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It is a $0 deductible Platinum Plan
Toyota Extended Warranty Thoughts and Opinions
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Will check it out. Thank you!
CharlieS
GOLD Star
I've only done this a couple of times, but what I have observed is that the prices on these warranties are very negotiable. If you get a decent F&I person, you can get a halfway decent deal that covers your risk at a reasonable price.
LCT
SILVER Star
I picked up a ‘13 with ~14k miles and was sold a 4yr 50k mile $50 deductible EG Assurance warranty. Anyone have experience with this warranty? I’m thinking about cancelling as well.
LCT
SILVER Star
I have owned several Toyota vehicles over the years and i still do, you just made the finance guy rich by buying that warranty that you will very unlikely never use. I say take that money back put it in a high yield savings and in 5 years i'm sure it will be enough to pay for any repairs or upgrades you need/want. Just my 2 pennies. BTW Congrats on the new LC and post some pics.
Depends, if your asking whether keeping it or canceling it makes more sense. And a ‘13 with only 14k miles is like new as long as it’s not rusting out but even then....
If your policy cost $1,000 or not too much more, I’d keep it. If it cost $4,000, then I’d cancel it. But that’s just me.
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This topic resurfaces often on here. I hate to rant, so please move on if you're not in the mood for it.
I think it's awesome people (like the OP) ask questions like this. Also awesome to get two/three view points for each person to come to their own conclusion. What I find irritating is that some state their opinion as fact when it is clearly an opinion. With that said, it is my opinion, that vehicle service contracts (VSCs) in general are not a rip off. Of course there is a chance that you will never use it (50%). There is also a chance that you will (50%). So that leads to the question of:
A) what is the value of peace of mind
B) what is the chance that your claim(s) over the term will exceed the cost? (or) cost of repair(s) + peace of mind.
Again; In my opinion, it is extremely unfair to tell someone adding protection is a "rip off" UNLESS you are willing to pay their repair bill. As a dealer who writes over 50,000 service RO's per year, I can show you (each & every day) countless situations where VSCs pay for themselves in just one use. Toyota's are great vehicles (in my opinion). But knowing that any repair, large or small, is covered 100% with no deductible has to have monetary value, especially if you are frugal with money.
Dealers have their profit margins (as does every product or service in every industry), I see no issues with that business model, it's called capitalism. I would never apologize (or ask someone to apologize) for making a profit. If a customer and dealer want to negotiate a "better" price then so be it. A good deal is when value exceeds price. Profit margin has absolutely nothing to to with a good deal.
If you don't like unexpected expenses, large or small, then you need to determine the value for yourself and whether it's a "good deal" for you.
I think it's awesome people (like the OP) ask questions like this. Also awesome to get two/three view points for each person to come to their own conclusion. What I find irritating is that some state their opinion as fact when it is clearly an opinion. With that said, it is my opinion, that vehicle service contracts (VSCs) in general are not a rip off. Of course there is a chance that you will never use it (50%). There is also a chance that you will (50%). So that leads to the question of:
A) what is the value of peace of mind
B) what is the chance that your claim(s) over the term will exceed the cost? (or) cost of repair(s) + peace of mind.
Again; In my opinion, it is extremely unfair to tell someone adding protection is a "rip off" UNLESS you are willing to pay their repair bill. As a dealer who writes over 50,000 service RO's per year, I can show you (each & every day) countless situations where VSCs pay for themselves in just one use. Toyota's are great vehicles (in my opinion). But knowing that any repair, large or small, is covered 100% with no deductible has to have monetary value, especially if you are frugal with money.
Dealers have their profit margins (as does every product or service in every industry), I see no issues with that business model, it's called capitalism. I would never apologize (or ask someone to apologize) for making a profit. If a customer and dealer want to negotiate a "better" price then so be it. A good deal is when value exceeds price. Profit margin has absolutely nothing to to with a good deal.
If you don't like unexpected expenses, large or small, then you need to determine the value for yourself and whether it's a "good deal" for you.
As Eric said it's peace of mind. There are repairs that can exceed the cost of the warranty. Things break on any vehicle, just less on a cruiser. The good thing is you still have 10K factory warranty which enables you to have things fixed since you are the second owner.
It comes down to what makes you happy. For my situation, I can afford an unexpected repair if it comes up and so I didn't get an extended warranty when my factory was up.
It's personal choice. Not a rip off and not the right choice for some. If you rest easier having one, then that is all that matters. Asking this forum will get you their personal opinions based on their situations and choices.
Go with your gut and don't look back!
It comes down to what makes you happy. For my situation, I can afford an unexpected repair if it comes up and so I didn't get an extended warranty when my factory was up.
It's personal choice. Not a rip off and not the right choice for some. If you rest easier having one, then that is all that matters. Asking this forum will get you their personal opinions based on their situations and choices.
Go with your gut and don't look back!
My personal expereince is that these extended warranties are worthwhile as long as you are paying <50% of the list price; which is what I have always done. I have an extended warranty on my 2016 200 that paid for itself when the charcoal canister and vacuum solenoid had to be replaced.
to OP ... here's my thoughts and experiences with extended warranties -
for the vehicles that we have -
2012 BMW M3 - did not purchase an extended warranty (due to exorbitant pricing) and would not have needed it for the time that the warranty would have been applicable. still have the car and fortunately, I have a very reputed indy shop that specializes in this generation of the M3.
2013 land rover LR4 - we did purchase the extended warranty mainly due to fear of electronic / electrical gremlins that were known to be prevalent although not frequent with this generation of land rovers. Here the warranty guys won out - thankfully (and knock on wood!!), we did not land up needing to use it, so we technically would have been fine in hindsight, but if I were to go back and do it all over again, I still would purchase it because in case of an issue (with electrics/electronics/mechanical) with a land rover, it is stupid expensive to fix.
2016 Honda accord - did not purchase it. but the car was a nightmare. I had more warranty related issues with this one than in all my other vehicles that I have owned combined!!! seriously the car went in for a total of 5 warranty related issues in the first 18 months of ownership!! when I looked at the invoices of what it would have cost me if it was on my dime - it was north of 20K USD. kept that car for its factory warranty period and then sold it. Admittedly, after those initial warranty issues were fixed, the car was fine for the remainder of ownership ,but, I did not want to have anything to do with it after my experience. strange because it was a honda and supposed to be more reliable than the europeans.
The way I infer it, if a particular vehicle platform has known issues that can crop up at a particular age / mileage, then it makes sense to play it safe and get an extended warranty. BUt just because it is a known "reliable" brand like Honda or toyota does not mean that you are automatically granted bulletproof reliability with that particular vehicle.
If it gives you peace of mind at the price that you buy it, then I guess it makes sense for you - may not for someone else in that exact same situation.
One more thing to consider - do you plan to do mods?? If yes, then from my experience it gets murky pretty quick with what the extended warranty may or may not cover. I do not have much experience in this so I dont know if there are options to cover some or all mods that maybe planned. easier if you decide to stay stock.
Apologies for the long post.
for the vehicles that we have -
2012 BMW M3 - did not purchase an extended warranty (due to exorbitant pricing) and would not have needed it for the time that the warranty would have been applicable. still have the car and fortunately, I have a very reputed indy shop that specializes in this generation of the M3.
2013 land rover LR4 - we did purchase the extended warranty mainly due to fear of electronic / electrical gremlins that were known to be prevalent although not frequent with this generation of land rovers. Here the warranty guys won out - thankfully (and knock on wood!!), we did not land up needing to use it, so we technically would have been fine in hindsight, but if I were to go back and do it all over again, I still would purchase it because in case of an issue (with electrics/electronics/mechanical) with a land rover, it is stupid expensive to fix.
2016 Honda accord - did not purchase it. but the car was a nightmare. I had more warranty related issues with this one than in all my other vehicles that I have owned combined!!! seriously the car went in for a total of 5 warranty related issues in the first 18 months of ownership!! when I looked at the invoices of what it would have cost me if it was on my dime - it was north of 20K USD. kept that car for its factory warranty period and then sold it. Admittedly, after those initial warranty issues were fixed, the car was fine for the remainder of ownership ,but, I did not want to have anything to do with it after my experience. strange because it was a honda and supposed to be more reliable than the europeans.
The way I infer it, if a particular vehicle platform has known issues that can crop up at a particular age / mileage, then it makes sense to play it safe and get an extended warranty. BUt just because it is a known "reliable" brand like Honda or toyota does not mean that you are automatically granted bulletproof reliability with that particular vehicle.
If it gives you peace of mind at the price that you buy it, then I guess it makes sense for you - may not for someone else in that exact same situation.
One more thing to consider - do you plan to do mods?? If yes, then from my experience it gets murky pretty quick with what the extended warranty may or may not cover. I do not have much experience in this so I dont know if there are options to cover some or all mods that maybe planned. easier if you decide to stay stock.
Apologies for the long post.
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I was walking through the shop this morning and noticed this Highlander on the lift with the engine pulled out. I looked at the VIN and noticed it was a 2019 model year. I looked up the vehicle. We sold it 6-months ago, 6103 miles on it. We need to reseal the timing cover which we will bill warranty for $4538.07. ($125/hr labor [25 hours] + $1413.07 parts). Now this is an extreme case of failure, but isn't that why you have life insurance too? To make a point, this vehicle is classified as a T1 (lowest level actuarial risk per Toyota warranty) AND was the final-year of that design run (which is supposed to be the most reliable). A Land Cruiser is classified as a T5 (highest level of actuarial risk per Toyota). I didn't pull this picture from an archive either to make a point; this is from 5 minutes ago.
Point is, even if this happened under warranty (which it did) would you want to pay this out of pocket or would you rather have peace of mind that everything is covered? FWIW: I think the Toyota Care Platinum is worth the premium and I bought it on all my Land Cruisers.
Point is, even if this happened under warranty (which it did) would you want to pay this out of pocket or would you rather have peace of mind that everything is covered? FWIW: I think the Toyota Care Platinum is worth the premium and I bought it on all my Land Cruisers.
I agree with A and B completely, Eric, but I disagree with the capitalism part.
A) As far as peace of mind, I bought a Platnium VSA when I bought my CPO 2013 with 49k miles on it. We were financing for 5 years a vehicle which had 25 months of use already, and I preferred to pay $20/month for 5 years as an insurance policy against an expensive repair which the CPO warranty wouldn't cover. I think many folks who purchase the warranty are doing so for similar reasons
B) Whatever you pay for the warranty, statistically speaking the odds are it's a negative investment for you. The warranty is an insurance policy, and the warranty companies have actuarial tables in which they've calculated what the breakeven cost is, on average. That's ok though because for every person who drops $1300 on a policy that they don't use there are folks who avoid a $8k repair to replace the rear DVD player or some other expensive problem which wouldn't otherwise be covered.
In general the rule of thumb with extended warranties is that people should self-insure against small losses but externally insure against large or catastrophic ones. (So insure your house, don't buy an extended warranty on that new TV, and when it comes to your new (or new-ish) LC/LX everyone makes the call differently as to how much of a loss they are willing to absorb).
Now where I object is the capitalism comment, so feel free to stop reading here if you'd like.
I think a lot of people go into dealerships armed with invoice, other dealer, etc pricing, but there's far less transparency and information around what extended warranties, paint protection, tire protection cost, what financing/interest rates are available to the buyer (which are sometimes different than what people are quoted), etc. That's not to say that cost = value. I agree with you that profit margin doesn't imply a good or bad deal - but there are a lot of dealerships which take advantage of that information imbalance when people get into the finance office. (Note: I'm not implying your dealership does as I've never been there, but my father-in-law worked in the finance group for several dealerships in the Baltimore/DC area and he was a real sleazebag).
There is a line somewhere where legitimate capitalism (i.e. Apple's profit margins on a product they created) crosses over into price gouging (i.e. 10x overcharging because someone stockpiled hand sanitizer and N95 masks and created a shortage). An extended warranty isn't the same need as PPE, but when someone else is paying 2.5x what I just paid for the exact same thing because there's very little if any transparency in either the cost or expected value, at the very least it's just plain taking advantage of someone. Capitalism is about supply and demand, and markets are about fair price discovery. Fair price doesn't mean at cost, but it does mean being able to factor in cost, profit margin, statistical likelihood of failures, average repair cost, etc. Toyota's policy change a few years back which prevents (highly discourages? penalizes?) dealers from selling VSAs to people who aren't in the same state and/or who don't go into the dealership they are buying it from seems to encourage the bad dealer behaviors and discourage transparency with customers.
FWIW while I'm probably a bit too price sensitive at times, I would've still purchased my VSA if the price was in the $1500-1600 range, which by my "back of the napkin" calculation would have been a fair price. But when the dealer started at $3000 and then kept negotiating down again and again to get my sale I went from "what's fair" to "I am going to win this negotiation", which ultimately became a $1200 purchase. So they could've made more profit on me if they had been reasonable from the start. And while I'm sure the finance department still made money on it (because they wouldn't have sold it if they didn't); however I have to ask (rhetorically):
a. How many $3,000 warranties do the dealerships really sell that if you just set a fixed price with a reasonable profit margin you wouldn't make up for it?,
and
b. What's the "value" to dealerships of making the buying experience miserable for consumers? (Or conversely, what would the value be to your dealership if it made the *entire* buying experience pleasant and low-hassle?)
I'll leave you with a thought around point (b) above. Those who know me well would agree I'm too "price sensitive" too often (read: I'm a cheap bastard). When I purchased my 2013 I ended up with gold because it was $5k cheaper than red, black, or gray. (Red would've been my preferred color). I had it shipped from Houston to Chicago because even with shipping it was still $4500 less. However I did NOT try to negotiate the price with the Chicago dealer - in part because the Houston dealer already had the lowest price for a similar LC in the entire country, but also because the Chicago dealer was willing to handle the vehicle transport logistics for me, and I felt that whatever profit they were getting on the sale (despite me having done all the work to locate the vehicle I wanted) was entirely "fair".
Bought used 2016 14.4k miles in 2018, got 100k 8 year extended warranty. Hope I never have to use it but peace of mind. If I had bought new might not have done it. When got wife Infiniti G37S Coupe in 2009 new we got 100K 8 year extended and leaking timing chain cover paid back warranty cost 7 years later. So you just never know.
good for you!!
@Eric Sarjeant ... so, I have a question for you. The builds that you do on new LCs... those are awesome. However, considering the fact that they involve some major modifications , either cutting the body panels or mods to the underbody - (example bumper and LRA tank installs ) OR the electrical / suspension mods; would I be correct in assuming that these mods would essentially void the factory warranty OR at the very least would significantly increase the risk of denial of a factory warranty claim if it is even remotely related to the mod?? Especially, if a dealer other than you needs to handle that issue??
And, how would the Toyota extended warranties work in such a scenario??
And, how would the Toyota extended warranties work in such a scenario??
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Very well expressed thoughts! I can't speak for all dealers- just Ed Martin Toyota. I understand where you are coming from on the pricing. We typically sell VSCs (or VSAs) between $600-$1000 profit margin. It's unfair to look at just price, because as you said, the actuarial tables are rated on coverage's (i.e. Platinum, Gold, Silver), term, miles, deductibles, and also the vehicle itself (i.e. T1-Highlander and T5-Land Cruiser). If you are buying an LR4- the cost would likely be well over $3000+ where an LC200's cost may be $1800 for the same/similar variables listed in previous sentence. That's why I chimed in on the OPs question specifically asking about Toyota Platinum as the coverage's would be the same despite where it was purchased from.
I think there is a lot of truth in the point of "what is the value of the experience". You hit the nail on the head. I agree 100%. As for margin, I probably look at this differently that a consumer. The Consumer believes our business model is to make money selling cars. But the volume dealers business model is actually selling a car (hoping to break even or not lose too much) to sell financing, feed your service dept, and get good trades. Then rinse & repeat. If you can turn a lot of cars quickly, you make WAY more money maximizing the other revenue streams. Not to mention you can starve out your competition by stealing market share. That's a topic for another day though.
CharlieS
GOLD Star
Only one datapoint, but the dealership that I bought my CPO '13 Land Cruiser from offered me a deal I couldn't refuse on a Toyota Platinum warranty. The F&I person said she'd rather give it to me at a low price than have me walk away an unhappy customer. No back and forth negotiation involved. It cost me less than a set of four tires. I didn't ever use it, but it was well worth it for the peace of mind.
