extended warranty, yes or no?

[frank]

I ordered a 2023 rav4 xle hybrid. it comes with a 36 month, 36000 mi; bumper to bumper warranty. it has a separate factory warranty of 50k miles on the drivetrain and 10 yrs or 150000 miles on the hybrid system. I asked about extending the original bumper to bumper, they told me 1700. to extend the bumper to bumper to 10 yrs or 125k miles. does that sound like something that would be a good investment?

 

[Car-Guy]

I bought an extended warranty a few times on a couple of expensive high performance cars. Never needed any warranty work on any of them. How some of these vehicles can "hold up" with the power/performance they generate amazes me. But for my "regular vehicles", no extended warranty is needed, IMO.

YMMV

 

[COcheesehead]

The only things I have ever had to repair or replace on any of my cars over the last 30 years would not have been covered under warranty. Personally I do not buy any extended warranties. I think they are just another profit center for the companies involved.

 

[HawkeyeNFO]

NO

 

[wmc1000]

My answer somewhat depends on how much you drive and how long you would actually keep the vehicle. As an example DW and I bought a used 2011 Honda CR-V EX-L with 40K on it in 2014 and did get an extended 8yr/120k mile warranty for about the same price on it as I thought being an AWD model there were additional expensive things that could go wrong. During 9 years of ownership the only thing I consider to be non-routine that we had done was a transmission flush because it didn't want to downshift early enough to prevent the engine "bogging down" around 40 mph when going up an incline. $60 to have that done and over 9 years had no other issues. Did I regret paying the $1700, no because it was peace of mind insurance.

An extended warranty is not an investment IMHO just a bet that it may save you money IF you get a vehicle that develops some problems.

Also, is it a true bumper to bumper warranty extension that covers items other than mechanical, such as a rattle, etc.

 

[38Chevy454]

I never buy extended warranties. It is basically prepaying for unknown repairs that probably will not happen. If your vehicle has a real problem, it will show up in the mfr warranty period. Extended warranties can also have lots of gotchas in the fine print to avoid paying out. I avoid all of that by not having them and if a problem does occur I am not bale to fix myself, I just have to pay for it; using that money I saved by not buying the extended warranty.

 

[NewEnglander]

no need for an extended warranty especially for a Toyota, total waste of $

 

[Chuckanut]

According to Clark Howard extended warranties return about 8% of their cost to the purchasers in the form of covered expenses. They are a huge profit center.

If you do get the extended warranty, make sure it is the one from Toyota. 3rd party warranties aren’t worth the paper they are printed on in my opinion. Also you can shop for the extended warranties just like you shop for tires and seat covers. There are dealers who often sell them at a discount to any owner who wants one even after purchase of the car. Again make sure it is from the car manufacturer, not some 3rd party. Like I said, they are a huge profit center.

 

[ivinsfan]

We're considering buying one on the Escape Hybrid we bought in Dec 20 for a couple of reasons. Reason one during Covid we put very few miles on it and we can price a warranty directly thru a Ford dealer on-line with a targeted miles/years on it. This situation is a one-off for us. It will also dramatically lower the cost.



Second the electronics in this car are pretty complicated and who knows if/when they might act up. 3rd reason this car is a hybrid and with all the new laws and regulations coming online we might continue to drive it for a very long time. It's a perfect solution for someone who lives in the North country out in the country who will never be comfortable going full hybrid.

 

[OldShooter]

... Second the electronics in this car are pretty complicated and who knows if/when they might act up. ...

Actually, the insurance companies know with high statistical accuracy and the costs are priced into the insurance policies. To refine the point, they know better than you do.

Extended warranties are often the highest profit product that any dealer sells. A few years ago Best Buy's entire year profit was approximately equal to their profits selling extended warranties. That is why the saleskid pushes them so hard. Same-o with car dealers. You can see this anecdotally in this thread -- few people make claims.

If you just have to buy one, negotiate hard on the price. I would start at half the offered price and make it clear that I know I can buy the warranty lots of places besides the dealership I am talking to. If the salesperson doesn't break off the discussion at least twice to talk to his sales manager you are probably leaving money on the table.

 

[freedomatlast]

No

 

[ivinsfan]

Actually, the insurance companies know with high statistical accuracy and the costs are priced into the insurance policies. To refine the point, they know better than you do.

Extended warranties are often the highest profit product that any dealer sells. A few years ago Best Buy's entire year profit was approximately equal to their profits selling extended warranties. That is why the saleskid pushes them so hard. Same-o with car dealers. You can see this anecdotally in this thread -- few people make claims.

If you just have to buy one, negotiate hard on the price. I would start at half the offered price and make it clear that I know I can buy the warranty lots of places besides the dealership I am talking to. If the salesperson doesn't break off the discussion at least twice to talk to his sales manager you are probably leaving money on the table.

OK I'll play did you actually read my post. you go online plug in ford warranties for your car model and hit enter. Start looking and keep looking find the Ford dealer with the lowest price on the one you want and then bingo. Never buy one while you are buying a new car, never buy one in person from the dealer you bought the car from.


Once you find the lowest price for the product decide how long you want the coverage for..for example electronics as I mentioned we have some electronic systems on our tractors and when they go out it's hell on Earth and expensive to fix. At that point decide if the warranty cost is worth it to you. If the answer is yes, buy it and don't let someone on the internet tell you how dumb you are.

 

[arcyallen]

These are pretty simple to think about: They're insurance products. Like any insurance product, there are a few things to keep in mind:

-They make you feel good when you have them.
-They're bets that you will spend more in repairs than the warranty costs.
-The odds show that ultimately you'll spend more on warranties than repairs

Having said all that, I don't fault anyone for buying one. Just realize you're paying a premium for most any warranty/insurance. I practically never buy any sort of optional insurance. If I factor in ALL the insurance I could have bought (from cars to hotel cancellation, etc) I've come out way ahead. But sometimes the emotional pain of "But what if..." makes people buy them.

To take make it simple and take the emotions out, consider this: My wife and I travel a lot. Probably...30-60 nights in a hotel a year. And a couple weeks on cruises. The "cancel anytime" option usually costs about 10% more. We'd need to use that insurance 10% of time just to break even. How many times have we actually had to cancel?

Zero.

 

[fosterscik]

We're considering buying one on the Escape Hybrid we bought in Dec 20 for a couple of reasons. Reason one during Covid we put very few miles on it and we can price a warranty directly thru a Ford dealer on-line with a targeted miles/years on it. This situation is a one-off for us. It will also dramatically lower the cost.



Second the electronics in this car are pretty complicated and who knows if/when they might act up. 3rd reason this car is a hybrid and with all the new laws and regulations coming online we might continue to drive it for a very long time. It's a perfect solution for someone who lives in the North country out in the country who will never be comfortable going full hybrid.

We've had a ford hybrid for 10 years - a ford C-max. It has the ford sync navigation/radio/CD! center console. We've never had a problem with anything in the car (although it does wear tires easily and it's vital to rotate the tires regularly to avoid excessive rear tire noise problems developing. I'm pretty sure ford uses the same hybrid powertrain in the Escape and I wouldn't worry about reliability issues and wouldn't buy an extended warranty (I never do).
My biggest problem is the expensive to upgrade memory card based navigation mapping database. But with access to apple/google car play in more modern cars that problem has gone away.

 

[pacergal]

I have never bought any extended warranty, especially for our Toyota cars. We have two now, have had 5 total. They are good cars.

 

[latexman]

As I tell the finance person that closes the car deals, "I'm self insured, no extended warrantee".

 

[pb4uski]

...does that sound like something that would be a good investment?

Absolutely, positively no.

1. I have only bought an extended warranty once... my first 4WD SUV as I was hesitant abuut 4WD repairs. Never used it and have had numerous 4WD and AWD vehicles snce then with no problems.

2. When I was working I had a client who wrote extended warranties and they made a bundle of money on them so that $1,700 includes a lot of commission for the seller and profit for the issuer.

3. If you get rid of the vehicle before the extended warranty is expired then that is wasted money.

4. And perhaps most importantly, its a Toyota.

 

[braumeister]

I agree with those who say to never buy a dealer or 3rd party warranty; only get one from the manufacturer if you're going to get one at all.

Personally, I just don't believe in them.

For my anecdote, I'll mention that I recently completed my fifth year with my fairly expensive car, and I added up all the maintenance/service costs I've paid in that time. The total was less than what the cost of an extended warranty/service contract would have been, had I bought one when new. So that confirms to me that I made the right decision.

Nevertheless, I could see that for a very expensive-to-repair, very complex machine, like ivinsfan's tractors for example, it might make sense, provided that you analyze it carefully.

 

[jimbee]

No. It is not an investment at all. I wouldn't buy it.

 

[pb4uski]

Also, today's vehicles are very well built. We have a 2016 Subaru Outback with 90k miles and a 2016 GMC Canyon with 70k miles, bought 6 months apart so we've owned theym both for over 7 years. No repairs at all... just oil and filter changes, tire rotations, cabin and engine air filters, replacement tires, etc. I don't think that we have even done brakes on either of them. Certainly no major repairs though the Subaru seems to need new front wheel bearings.

[Now watch, one of them will break tomorrow and make me look like a fool].

 

[Kings over Queens]

I don't buy extended warranty's, however, the one caveat in this case...Hybrid Electric. That would give me pause, only because the technology is developing. Right?

 

[latexman]

I don't buy extended warranty's, however, the one caveat in this case...Hybrid Electric. That would give me pause, only because the technology is developing. Right?

The first commercial hybrid car, the Toyota Prius, has been developed for 26 years now. It was introduced in Japan in 1997. Developing? Not so much, anymore.

 

[brett]

No. We have had five Toyota products. Never had extended warranty, never wished we had.

The last one, a 97 CamryXLE had 200K miles when we gave it to our son. Never a problem. Same with the other three Toyota products we previously owned. Our 2007 Solara only has 80K miles on it...no issues. Runs like a new car.

We just did the recommended mtce...fluids in particular.

Our 2006 6cyl Accord is the same. Seems to be bullet proof BUT it only has 155K miles on the clock.

 

[Out-to-Lunch]

In general: insure against risks that you cannot afford to bear, and do not insure against risks that you could cover from your own resources. I believe this case falls under the latter.

 

[VanWinkle]

Extended warranties are necessary to "extend" the profit for the dealer. I have bought many cars, both new and used, and have never regretted passing on the extended warranty offers.