Quote:
Originally Posted by humfrz
hmmmm.......how does that company make any money ..... ??
humfrz
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Quote:
Originally Posted by FR-Sky
I have no idea dude, you need to ask someone who work at toyota.
I bought it from toyota dealership, and they are offering everyone who purchase the car. They have 3 plans, mine was the cheapest one.
They probably hoping the owner will forget about it, i mean its a pretty long time.
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Quote:
Originally Posted by humfrz
My confusion is about the part where you would get the full refund of the $2,000 after the 8 years, if no warranty work were done.
Yes, they do get to keep your money for 8 years ..... but, that would yield them less that $500 (modest interest, compounded) even if their wasn't any outlay for warranted work.
Maybe that's why I ain't rich ...... 
humfrz |
My wife makes a good portion of her (not small) income from selling extended warranties on RVs. Although most of the people that buy them do end up using them (those things break easy) if they don't use it they also get their money back at the end.
Even if the interest made from them is only $500 that adds up fast when you have many of them. She sells about 500 of them a year. If only half ever collect that is still $125,000 a year in income for the company. Sure they could have made more by not refunding but then they would sell far less in the first place.
The other trick is that if you use it at all you don't get the refund. So if you go in for a warranty repair that involves a $10 part and 15 minutes labour you just paid $2,000 for it since you just lost your refund at the end. Don't worry they make shitloads of money from the extended warranties one way or another.