Extended Warranty - Yes or No

[NEWHunter]

Well, I just bought a new daily driver - 2020 Toyota Camry LE. I bought it with the extended warranty and I’m having buyer’s remorse on the warranty. Here are the details: bought the car for $22,500 all in (including tax, title, etc) and paid an additional $2,006 for an extended warranty from Toyota.

The vehicle comes with a 3 year/36,000 mile warranty and the extended warranty basically takes that factory warranty to 8 years/125,000 miles. The extended warranty has a $0 deductible, is transferable for $50 or if I sell i can get the “unused” portion of the warranty refunded. I’m likely to own this car for about 12 years and we put on about 15,000/year.

Supposedly (per the sales guy) Toyota sells this warranty for $1,500 and the dealer marks it up $500. I know I probably overpaid for the warranty. Here’s my thoughts: If a $2,000-$3,000 repair pops up I can handle it financially. Toyota doesn’t sell these warranties to lose money. So the odds that I will come out ahead on the warranty purchase are not in my favor. Hence my desire to return the warranty and get my full $2,006 back before the 30 day return window closes. Of course if the backup camera/display go out I’m sure I’ll regret returning the warranty. Thoughts? WWYD?

 

[SFC B]

I would get my money back. On a Toyota product the likelihood of the warranty being necessary (being of value) is pretty slim. My last Toyota was a 09 Taco....it had 115,000 and the only thing that ever had to be replaced was a back seat belt tensioner that my daughter wouldn't wait to loosen up and yanked so hard on she jammed it. Heck, I didn't even have to replace the brakes (from new) until 92,000.

 

[belshawelk]

Well here is my thoughts. I bought my daughter a 2019 XSE Camry. I have never bought the extended warranty on anything other than my wife's Mercedes ( which is a whole different story on cars). I did buy the extended warranty and prepaid maintenance for her. I mostly did so as she is heading off to college across country and I didn't want her to have any issues that weren't easy to take care. It has already been in the shop for the infotainment system which started acting weird when she got a new phone. It needed to be updated. They would have charged me a service call for it. My guess is there will never be any issue it as Toyota is pretty good, which is why I bought it the first place. My only issues is these cars nowadays have a lot of electronic and power crap in them. Stuff I cant fix. Hard to say. For me its a piece of mind because the extended warranty also has roadside assistance. For my daughter it could be worth it. I also travel for business and cant be much help when I am in another state.

See how I gave you no useful information.

 

[ccc23454]

Toyotas dont need any warranty most of the time! Return it and buy a new rifle!

 

[jeff_gibbons]

My two cents - extended warranties are great revenue streams for oem’s. They do the math and usually net upwards or +50% margins. I’d suspect Toyota is much higher.

 

[ChrisC]

I dont know if it is a good idea or not for you to keep it but if you do decide to ask for your money back, you may want to consider - ahead of time - what price you would consider paying for it. That way you won't have to think so quickly on your feet if they offer to cut the price a few hundred bucks for you to keep it.

 

[406LIFE]

I can't speak to it being a Toyota, but the two times I have bought a warranty they paid for themselves at some point. If its an exclusion policy and basically covers everything I'd keep it. A new screen in one of my cars would have been $2k alone. I just make sure to read their requirements for keeping in line with the warranty and document it.

 

[Lyfter1013]

I know Toyota’s are reliable but at the end of the day with all the electronic equipment on newer cars all it takes is 1 or 2 things to go wrong and you’ll be spending more than $2k in not only parts but labor as well.. Add in the fact that you said the warranty would be good for 8 years that’s a long time I’d keep it as an insurance policy you hope you never have to use it but if you do it’s there for you. The other reason and the reason why I have gone with warranties in the past is if you spend $2k and add it to your loan that becomes a small “planned cost” you know it’s going to be there for the life of the Loan and it’s adds “$X” to your monthly payment are you more
Comfortable with that and not having to worry about an “unplanned cost” when you have a sensor or something else fail that results in a $1K unplanned cost you have to account for? That’s just the way I look at it so take it for what it’s worth just adding my 2 cents.


And for my last 3 vehicles I’ve gotten warranties for the first car about broke even after the 4 year warranty, I don’t remember exactly but it was close but the warranty company probably lost a small amount on that one... The 2nd was an exception to the rule and the warranty company spent about as
Much money fixing the truck as I did paying for the truck used. They covered nearly $12k worth of warranty work in 2 years. My car I have now has required no warranty work done so I technically lost on that but I had the peace of mind knowing that I wouldn’t have an unexpected bill for repairs during that time.

 

[F250]

We have purchased the extended warranty for the last few trucks we bought. Each time, the warranty has paid us back 2 or 3 times in repairs. One truck had a mirror malfunction (power, with defrost). That alone was $1200.00 Road salt is tough on vehicles in the NE. A couple changes of tie rods adds up.

 

[wseidel]

We bought a 2020 Honda Pilot EXL a year ago and I wrestled with the same question. My research on previous vehicles has always come back to the point that extended warranties are NOT worth it...especially since I do most of my own maintenance to hopefully head off future problems. However, the computer systems and technology on new vehicles added a new variable to my dilemma. After reading numerous threads on forums specific to the Pilot, I purchased my first extended warranty (8/120K as I recall) for $1345. I purchased it at a discount through a certified Honda dealership located in the NE (well known for selling Certified Honda Extended Warranties at a discount). I would recommend that if having the warranty for your daughter brings you peace of mind, that you research other purchase options via Toyota forums. I know I saved significantly and even offered the dealership where I purchased the vehicle to match the offer (they did not). I hope I never have to utilize this warranty but I'm glad I made the decision to buy it. Hope this helps.

 

[ignorethefringes]

Keep it, and every time you take it in to get serviced say, "Gee, I hope I don't get screwed on that extended warranty. Make sure you check real to make sure you catch any issues before it gets out warranty . . . ." LOL they'll find the work to do.

 

[noharleyyet]

I'm mulling the fine print on some for a 2018 2500HD GMC....doubt it'll cut down on the volume of daily calls on my cell tho.

 

[MNElkNut]

On average you will lose. OEMs don't offer ext. warranties to lose money. They have a profit layer built into that price. However, on one vehicle, it is a game of chance. If I had a game that I win 60% of the time, would you play one time for $2K?

 

[MThuntr]

It's a tough call. I used the hell out of the factory warranty on my Tacoma and eventually go tired of the monthly trips to the dealership for work on literally everything. I have no doubt that an extended warranty would have been necessary had I not sold the truck.

When I traded it in I was able to negotiate the extended warranty with 2 years of oil changes and shop fees to a price point of my liking. Even if it was just for nothing but peace of mind for me. On the other hand I know they're making money off of me.

 

[Khunter]

Get a refund. If you really want an extended warrantee, they will KEEP OFFERING one at lower prices than you paid.

 

[npaden]

On average you will lose. OEMs don't offer ext. warranties to lose money. They have a profit layer built into that price. However, on one vehicle, it is a game of chance. If I had a game that I win 60% of the time, would you play one time for $2K?

Just to expound on that a little, it isn't like everything will be riding on a single hand of blackjack here. For sure they sell extended warranties because they make money on them. Let say on average they are a 20% profit maker for the manufacturer. Plus there is incentive for the retailer to sell them so there is another say 10% profit there. Maybe around 30% total profit.

They sell 10 extended warranties. One guy may pay $2,000 and the car ends up having $4,000 of repairs and they take a big loss on that. Those are the ones you always hear about, just like all you ever hear about are the people that win big at Vegas. Somehow they are still building new casinos in Vegas so there are for sure more losers than winners but you hardly ever hear about people losing big in Vegas.

Back to the analogy... There are probably 5 or 6 people that pay $2,000 and the car ends up having $2,000 of repairs. Break even all around. Then there are a 2 or 3 folks that pay $2,000 for the warranty and might have $1,000 or $1,500 in repairs. They lost a little but they got something out of it.

Then the last guy paid $2,000 for the warranty and doesn't end up with a single repair. They still feel good about it because they never had to deal with any repairs. Chalk the cost up to peace of mind and go on with life.

You add all those together and the first and the last guy are the only ones that really had any real skin in the game, most people are going to break about even and then there are a few that are going to come out a little behind and that is where the profit to the manufacturer comes in. Statistically I'm sure the big group in the middle probably is within $500 either way on if they had bought the warranty or not. Odds are pretty good you will be one of those.

The above is assuming that this was a legitimate warranty that actually works. I think from the OEM you are fairly safe here, but I wouldn't trust the average aftermarket extended warranties that they try to sell you on the phone for anything. Generally they are breaking the law spoofing a number to even call you in the first place so you know right off the bat they are not going to stand behind anything they sell.

My 2 cents.

 

[deer_shooter]

I generally get the extended warranty and have it on my 2018 Taco. I doubt I'll need it but its there if I do. If financing over 60 months it adds like $25 or something like that to the monthly payment. I drive 30-40k miles a year so the peace of mind is worth it to me.

 

[DouglasR]

does being on huntalk increase the likely hood of using the extended warranty?
I drove way less miles before I created an account and had never used 4 low.

 

[NEWHunter]

does being on huntalk increase the likely hood of using the extended warranty?
I drove way less miles before I created an account and had never used 4 low.

Well, I took my last Camry on my first antelope hunt after joining here. So this new one might be a hunting rig at some point, which probably increases the likelihood of using the warranty.

 

[Durango Mike]

Well, I took my last Camry on my first antelope hunt after joining here. So this new one might be a hunting rig at some point, which probably increases the likelihood of using the warranty.

Some excellent comments. Initially signed up for extended warrenty on my Ford 350 at the dealer, after telling them I intended to replace the bed with a flat one which the finance person said made no difference, only to read the warrenty carefully to find that ANY MODIFICATION TO VEHICLE voids the warranty (INCLUDING the Ford 36K/3 YEAR bumper to bumper original one), called them back and cancelled it. Not that a Camry wouldn't look great with a flat bed, but READ THE DEAL CAREFULLY and do not believe a salesman or finance person that it is a great deal and covers all the electronics that could crap out. Some of the independent warrenty companies will cover a modified vehicle, but I am keeping the original bed until I cross 36K. I am still getting extended warranty offers weekly, even on vehicles we sold years ago!