I'm buying a new car–is an extended warranty a good idea?
Monday, September 6th, 2010 at
6:03 pm
I need to let them know by Monday if I want the warranty. It’s to extend the three year warranty to a 7 year warranty on a 2011 Toyota vehicle. I don’t want to throw 00 out the window, but if it’s a good idea it may be worth it. (It’s bumper to bumper–just like the 1st 3 years).
Thanks!
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Extended warranties are always a gamble. You can look at it two ways.
1. It is $1300, but you would save all that on the first repair. For example, if a transmission fails, that can easily cost you $1300 in repairs.
2. If nothing ever goes wrong with the car, you just spent $1300 on nothing. (Some extended warranties have a clause that will refund you a portion of the plan cost if you don’t make any claims before it expires.)
Extended warranties are like insurance, it’s about peace of mind.
Here’s what I would do:
- Browse the web for common problems with your Toyota especially problems that occur after the 3-year bumper-to-bumper.
- Check with the service department at the dealership for approximately how much it would cost to repairs those common problems.
- So let’s say, average cost for repairs to common problems is $800. If you can readily write a check for $800 to repair your car then the extended warranty probably isn’t necessary.
- Also consider if you plan to keep your car that long. If you don’t keep a car for more than 3 years, then the warranty is useless. It adds value when you resell it, but you probably won’t get back what you paid for it.
- You can also negotiate the $1300, could bargain down the cost $100-$200.
Lastly, if you do get a warranty, make sure it is a warranty backed by Toyota. Many dealers will offer you warranties backed by 3rd party companies and those are no good.
I`ve heard horror stories about the extended "warranties" !!
Yes well if you live in the City and drive in the city I do think it would be a good idea to have extended warranty.I myself have one and I have a 1996 Acura 3.5 RL .And ever time I have a minor problem with my car I go to my dealer and they give me a loaner car, because I have an extended warranty .However if that car warranty does not come with it then I`ll be thinking more of my pockets then anything myself,. You must do what works for you not the dealers nor anyone else.They will tell you what they want you to know to fatten their pockets.Be wise..
The dealer wants you to buy it because he makes more money on the warranty than the car.
Don’t buy it.
Wait till the 3rd year, Toyota will contact you with another opportunity to buy extended coverage.
Or you can buy it from a private company or AAA for less.
They aren’t extending your warranty to 7 years, they are selling you 4 years, you already get 3.
If you still decide to buy it, negotiate the price of the extended warranty, just like the car, it’s not set in stone.
If they tell you it is, guess what ? They are LYING !