Lower Price or Lifetime Warranty?
 

I need your advice and opinions. Here is the basic question up front:

Would you rather buy a new Monogram from dealer A (local) for $1,100 off the MSRP, or buy a new Monogram from dealer B (2 hours away) for MSRP with a Lifetime Warranty?

More details:
The cheaper price is due to the sales guy at dealer A writing down the price for the MT when I ordered the AT back in January. The sales manager said he would honor the price. This dealer has changed the delivery dates multiple times and has sometimes been less than communicative regarding the delays. I'm on the fourth set of dates, which is this coming Monday or Tuesday.

The Lifetime Warranty is a third party warranty that dealer B includes with all new cars from their lot. It is the exact same as the regular Scion powertrain warranty, but it is good for as long as I own the car. It has a $100 deductible for each repair, but covers parts and labor. I do not plan on making mods that would void any warranty, and I plan on keeping this car as my daily driver for at least 10 years. His Monogram should arrive next week as well.

I asked dealer B if he would match the lower price, but he said he cannot.

What would you do, and why? :iono:

I'd go lower price. Simply because you get a guarantee of this benefit.

The lifetime warranty, you really really have to scrutinize the conditions and have to trust this 3rd party to actually be around by the time you actually have to use it. If this was Toyota offering say a free extended warranty, you're pretty sure Toyota would be around in 10 years. You can't say the same for a 3rd party warranty company. Then there's the issue of coverage...you have to look at the conditions to see what they can and cannot deny a repair for. Hence why I'd turn this offer down.

If you're that interested in that extended warranty go back to dealer A and negotiate heavily on a Toyota extended warranty and you will end up at best a slightly reduced price off the car with a free extended warranty or at worse a extended warranty at a reduced rate than normal.

I opted for lower price. I'm a pretty good wrench and I have connections for Toyota parts at a nice discount.

Just to have all the facts on the table...

They said the warranty is from Virginia Casualty, the same company that writes warranties for Best Buy and other companies. They are a AAA rated company with a long history.

Thanks for the feedback so far! :thanks:

I'd go with the warranty…you won't find ANY extended warranty for $1100…and working as an ASM at Toyota I've seen the extended warranties come in the clutch many, MANY times.

As stated above make sure you're 1000% sure of the terms and conditions of the warranty (I'd even have a lawyer read it) to make sure you know what's covered and what is specifically excluded. They like to do these "full powertrain" warranties but a lot of them don't cover new parts or complete assemblies:

Ex: Your second gear synchro explodes. Your factory 5/60 power train warranty replaces the transmission. Your extended warranty replaces the second gear synchro.

Ex2: You get a hole in your block. 5/60 warranty replaces entire short block assembly. Extended warranty sends the repair shop a low-mileage junkyard engine and pays them to install it.

Make sure you understand what you're getting and if it's got good coverage, take it!

Thanks everyone. I emailed dealer B to see if they can send me a copy of the warranty for review. If so, I'll post it here for you guys to see as we'll!

Ok, dealer B won't have an electronic version of the warranty until Monday. I had asked him about new vs. refurbished parts, and this was his reply:

"I can tell you that the parts used to repair the car can be either new or rebuilt at the discretion of the warranty company. That is the case in all warranties after the initial factory warranties have expired. When the warranty company does use remanufactured parts they are also under warranty. It does the warranty company no good to fix your car and then have to fix it again because they used a faulty part."

This makes sense to me, but it still doesn't help me decide which option is better... Ugh!

And for the record, my history of mechanical work on cars doesn't extend much further than changing bulbs, checking fluid levels, and driving it to the repair shop when needed.

Pretty typical but still read the entire thing. It is true they don't want comebacks, but they also are a BUSINESS and will not spend a dime more than they need to.

Until I get the full warranty, this is what their website states (this is for all the cars they sell, so some items obviously don't apply):

DETAILS OF COVERAGE The components covered will be the exact same as the Factory "Powertrain" Warranty and including: 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 & Trans-axle: 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.
Rear Wheel Drive System: Axle housing & all internal parts, propeller shaft, u-joints, axle shaft, drive shaft, bearings, supports, seals and gaskets.

Extended warrenty are usually not worth the price. If you get some shitty engine problem out of the scion warrenty you will still have to pay a diagnostic price (at full labor rate per hour), ask about that too. Add the 100$ deductible and you're already seeing how an extended warrenty isn't always a great idea.

However if it is truely a "lifetime warrenty" and you keep the car for 20 years, you will/may benefit from it.

Most dealerships will NOT charge you a diagnostic fee for covered repairs. Of course it's up to the repair shop, so something you'll have to clear with your advisor before the repair is to be done.

And yes, those things are listed as "covered items" but it's HOW they repair them and with what that is the biggest question.

I've been a Toyota tech since 2004 and spent the last two as an advisor and I have NEVER seen an extended warranty that wasn't worth having, especially for the small amount of extra cash ($1100…which translates to about $4.50 per week).

Seriously, dude?

Extended warranties are EXACTLY like insurance policies. The ONLY way the insurance/warranty company will sell insurance or warranties is if they can make money on them. Which means it is more likely than not that you will not recover the full cost of the extended warranty.

If that were not the case, then the insurance and warranty companies would all be out of business. Instead, what you'll find is that many of them make a LOT of money. As an example, State Farm Insurance's profits were over 3 BILLION dollars in 2012 - because they're charging people a heck of a lot more than they're paying out on claims. Warranty companies are the same.

That's not to say that you shouldn't buy an extended warranty... I had one work out well for me once. If you can negotiate a low enough price on the warranty (which apparently often has a 50% or larger profit margin... and thus can be negotiated), then it might make sense. But I don't normally buy them on anything.

If you've NEVER seen an extended warranty that wasn't worth having, then you haven't talked to the majority of people who bought one and never had a reason to use it or the benefit gained from it was not as valuable as the amount the extended warranty cost.

I'm not a big fan of consumer reports, but here's their take:

"But breathe deep and think this through. The sale of the warranty is a profit item, with the dealership serving as the middle man. The premise is that the customer will not need repairs in excess of the warranty cost, minus profit to the dealership and the warranty plan provider. Since extended service contract pricing is not regulated, dealers charge whatever the market will bear, and a 50-percent cut for sales commissions is not unusual. By contrast, our past research has shown that only 17 percent of your annual premium for auto insurance goes to commissions and other selling expenses. In other words, an extended warranty is usually not in the customer's interest.

If that isn't enough to dissuade you, hear me out. A few years ago, Consumer Reports proved the dubiousness of this pitch by surveying 8,000 owners of five- and six-year-old vehicles that had been covered by extended service plans. Sixty-five percent of those surveyed said they spent significantly more for the contract than they got back in repair-cost savings. Respondents said their extended warranty cost them $1,000 on average while providing an average benefit of $700. That means the average loss was $300. A big reason: 42 percent of extended warranties in our survey were never used, in most cases because the vehicle didn't need repairs or the standard manufacturer's warranty sufficed."

Other thoughts:

http://thefinancebuff.com/buying-a-c...-warranty.html

Which is why I bet against extended warranty. Chances are, I won't need it.