Extended warranty - Whats the deal?
 

Can someone who's really researched this offer some advice.

Dealers are always really pushy about the extended warranty and they stand to make a lot of money... So naturally I don't trust a thing they say.

What's the deal? Is it worth it? At one point it must be. What circumstances would make an extended warranty a good idea on this car?

It's not worth it.

Dealers are pushy because these warranties represent pure profit for the dealership. The finance manager spent more time trying to sell me the extended warranty than the salesman spent trying to sell me the car.

I'm sure there are scenarios where one may make sense, not for me though (and I suspect for most car buyers)

I purchased one. The reasons being it's a brand new platform including engine and I am fortunate to get extended warranties at a huge discount due to my employment.

I'd advise only to buy manufacturers extended warranty and not third party warranties though.

meh i bought the extended warranty of my tc biggest waste ever. then agian that was a brand new car. when we got a used mazda3 i got the warranty and it paid for its self when shit kept breaking.

Well if your not going to keep the car more than 5 years it's a waste of money to buy a extended warranty.

Let google and your local BBB be your friend and research the company offering you the coverage before buying a extended warranty from them.


[ame="https://www.youtube.com/watch?v=hSSIpcmTKRE"]Extended Warranty For Your Car?: Car Expert by Lauren Fix - YouTube[/ame]

If you're a time traveler from the future, it's worth it.

Also, I believe you can extend the factory warranty if you take the car in before 24k or 24months (whichever comes first). But the factory warranty is pretty good, and if you consider the cost of the warranty vs the cost of likely repairs, its probably not worth it for a new car.

For most it may not be worth it. I bought it for a two main reasons:

1) It is a brand new model, and mine was part of the first shipment at that so it didn't have any chance to get anything corrected from the factory

2) I drive almost 30k miles a year, so my warranty would be up well within 2 years. My 100k will last me about 4.

Combine #2 with #1 and it was worth it for my piece of mind. Plus you can get them relatively cheap considering its all profit, so you can really talk them down on it. Also you can always get a prorated credit if you want to end the extended warranty early as well.

I have only bought an extended warranty one time (it was on a $40K vehicle that had tons of features/options/ electronics and we got the warranty for $680 that extended bumper to bumper from 3 years 36K miles to 6 years, 70k miles). This was the only time I have bought one and have purchased about a dozen cars brand new and it never bit me.

I did not get one for my BRZ. Finance manager pissed me off. He basically told me I was crazy not to get it and made it sound like the car was going to fall apart after the warranty expired.. I countered him by saying "so you are saying Subaru does not make reliable vehicles? Funny, your sales manager kept telling me how reliable Subaru vehicles are..."

He shut up and did not push another thing...

Folks the dealer probably makes more money on warranties, paint protection, fabric guard, etc than they do on the vehicle sale.

I call it snake oil. If a product or a part of a product survives infancy there's a very good chance it is not a faulty part nor has it been installed improperly. Consider that the standard factory warranty of three years far exceeds any period of time that might be considered infancy. If you treat your equipment right and maintain it properly I would say the odds are greatly in your favor. However, if you're from the school that likes to "drive 'em like you stole 'em" then you might find it worth your money.

It operates the way that insurance operates. Essentially they make a statistical and probability analysis. If it shows that the initial price for the warranty is very likely to be far more than the total payout than they offer to insure you. Now, if you are the 1 in 4 or 1 in 10 people that actually needs more warranty work than the policy costs then you are lucky. However, statistically, you are much more likely to be a loser on the deal - just like at the slot machines. However, and here is the caveat, since it is a new vehicle, the reliability of the car is less predictable. It could be that the FR-Z is quite problematic later in its life. In that case, everyone who bought the warranty will be winners. But that is pretty unlikely. Both Toyota and Subaru have a better-than-average track record with new cars.

Another thing to think about is that they will pay out money for repairs over the life of the warranty - while you have to put up the money up front. Therefore you have to calculate the lost value of that money over the x years of the warranty. While they may only have to pay out on the last few years. In that way, they make money (by investing it) and you lose money (lost interest and opportunity for the use of that money) during the period of the warranty. So your real cost is higher than a dollars-to-dollars comparison.

Dealer profit.. That's why they push them so hard.
First they Tell you to buy the car because it's so reliable and dependable. Then when you do sign the papers to buy the car the first thing they tell you is how things can go wrong and how expensive it will be to fix and how you need the warranty.. It's all crap.
If something goes wrong.. It will most likely be cheaper to fix than the premium costs for the warranty.. And if the underwriter for the warranty is still in business when you need it.. You then get to fight about using remanufacturered parts or it not being covered.
Best bet is to take the money that you would use to buy the warranty and either invest in the stock market or put it in the savings account and use it if you have to or save it for your next new car

Think of it like Las Vegas. A bunch of us are meeting there in two weeks. Among our crowd, when playing the tables, there might be a few winners. By far there will be more loosers. ;)

Based on the early problems with this car, which affected me as well, I'd rather the extended warranty.
My confidence in the platform has decreased from 100% to 30% over the last year.

That's why you have a 3 year bumper to bumper warranty and 5 years on the power train.. This is my 3rd scion in the family.. And no warranty issues with any of them..
What early problems do you speak of ? Haven't seen any real issues other than chirping noises from the DI system..

Cam gears replaced... I think that's a real issue.

The Vegas analogy is right on: all insurance makes lots of money for the insurer (even if there are sometimes big payouts). So why buy insurance? Either because you think you're likely to use it so often you get more than you pay (e.g., health insurance if you're old) or because the event it insures against would be ruinously expensive, even if it's highly unlikely (heart transplant, burnt down house, accidentally injuring someone with your car). Never buy insurance (extended warranty) on a toaster. So the question on a car is: is there likely to be a failure during the period of the insurance (warranty) of some part or parts that you couldn't afford to have repaired? For me, my FR-S is a very nice toaster. (Hmmm... toast.)

So here's where I'm at then:

There's a FR-S in the color I want inbound on a boat to Vancouver BC. The Dealer wants a $1000 deposit to secure it. I cna't blame them for that really, they probably don't want to sit on a Hot Lava Fr-S if I back out of the deal.

The problem is, they keep telling me we can go over the extended warranty stuff when I come and sign the final papers. I just feel like if I pay the deposit they might try to rip me off with the extended warranty and other protection plan stuff because I won't be able to walk away without losing 1000 bucks.

Disclaimer --> Advice from my experience. I decided to keep my extended warranty. I could have cancel it within 60 days I believe. After 60 days it would be prorated. I'm not sure if it's the same for Canada. I live in the US.

Just say no to the extend warranty. If you can't. Accept it. Call Toyota Financial if thats the extend insurance you're getting from. Tell them you want to cancel it. They may ask have you talked to your dealer. You answer the dealer isn't cooperating. Then, Toyota Financial will process the claim you filing for a cancel forgot how many days or weeks it was but you will get a full refund but it doesn't go towards you in your pocket but pays off loan

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Anthony

There is no reason to put down a $1000 deposit on this car. That is way too much. Tell them you will give them $250 but make sure it is refundable once you see the car and drive it and decide you don't like it. It is not like the dealer cannot sell or trade these cars, demand is high.

I don't understand what your deposit has to to with teh extended warranty and other protection packages? You realize the dealer cannot make you buy them? You can buy the car without any of that crap. I am always upfront with the finance manager. Before they spend 20 minutes trying to scare me into buying this stuff I tell them upfront I have no interest in any extended warranty or protection packages. I state that there is no point in discussing it since I don't want to waste your time, or my time, but I appreciate that those things are there if I am interested.

Before my car came in I made a $500.00 deposit but the amount of your deposit isn't that important as long as it's clearly written that it's refundable.

I've dealt enough with dealers that I know when the salesman's work is done I get turned over to the F&I (finance and insurance) guy who wants to sell me everything. First I let the salesman know that when he turns me over to the F&I man I don't want any b.s. about extended warranty or anything to do other than the purchase that the salesman and I have agreed on. Usually it works but sometimes I have to remind the F&I guy.

I got an extended warranty and service plan because I actually did the math and ended up way ahead on the service plan, and the warranty really didn't cost much either. I was just in the mood for one, since my last car was kicking my rear end on repair costs. My dealer is also known for being freaking awesome around here, so I guess I wasn't screwed AS hard as I could have been... We'll see.

I got it. Its cheaper to buy it now as opposed to later, and as some of the other posters have said, new car = new problems.

My previous car (S/C tC) had the original warranty, but after the dealer screwed up some stuff, they gave me a 100k mile warranty free of charge. Obviously worth it, since I had warranty repairs happening up to the 90k mile mark. Granted, I didn't pay for it, but it would have been worth it had I purchased it.

Did I waste money? Possibly. But I guess when we start seeing some owners passing the 50k mile mark, we'll know for sure whether or not it was worth it. I have my peace of mind, though.

It is really a personal preference. If you plan on keeping the car 7+ years and want the peace of mind, go for it.

i reaaaally really regret getting the extended warranty but i know the dealer is gonna make it very hard for me to cancel it, or bullshit me and waste my time, is there a way to cancel over the phone lol

Mind sharing the math on that? I'm curious.

why in the world was a 2013 FR-S "kicking your rear" in repair costs?

I purchased one, and am glad that I did. I had the CEL of death and had to have entire engine replaced. Phew.

What???

That would have been covered under the basic manufacturer warranty.

Oh, yeah well. Got it anyways ;p. I don't know all that much about warranties to be honest, but I have the money. So why not..? I don't plan on doing anything extreme to my cars engine to void it.

I figure after 3-5 years I will have mods that will most likely void the warranty anyway, so I skipped it. Plus it's been a long time since I've kept a car past 5 years, I seem to get bored before that, but hopefully not this time -- this car is the one! lol

They can't make you buy that stuff, so you need to gird your loins (as they say). The finance guy has you at the moment you're most attached to the car -- you just bought it -- and he's going to play on your fear and your pride. So when he insinuates that it's going to be stolen (so you should buy his overpriced alarm) remember that's highly unlikely. And when he tells you that most people would consider it throwing away money not to buy extended warranty or the extended maintenance plan, tell him you're OK throwing money away. (When I said that, he looked at me slackjawed. Conversation over.)

I think you mis-read my post there... My car that I was trading in was frustrating me with repairs, so it affected my mood and I guess made me more prone to buy a warranty. Obviously my FR-S is brand new, so it's had no repairs yet. :) When I'm home, I can go back and look at the math, because I don't remember right now exactly what I paid anymore...

I got the extended warranty only because the finance guy knocked my APR down and it ended up costing exactly the same as without the warranty.

I got the warranty because I was concerned about some of the issues some members have been dealing with. In regards to mods some of the toyota dealerships here have worked on supercharged Tundras and such so anything installed by the dealership is still under warranty their product or not. (well that's what i've been told) I can see having the dealership install something turn key like the greddy system or a vortec system. That's all in the future though so it's just baby steps for now.

Another reason I got it is due to the Injector Seals failing on some of the more aggressively/tracked cars some of the owners have. If its failing now for them, I am scared to think when it will fail for us casual users.

I got the extended warranty because while I plan to pay the car off an about 3 years, should I encounter a financial setback and have to make minimum payments for 75 months, I would not want to be making payments on a car that needs repairs. I've had that happen before, and it really sucks.

The reality is, most things that will break on a car due to defect will do so within the first couple of years (first year really) and then they're all covered by the existing manufacturer warranty. If the car makes it through that period without any problems, the chances are very high that it will continue to do so.

Back in the day it was maybe worthwhile, but anymore it really is pure profit for the dealer.

I agree entirely with whaap and dake above.

If it breaks in the first two years or so it'll be under the standard warranty - no big deal.
If it survives the first two years then it has worked as intended and is unlikely to break.
If it breaks after that it's either a wear item that will have to be replaced at whatever interval anyway or a faulty design which will either be recalled or ignored, an "extended warranty" probably wouldn't cover those scenarios.

This has been my experience. Which is why I don't buy extended warranties and never been burned. Extended warranties typically do not cover normal wear and tear items anyway (which usually what costs you money). Brakes, tires, battery, clutch, paint, etc. If you have an issue with the power-train you have a 5year 60K warranty to rely on.

If cars were so unreliable that they started breaking down after 3-5 years or 36-60K miles there would be no such thing as extended warranties, because dealers and warranty providers would be losing their shirts. But hey, if you want the peace of mind, I get it. I would just rather keep the $800-1000 and have it ready to pay for routine repairs/maintenance.

Worked out well for me with a previous car I bought for an ex. Hyundai Tiburon was at 60k miles and the radiator exploded. Literally. Shards of radiator everywhere. :cry:
Warped the hell out of the heads and it needed serious work. Extended warranty fixed all of it, which totaled up to much more than the cost of the warranty.
Then I sold the car and cancelled the warranty and got the prorated refund. :happyanim: