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A clutch is considered a wear item and is not covered under warranty but as a Toyota technician I highly recommend you bitch and complain to corporate and just make sure you are upset over the issue. As for the $1600 goes if you pay it they will most likely charge you about ($750)5-6 hours of labor plus the clutch kit, bearing (guess $400) trans fluid (guess $150) and resurface of the flywheel ($120). So it should be closer to $1420.
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