Lower Price or Lifetime Warranty?

[Sphinx]

No question, the lower price. A trick of the trade - once you get close to your factory warranty expiring, call a dozen dealers and have them quote you an extended TOYOTA warranty. The margins on extended warranties are crazy and dealers will often mark them down to get a sale. Personally, I'd never buy a 3rd party car warranty. Too many bad stories out there.

If you buy the extended warranty now, what happens if you decide to ditch the car before the factory warranty expires? You didn't get any benefit of the warranty.

If you listen to a consumer advocate like Clark Howard, extended warranties are incredibly bad investments. I've never spent money on one. I might consider one on a used car that was out of the factory warranty, but it would depend on the car.

[Braces]

Never heard of a life time warranty. Buying additional or extended warranty is wise with EXPENSIVE cars with expensive repairs. Not sure the FRS is in the same category.

[Chattanooga FR-S]

I was willing to pay MSRP for the car. Dealer A is willing to honor the lower price due to a mistake they made. Dealer B offers the warranty on all their new cars. If Dealer A had NOT offered to honor their mistake, it would be a no-brainer, I'd go with the free warranty. But since they ARE honoring the mistake, it kind of makes the warranty cost $1100, right?

I do plan on keeping the car for 10-12 years at least. The car I am giving to my stepson is a 2003 Toyota Matrix that I bought brand new and kept for the past 11 years.

[Jen]

I have been debating the same thing. See if you can find information on people who have tried getting repairs done under the extended warranty offered by this dealer.

From what I have read, you need to have every scheduled maintenance done and have it documented. It may be hard to get a claim paid.

If I find info about claims paid, I'll post it here.

[Buddhalite]

IMO these lifetime "warranties" are nothing more than scams. Chances are it only covers the powertrain and there's likely many things that you can easily do that will void the warranty. Even though oil changes are recommended at 7500 miles this may stipulate that you get it done every 3k. Don't do that and it's voided. You may also be required to only have it serviced at the dealer. Guess what happens if you don't?

[Chattanooga FR-S]

Originally Posted by Buddhalite

IMO these lifetime "warranties" are nothing more than scams. Chances are it only covers the powertrain and there's likely many things that you can easily do that will void the warranty. Even though oil changes are recommended at 7500 miles this may stipulate that you get it done every 3k. Don't do that and it's voided. You may also be required to only have it serviced at the dealer. Guess what happens if you don't?

According to their site (http://www.toyotaofmurfreesboro.com/...-Warranty.html) you only have to follow the manufacturer's maintenance schedule, and you can have service done anywhere. You can also get the repairs done at any licensed service center.

I might call Dealer A on Monday and let them know another dealer is offering a lifetime warranty and I am considering buying from them, then ask if they can add in any extra warranty from Scion. My guess is that they will probably say "We are already knocking $1,100 off the price, so no extras for free!"

[CruiseZen]

Lifetime warranties just aren't worth it if you are someone who always trades their cars in before they are 5 years old.

[Porsche]

Originally Posted by Chattanooga FR-S

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?

What would you do, and why?

Lower price.

All day, every day.

You get it in FULL, and you get it right NOW.

In addition, if you've taken out a loan that is now reduced in consequence, you'll save money on interest over time as well.

I'd take the lower price.

Note that the same thing applies to a choice between a lower interest rate loan or a cash rebate to apply to your purchase. Take the rebate every time. I have never seen such an offer where the loan interest rate reduction saved the buyer meaningfully more than the cash rebate. In fact, most of them are about equal in value. Take the cash rebate because you get it all right now, and no matter what happens with your car and the loan, they cannot take it away from you. On the other hand, if you sell or trade your car before the original loan is fully paid off, you won't realize the full benefit of the lower interest rate. The full benefit of the lower rate is only received when you keep the loan for the full term of 4-8 years, whatever you contracted for. Many buyers do not keep their loans for the full term; they trade in sooner.

Who knows when or whether you'll EVER benefit from the "lifetime" warranty. "A bird in hand is worth two in the bush," or something like that.

By the way, Chattanogga, WHOSE lifetime?

YOUR lifetime? Really?

The components lifetime? If this, then when it breaks, the insurance company will likely tell you, "It lived a full life, and now it's dead. That was it's lifetime." And now, you need to pay for a new "whatever" if you want the thing to work again.

You may be confident of one thing: These purveyors of "lifetime" warranties usually have a large drawer full of asterisks with which to counter any claims you might make. They'll keep pulling out those asterisks and beat you to death with them until you stop bothering them and go away. You can count on it.

Did you know that European governments find the whole notion of "lifetime" warranties so preposterous that they BAN lifetime warranties? That's my understanding. For instance, our Swarovski optics enjoy a lifetime warranty here in the USA, but in Europe are limited to 30 years. Now this lifetime warranty from the Austrian firm, Swarovski, is actually real and they are renowned for honoring it. (Granted, we're paying for it - it's built into the price. They provide a nice view, though. ) There are no parallels in the automobile industry to my knowledge.

Take the money and run. Buy a Toyota or Subaru extended warranty AFTER the original full coverage warranty expires, and negotiate a good price for it. Authorized dealers sell these warranties on the Internet for hefty discounts. They're nothing but a piece of paper, after all.

I hope you and others have found these thoughts useful and helpful.

Good luck and enjoy your new car.

[extrashaky]

Originally Posted by robwbright

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.

The warranty companies make money on these because most of the people who buy them do not keep the cars long enough to recoup the price of the warranty. The majority of their customers will be covered by the manufacturer's warranty for most of the time they have the car. Then they'll sell it or trade it in before they have to make a claim against the extended warranty. It can make sense for some people to buy it, but those people are fewer.

You might think, "I'm keeping this car forever." But even if your repairs are covered, that attitude can change when you realize you can't rely on the car.

I would tell the OP to take the lower price. If you really think you'll keep this car for 20 years and will need funds for repairs outside of the manufacturer's warranty, make your own warranty. Set aside that $1,100 you saved in an interest bearing account or investment. Call it your "warranty fund" and don't touch it. After 10 years of compounding interest, you should have plenty in there to handle that big repair you would have used the warranty for. And if your plans change, and you end up trading the car for something else after five years, you can keep the warranty fund for the new car or cash it out to help you buy it.

[extrashaky]

Originally Posted by Porsche

By the way, Chattanogga, WHOSE lifetime?

YOUR lifetime? Really?

The components lifetime? If this, then when it breaks, the insurance company will likely tell you, "It lived a full life, and now it's dead. That was it's lifetime." And now, you need to pay for a new "whatever" if you want the thing to work again.

He did say that "lifetime" referred to his ownership of the vehicle:

Originally Posted by Chattanooga FR-S

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.

[Dadhawk]

Originally Posted by Buddhalite

IMO these lifetime "warranties" are nothing more than scams. Chances are it only covers the powertrain and there's likely many things that you can easily do that will void the warranty. Even though oil changes are recommended at 7500 miles this may stipulate that you get it done every 3k. Don't do that and it's voided. You may also be required to only have it serviced at the dealer. Guess what happens if you don't?

I agree, but it would be tempting for me because I typically hold on to a car as long as the powertrain is good. Of my last 4 daily drivers, the final mileage on them was (around) 152,000; 212,000, 252,000 and 289,000. The only reason I got rid of them was a powertrain issue (either transmission or engine). If any of them could have been fixed so that their scrap value + repair costs was less than their market value I would have repaired them.


Still I'd have to read through all the fine print, and see actual examples where they company repaired cars with 200000+ miles on them before I would accept it.

[Chattanooga FR-S]

Here is the copy of the Lifetime Warranty that Dealer B offers. I think I am going to go with the discounted price at Dealer A, and then if I feel it is needed, I will buy another comprehensive warranty right before the 3 yr/36k mile bumper-to-bumper warranty expires. That way it would cover more than just the powertrain items.

Or, I might have given into the "mod bug" by that point and a warranty would not be possible.

Also, by buying the Monogram from the local lot, it keeps the rarity of that model/color higher around here!

It should arrive later today, so by tomorrow I SHOULD have it... FINALLY!

Thanks everyone for your input!

[strat61caster]

Anything that will break that the warranty covers hassle free will be in the first 30k miles since it has to fall under the umbrella of a 'manufacturer defect'. Anything serious and widespread later than that will likely result in an eventual recall or warranty extension.

I don't see any point in an extended warranty. And that's coming from someone who hopes they never sell this car.

[Golferguy667]

Take the price and run my friend! I'm a salesman at Toyota. The warranties are a scam. That dealership is luring you in with that enticing offer and then will hit you will all sorts of service stuff in their finance office. It's what we do. You'll end up leaving there with every paint/rock/ clear bra option they sell. Take the discount and drive happy my friend


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