will only cover you for all but the Hybrid side of the car at about £350 per year if you go for the Toyota warranty you have to have it serviced by a Toyota dealer which is strange because for the first 3 years you only have to have it serviced to Toyota standards (jobs for the boys)

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Because you do a high mileage and from what you say you are more than likely to keep the car then the extended warranty looks good value.

However, what if you did a P/X for a second hand low mileage Gen 3. which still had some years warranty left on it would that be something you may consider!!!

Toyota warranties I am informed are the best. I would only let Toyota dealers service my Gen 3.

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There is a thread here where Toyota extended warranty vs third party extended warranty was discussed. One of the things mentioned was that with the Toyota product, you get the original Toyota warranty extended. So you can still get rattles, funny noises, etc. looked at and fixed. With a third party warranty, you usually have to wait for a part to fail before it can be replaced.

My gen3 will be 3 this year and it has the 3 year warranty :( so will be looking at the 2yr extended option.

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Everything is negotiable when buying a new car, especially the extended warranty. The price they quote is not etched in stone. A smart buyer can get them to lower their price by as much as 50%, and believe me, they are still making a hefty profit.

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Everything is negotiable when buying a new car, especially the extended warranty. The price they quote is not etched in stone. A smart buyer can get them to lower their price by as much as 50%, and believe me, they are still making a hefty profit.

Where did you dream up that little gem? Sorry but that is a load of nonsense, ive worked in the motor trade for 36 years and have NEVER seen ANY warranty product with anything near 50% or more markup. It is that sort of comment that makes people believe they are being stitched up, they read it, they take it for the truth, but in fact, it is completely wrong

The Toyota extended warranty is just that, an extention of the manufacturers warranty. You will not get anything like the same level of cover with a third party, and probably wont be able to get the Hybrid side of things covered at all

Kingo :thumbsup:

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You could try and negotiate with your dealer saying you feel short changed because you invested in their product shortly before they increased the warranty to 5 years/100,000 miles.

See if you can shave a couple hundred quid off. I can't go into details but I wasn't quoted anything like what you're paying for your extended Toyota warranty.

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Everything is negotiable when buying a new car, especially the extended warranty. The price they quote is not etched in stone. A smart buyer can get them to lower their price by as much as 50%, and believe me, they are still making a hefty profit.

Where did you dream up that little gem? Sorry but that is a load of nonsense, ive worked in the motor trade for 36 years and have NEVER seen ANY warranty product with anything near 50% or more markup. It is that sort of comment that makes people believe they are being stitched up, they read it, they take it for the truth, but in fact, it is completely wrong

The Toyota extended warranty is just that, an extention of the manufacturers warranty. You will not get anything like the same level of cover with a third party, and probably wont be able to get the Hybrid side of things covered at all

Kingo :thumbsup:

Whilst I don't know what the dealer markup is. The cost of the warranty does seem very expensive to me. and it makes me think someone is making a lot of money on that warranty. So why is it so expensive?

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Whilst I don't know what the dealer markup is. The cost of the warranty does seem very expensive to me. and it makes me think someone is making a lot of money on that warranty. So why is it so expensive?

Because a 'cheaper' third party warranty won't give you as much cover as a full Toyota warranty. Also when a third party warranty company carries out repairs they won't use original Toyota parts. The 'cheaper' third party warranty isn't the value it seems. As with anything else, you get what you pay for.

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Whilst I don't know what the dealer markup is. The cost of the warranty does seem very expensive to me. and it makes me think someone is making a lot of money on that warranty. So why is it so expensive?

Because a 'cheaper' third party warranty won't give you as much cover as a full Toyota warranty. Also when a third party warranty company carries out repairs they won't use original Toyota parts. The 'cheaper' third party warranty isn't the value it seems. As with anything else, you get what you pay for.

Sorry, badly phrased question, I wasn't comparing it against another warranty. In and of itself it seems very expensive to me.

The Toyota warranty, is as I understand it, an insurance product. It only needs to pay out if the purchaser has a warranty claim, the premium is supposed to be spread out amongst all the people purchasing that warranty. So why for a single year does it cost between 500-600 quid?

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It is more expensive because it covers a ton more than a third party insurance policy does. You cannot compare for one minute the level of cover between a third party off the peg warranty and the extended warranty.

Kingo :thumbsup:

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The Toyota warranty, is as I understand it, an insurance product. It only needs to pay out if the purchaser has a warranty claim, the premium is supposed to be spread out amongst all the people purchasing that warranty. So why for a single year does it cost between 500-600 quid?

You could ask the same question of your car insurance company. The premium is based on the risk, plus the profit. It is NOT the dealer that makes profit on these products, apart from a small commission for doing so. The dealer wants you to have an extended warranty because it ties in the customer to the dealer network for service and repair work

Kingo :thumbsup:

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And if you've had the car serviced at a Toyota main agent they'll probably help you out if something goes wrong outside the warranty period - within reason. Heard many a story of parts being replaced but with you paying labour etc, so it's not full warranty but at least assistance for remaining loyal to the brand.

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And if you've had the car serviced at a Toyota main agent they'll probably help you out if something goes wrong outside the warranty period - within reason. Heard many a story of parts being replaced but with you paying labour etc, so it's not full warranty but at least assistance for remaining loyal to the brand.

That's a valid point. You are much more likely to get sympathy to something out of warranty if you are loyal to the brand and have a full service history, or have had an extended warranty

Kingo :thumbsup:

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The Toyota warranty, is as I understand it, an insurance product. It only needs to pay out if the purchaser has a warranty claim, the premium is supposed to be spread out amongst all the people purchasing that warranty. So why for a single year does it cost between 500-600 quid?

You could ask the same question of your car insurance company. The premium is based on the risk, plus the profit. It is NOT the dealer that makes profit on these products, apart from a small commission for doing so. The dealer wants you to have an extended warranty because it ties in the customer to the dealer network for service and repair work

Kingo :thumbsup:

I do question any insurance. Car insurance is an awkward one, because it is required by law and hence it is easily abused by the whole car business insurance and repair.

I'd say an extended car warranty is more like any other extended warranty that you'd buy for say an electrical appliance. Some of them you are paying so much for the extended warranty that it is cheaper to save the money and just buy a new toaster or whatever when it breaks.

So I guess I am questioning, if the car warranty has become so abused as a money spinning product that it is actually better to put the money aside and pay for the repairs if and when they are required?

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i think it is a tad expensive, especially as Toyotas are supposedly more reliable than most. The Price of the Warranty should be reflected in the reliability. If a manufacturer (or dealer) charges more for an extended warranty then it says to me that they expect to pay out more often.

I had the option of 3 years warranty and 3 years free servicing or 5 years warranty, I chose the free servicing deal, which will save me around £550 over 3 years (2 minors, 1 Major and a brake fluid change). It would seem fair to me to pay around the same, £550, for a two year extended warranty.

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i think it is a tad expensive, especially as Toyotas are supposedly more reliable than most. The Price of the Warranty should be reflected in the reliability. If a manufacturer (or dealer) charges more for an extended warranty then it says to me that they expect to pay out more often.

We are not in charge of the full facts, it's not just about how much is paid out but how much it costs to administer, people to deal with claims handling, systems, underwriters fees bla bla bla, the list goes on and on. The fact that nobody will cover the Hybrid side in an off the peg warranty suggests to me that nobody is prepared to underwrite it, probably because it is very expensive to do so and is reflected in the price of the Toyota policy

Kingo :thumbsup:

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  • 3 weeks later...

Everything is negotiable when buying a new car, especially the extended warranty. The price they quote is not etched in stone. A smart buyer can get them to lower their price by as much as 50%, and believe me, they are still making a hefty profit.

Where did you dream up that little gem? Sorry but that is a load of nonsense, ive worked in the motor trade for 36 years and have NEVER seen ANY warranty product with anything near 50% or more markup. It is that sort of comment that makes people believe they are being stitched up, they read it, they take it for the truth, but in fact, it is completely wrong

The Toyota extended warranty is just that, an extention of the manufacturers warranty. You will not get anything like the same level of cover with a third party, and probably wont be able to get the Hybrid side of things covered at all

Well, Kingo, I didn't dream up anything. Maybe things are a little different on this side of the pond. When I bought my Rav4 from the Toyota dealership here, they offered me the Toyota Platinum Vehicle Service Agreement (8 years/75000 miles/zero deductible) for $1325. I turned them down, so they offered to knock $100 off the price just because they liked me. I told them I was not interested, knowing that I could buy it anytime in the future before my factory 3 year/36000 mile warranty expired.

Fast forward 35 months--I found a Toyota dealership in Kansas that sells the Toyota warranties at a discount. That same Toyota Platinum VSA that was originally offered to me for $1325 was now $659 from Midwest Toyota in Kansas. That is the total price, no taxes or fees, so I bought it. And you can bet Midwest is making a nice profit, otherwise it would not be worth their time. After a fortnight, I recieved the warranty packet from Toyota, NOT the dealership. So it is a legitimate Toyota factory warranty honored at any Toyota dealer in the US and Canada. I'm covered until November 2016 and don't have to pay any deductible for repairs.

Here's the Toyota website that shows the pricing for all models:

http://www.toyotafin...ProtectionPlan#

Incidentally, I heard from another RAV owner who talked to Toyota to cancel the warranty the dealer sold and mentioned he was buying it from Midwest and the price he was quoted. The lady from Toyota mentioned that the price was only $100 over dealer cost. He cancelled the 6 year/100,000 mile warranty that cost him $1450 and replaced it with the identical warranty for $689 from Midwest. That means that Toyota charges the dealer about $589 and they try to sell it for an $861 profit!

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I have no idea how it works in the States, it most certainly does NOT work that way in Europe. I find it very strange that a warranty policy costing very little in comparison to the cost of a car, potentially has more profit in it!!!

Why does the Mid West dealer only sell his product to make $100? There is more to this than meets the eye, perhaps he subsidises the product to "buy" your data and future business

As I said before, Ive worked in this job all my life and have never seen that level of profit in a manufacturers product

Kingo :thumbsup:

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Out of interest, what's the current price on an extended warranty (on a Prius) over here, will it increase in the new financial year? There used to be links on the Toyota website, but they've all been replaced by an 0844 number/dealer query. I'll be looking at getting one at the end of the year.

Thanks

valmiki

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