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The Woes of Extended Auto Warranties

Discussion in 'General Tundra Discussion' started by Sean266, Apr 22, 2015.

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Have you purcahsed an extended warranty?

  1. Yes I have, and I have used it.

    3 vote(s)
    33.3%
  2. No I haven't, and don't care for it.

    6 vote(s)
    66.7%
  3. Yes I have, and never used it. It's a waste of money.

    0 vote(s)
    0.0%
  4. No I haven't, and wished I did.

    0 vote(s)
    0.0%
  1. Apr 22, 2015 at 9:07 AM
    #1
    Sean266

    Sean266 [OP] #ThinBlueLine Staff Member

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    It’s no surprise that extended warranties for autos rank high on consumer complaint lists. Contracts are riddled with exclusions, making it hard to tell what is covered and under what circumstances. If a covered part is damaged by a noncovered part, you may be on the hook for the whole bill. And if you haven’t followed the maintenance schedule, the warranty could be terminated.Payouts over the life of an extended warranty typically fall short of the cost of the warranty. In a 2014 survey by Consumer Reports, more than half of extended warranty purchasers never used their policies. Those who did, on average, spent hundreds more on the policy than they recouped. The median price paid was just over $1,200 (though less-reliable brands and luxury makes charged $1,500 to $2,200); the median savings on covered repairs for all brands was $840

    Despite the poor track record of extended warranties, one in three car buyers takes one home, says the Service Contract Industry Council. It’s easy to see why you’re likely to get the hard sell in the finance-and-insurance office. The difficulty of cashing in on a contract keeps the profit margin high (a 50% cut for the dealer is not unusual), and the added warranties keep customers coming back to the dealership for lucrative repairs after the manufacturer’s warranty has expired.

    Even if you don’t buy an extended warranty when you buy your new car, you may get another pitch when you bring your car in for routine maintenance or via an official-looking notice mailed to you just before the manufacturer’s warranty expires.

    Buying peace of mind. One big reason people never use an extended warranty is that cars are more reliable than they’ve ever been, and manufacturers’ warranties are better, too. Bumper-to-bumper coverage lasts three or four years, and the powertrain is covered for five to 10 years. If your car is rated highly for reliability, it’s less likely you’ll find value in an extended warranty. In Consumer Reports’ survey, owners of traditionally reliable makes, such as Honda, Subaru and Toyota, were far less likely to have used extended warranties than buyers of brands that have had average or below-average reliability or luxury brands that tend to have high repair costs.

    Here are four tips to keep in mind when signing up for an extended warranty.
    1. If you’re determined to buy an extended warranty, do some homework. Know what’s covered by any policy you’re considering as well as what your factory warranty covers. Some policies offer extended bumper-to-bumper coverage, some offer powertrain coverage, and some offer both. You may find extensions of the original warranty to 10 years or 100,000 miles, or even longer. Bumper-to-bumper coverage will probably give you the most bang for the buck. The engine and transmission are the most costly to repair, but they’re covered by the original powertrain warranty, and most repairs today aren’t related to the powertrain.


    2. Warranty prices are negotiable. Get an offer from your dealer as well as other dealers in your area, and be prepared to haggle. Prices will jump after your original warranty expires.


    3. The issuer of the warranty makes a difference. Steer clear of third-party sellers; you’ll be limited to certain shops or need authorization for repairs, and you will often have to pay out of pocket for the work done and then be reimbursed. “Automakers offer the safest harbor if peace of mind is your top priority,” says Kelsey Mays, consumer affairs editor for Cars.com. Prices are similar to third-party warranties, the dealer takes care of the paperwork for repairs, and you can get repairs done at any dealership that services your brand.


    4. Know the cancellation policy. If you purchase a warranty and then change your mind, in most states, you have the right to cancel within 30 days of signing if you haven’t used the policy.


    https://www.yahoo.com/autos/the-woes-of-extended-auto-warranties-117017928887.html
     
    Last edited: Apr 22, 2015
    GNTundra, matluth and UPSed like this.
  2. Apr 22, 2015 at 10:33 AM
    #2
    UPSed

    UPSed New Member

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    My last few purchases I have got a great deal using the Costco buyers program only to have finance try to get back their lost profit. We usually meet somewhere in the middle and I am satisfied with my purchase. Our latest purchase of a 2015 Crewmax SR5 TRD almost resulted in the same thing. As soon as the finance manager opened his mouth my fiance blurted out I'm not going to sit here and watch my payments go up. Please finish the contract. He did so immediately! I will definitely be bringing her on my next purchase!
     
    tat2ude39 likes this.
  3. Apr 22, 2015 at 10:53 AM
    #3
    tat2ude39

    tat2ude39 MYota

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    I need the option... I purchased the extended warranty and haven't had to use it yet. I paid $2400, probably too much, but the Inferno color was blinding me. A nice piece of mind for the major items such as engine and drivetrain, but also because the vehicles today have such complex electrical systems, a back up camera, and our Entune system.
     
  4. Apr 22, 2015 at 10:57 AM
    #4
    tat2ude39

    tat2ude39 MYota

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    PRO Nasty and UPSed like this.
  5. Apr 22, 2015 at 11:17 AM
    #5
    matluth

    matluth Fish On!

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    18"X9" FN BFD's rims, 295/70R/18E Cooper Discoverer STT Pro's, upgraded to Old Man EMU coil-overs/shocks. Toytec shackles Next: true dual exhaust, new UCA's.
    Before I got my 07 I had a 09 Tacoma which I bought in 2010 and had 14K on it and still under warranty. Chose not to go with extended warranty since truck was basically new. I decided to get the extended warranty on my 07 which I got a year ago. Truck at that time only had 49K and was ridiculously clean. Aurora PD Gang Investigation Unit had it for a few years and only used it when they needed it. I had all the service records from day one but still got the extended warranty mainly because I wasn't the one driving it for the previous 7 yrs. Paid 2K for Zurich bumper to bumper warranty for 2 years or 100K. Covered everything but consumables. Even though tranny and engine are bullet proof other things are not. Truck is 8 yrs old. Ever notice where the alternator and power steering units are located? The starter? Not fun to replace. Stealership wants a fortune to swap those out. Nothing is easy to fix anymore. Everything is crammed together in one small space. As tat2ude39 mentioned there is the ECU and all the crap it controls. I believe in Murphys' Law. If I didn't get the warranty some weird thing would have happened to the tranny and I'd be out $2500. It's all a matter of choice and piece of mind I guess.
     
    Last edited: Apr 22, 2015
  6. Apr 23, 2015 at 6:11 AM
    #6
    Jack Burton

    Jack Burton Jorts Rule!

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    I'm of the mindset that extended warranties are best purchased near the end of the factory warranty period, if at all. Buying the extended warranty while purchasing a new truck, means you'll be using that 'extended' coverage--even while still under the factory period. If you then decide to trade it back in a couple years, you'll only get back a pro-rated portion of what you paid for the extension, even though you never actually left the factory warranty. You'll be pissed (mostly at yourself for not reading the fine print better :frusty:) and will walk away with an $800 hole in your ass with do-diddly-dick to show for it! Ask me how I know.
     
  7. Apr 23, 2015 at 6:26 AM
    #7
    matluth

    matluth Fish On!

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    As Sean referenced above, one needs to be diligent when considering extended warranties. A legit dealer should not offer an extended warranty on a newly purchased truck that does not kick in until MFR warranty is up. Same with used trucks. If you buy a used truck where the warranty is almost up a legit extended warranty should not kick in until MFR warranty is up. Extended warranties should never be grandfathered into a current MFR warranty. You need to see what is actually covered in writing before you sign. Only buy from reputable dealers. They are out there. Also if you find out that the extended warranty is crap after you have signed on the dotted line, you usually have up to 30 days to cancel warranty with no penalty in most cases. Due diligence.
     
    Last edited: Apr 23, 2015
  8. Apr 23, 2015 at 12:21 PM
    #8
    Sweet_nasty87

    Sweet_nasty87 New Member

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    I got mine for the peace of mind as my payment only went up 17-20 bucks. straight from Toyota, after reading this I think I might stop by and ask more questions then decide if to cancel or not.
     
  9. Apr 23, 2015 at 4:39 PM
    #9
    matluth

    matluth Fish On!

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    I have not bought a "new" truck for some time but I am thinking when purchasing an extended warranty from Toyota on a new truck your paying extra to actually extend warranty beyond standard warranty period. Some unscrupulous used car dealers will sell warrantys that start the date of sale even if the vehicle may still be under original warranty. That's where the rip off is. It is probably best not to buy an extended warranty that goes beyond the length of time that you will have your truck, although if truck is still under warranty you can sell your truck quicker and possibly for more money in a private sale.
     
    Last edited: Apr 23, 2015
  10. Apr 24, 2015 at 5:30 AM
    #10
    Primo

    Primo New Member

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    I did not buy the extended warranty. My truck has 167,567 miles on it as of this morning. No issues whatsoever, besides regular maintenance items. As long as you take care of your truck it will take care of you. Never miss an oil change and always check all the fluids, filters and you will be ok. Getting ready for a another 3,000 mile trip to Los Angeles next month.

    Tundra Shinny.jpg
     
    UPSed and matluth like this.
  11. Apr 24, 2015 at 5:54 AM
    #11
    matluth

    matluth Fish On!

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    That's good to hear. Only have had my truck for a year now. It came with maintenance records. Well maintained. Recently changed out original shocks/coil-overs, new pads and rotors (original ones were warped), and lubed all the u-joints. Should be good to go. I am probably going back up to Anchorage next fall. With the weather extremes in AK, vehicle maintenance can be a life or death issue if your out in the middle of nowhere. My 09 Tacoma was a great truck. No issues. like you said, "As long as you take care of your truck it will take care of you."
     
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