Buying an Extended Warranty? READ THIS FIRST!!

[JuneBug]

The Toyota Extra Care Vehicle Service Agreement (extended warranty) can be very valuable to have when something unexpectedly breaks on your RAV4 past the 3 year/36,000 mile factory warranty. Some say that Toyota builds some of the most reliable vehicles on the road today, and the extended warranty is a waste of money. However, today's Toyotas are far more complex than those from just 10-12 years ago.

The additional safety systems, ECU's and electronics can be very expensive to troubleshoot and repair. For example, what if the power window goes out on the driver's door? This is a complex system of a motor, ECU, switches, and jam protection circuitry. You might be surprised to find out the parts and labor to replace just the motor could very well exceed the cost of the extended warranty. Another example would be the Limited's Auto Climate Control. This is more than just an A/C and heater--it has ambient temperature sensors, a sun sensor, servo motors to control and regulate airflow separately for both driver and passenger, all controlled by a small computer. This is not something your average mechanic can repair--many of these systems need diagnostic equipment and training that only the dealerships have.

Most of us were offered the Toyota VSA by the salesperson when we were buying our new RAV4. They usually save the pitch until the very end of the deal when you're about to sign on the dotted line. Most buyers balk at the price of the VSA, most of the time it's anywhere from 1200 to 2000 dollars! The profit margin on these warranties is HUGE. They could lower their prices by 50% and they would still be making a fair profit. The smart buyers ALWAYS turn down the extended warranty at the dealer. They know that they can always wait and buy the warranty anytime before the 3 year/36,000 mile factory warranty runs out. AND they know they can buy that same Toyota VSA from ANY Toyota dealer. So, why not shop around and buy it from a dealer that offers the best price? Here are the latest prices from Jerry Johnson of Midwest Toyota:

Toyota Extra Care Vehicle Service Agreement, Platinum
No deductible

8yr / 75,000 miles - $659 - The price for this warranty on the Toyota site is $1325 for comparison.

Things included in this coverage are:
*Unlimited towing to nearest Toyota dealership
*Reimbursement up to $50/day for 5 days per occurrence for rental car
*Meal/lodging up to $100/day when over 150 miles from home
*Transferability (with fee) to others if vehicle sold


Jerry Johnson
cell phone (620-664-8844)
jerryj@midwestsuperstore.com

Midwest Toyota
1100 East 30th
Hutchinson, KS 67502
(800-530-5789)
Midwest Superstore 866-796-3495 | Lincoln Dealers | Hutchinson, KS

Called Jerry and got the following quotes:
6yr / 75k - $479
7yr / 75k - $559
8yr / 75k - $659
7yr / 100k - $814
8yr / 100k - $944
7yr/ 125k - $1059
8yr / 125K - $1259

But what happens if you already bought the extended warranty from the dealer? Don't worry, you can cancel the warranty by calling Toyota Financial Services and get your money back. You have 60 days to cancel for a full refund, after that there may be a small fee.

There are other dealers, such as Troy Dietch from Greenfield Toyota in the Boston area that offer similar deals. The key thing to remember is this is the same warranty that your dealer sells, and will be honored at any Toyota dealer in the US and Canada. The only difference is the price.

Here are a few threads discussing this same topic:

Extended Warranty Price Update

Warranty Coverage

HUGE Thank you to RAV4World and all Forum members- Jerry's Extended Warranty

Toyota Car Extended Warranty

[hidesert]

I'm one of those guys that doesn't like to bet against the house. I figure Toyota knows the odds better than I do and they couldn't make money if this was a good deal for the average owner. On the other hand, if a large repair bill would bankrupt you it might make sense. Some of the coverage in the platinum plan is just fluff for some of us such as the reimbursement for lodging on the road - I would never use that - and towing - already covered by my credit cards. I wonder what the discount price for the lesser coverages such as Gold that don't include these would be?

[JuneBug]

Originally Posted by hidesert

I'm one of those guys that doesn't like to bet against the house. I figure Toyota knows the odds better than I do and they couldn't make money if this was a good deal for the average owner. On the other hand, if a large repair bill would bankrupt you it might make sense.

Normally, I would agree with you, but not this time. A large repair bill wouldn't bankrupt me, but it would put a serious crimp in my home budget. I don't have a wallet full of credit cards for emergencies, got rid of those years ago. Now I only use a debit card. So if it isn't in the checking account, it will have to wait.

The way I see it is I'm betting Toyota that some time between now and November of 2016 SOMETHING is going to go wrong with my RAV4 AND it's going to cost more than $659 to repair. If that doesn't happen and the vehicle is flawless until then, I'm fine with that. I consider it cheap insurance.

[newrav42011]

I bought the 8 year 75k warranty from Jerry when the vehicle was brand new with a few hundred miles. I canceled my AAA tow insurance because the Toyota warranty includes tow. I'm saving money for the first three years even if I never use it. I'm 99 percent sure I'll use the warranty sometime before the 8 years is up and the warranty will more than pay for itself. If by some chance I never have a failure in 8 years, I still win. It's a small price to pay for piece of mind.

[newrav42011]

One more thing. If I happen to sell the vehicle before 8 years, the factory warranty helps sell the vehicle at the best price. I win again.

[ricepower]

Originally Posted by newrav42011

One more thing. If I happen to sell the vehicle before 8 years, the factory warranty helps sell the vehicle at the best price. I win again.

+1

[Blogson]

It would be nice if Toyota would move to having a 10 year/100,000 mile warranty like Hyundai . . .

[WJBertrand]

Why not invest the amount you would have paid for an extended warranty into an interest bearing account of some kind? That way the money still works for you and if you luck out and never need to repair the car with it, you can keep the money. Add to this account when you buy your next car and before long you may have enough for a down payment on a brand new car in the future.

Our family has owned 12 Toyota's, Scions, and one Lexus over the last 40 years or so, not one of them would have benefited from an extended warranty and all but our current '11 Rav4 and daughter's '10 FJ (both still too new) went well past those coverage limits at 125K with no major problems. Of all of them the only one that needed a major repair was a transmission failure on a '98 Sienna. That happened with less than 10K on the clock so was taken care of by Toyota. We still have that vehicle, currently with > 206,000 miles on it with no further mechanical problems. Besides the Rav, FJ Cruiser and the Sienna, we still have an '02 Lexus IS300 and a '97 Tercel.

Save your money.

[Tonyride]

I got the 8 yr/75K plan. Well worth the peace of mind it provides.

[seven_rav11]

We got the 7yr/100k plan. Better be ready than sorry. With the comparison of quality of the newly made cars from the old ones, I would say having an extended warranty is a wise decision.