Extended Warranty - Is It Worth It?

[paultnl]

Hi All,

I have just acquired a MK2 Prius T Spirit on an 06 plate with 38K on the clock and have been offered the two year unlimited mileage extended warranty for £954 (£47.70 per month) together with a 3 year Service plan for £718 (£22.43 per month).

As I will be doing approximately 25K miles per year do you think it is worthwhile?

The total monthly cost of £70.13 will be more than covered by my fuel savings but you know what they say about something looking too good to be true.

Paul

[valmiki]

They've hiked the price - £750 for me two years ago (January 2013)

Is that including the '24 months for 20 months' price? (available if you use direct debit or pay upfront)

http://www.toyota.co.uk/insurance-and-warranty/extended-warranty

and click on Payment and Claims

Can I pay in instalments?

Yes, our easy payment terms allow you to purchase a 12 month Toyota Extended Warranty over a 10 month period and a 24 month Toyota Extended Warranty over 20 months by direct debit, at no extra charge. You can also pay by credit or debit card, or by cheque.

[paultnl]

£47.70 x 20 = £954 Was the price for a car of the same age?

[valmiki]

No, my 2010 isn't as old as yours, but I'm pretty sure the price was the same regardless of how old the car was (up to ten years and 100k or whatever the cut off was).

The 'sticker price' for me was higher (around £900ish) and some half-hearted haggling got me £748 for 2 years unlimited mileage (which was with the 20 months reduction).

In any case for you it's probably a bargain, for me I'll have to think twice when it comes to renewal time!

[valmiki]

Does your 3 year service plan take into account you'll be having at least two services per year? (every 10k)

[FROSTYBALLS]

The service plan should specify how many services and which services are included. Also, have a look at how the service plan compares with Toyota's Fixed Price Servicing costs - ideally the cost of the specific services should be close to, or mirror, the Fixed Price Service costs. Also what addition service requirements (eg brake fluid change every two years), if any, are included. MOT's included?

[FROSTYBALLS]

As regards the extended warranty, its a gamble - hopefully nothing will need replacing under the extended warranty, but it will provide peace of mind.

With two Mazdas we had extended warranties on, the first needed the drivers airbag replacing (cost of warranty £450 - cost of airbag £750 plus labour), the second needed nothing under the extended warranty (cost £450 for two years). Both included full breakdown and recovery - which will also be included under the Toyota extended warranty.

[Duffryn]

Just to satisfy my ignorance, who fixes the extended warranty prices - Toyota or dealer (in which case is a bit of negotiating room available?), or a third party eg insurance/warranty company?

[FROSTYBALLS]

Toyota fixes the extended warranty prices and underwrites the extended warranty. The Toyota extended warranties are managed for Toyota by The Warranty Group.

Having said that, it may be worth asking the dealer whether there is some wriggle room on the price.

For example, when we took out an extended warranty on our Mazda 2, the dealer was cheaper for the official Mazda extended warranty, than it was to buy the official Mazda extended warranty online.

One thing to bear in mind is that unlike the new car warranty, for which the EU Block Exemption regulations apply (allowing independent garages to service Toyotas whilst maintaining the new car warranty), extended warranties are not bound by Block Exemption. So manufacturers and warranty companies can legally specify where a car under an extended warranty is serviced.

In the case of a Toyota extended warranty, Toyota dealers have to carry out servicing in order for the extended warranty to remain valid.

[paultnl]

Good points, thanks for the input. I will clarify with the dealer what is included in the service plan at the moment it looks like two intermediate and one full service plus three MOTs. I have just had the brake fluid done with a full service + today.

[valmiki]

Also if you can, ask another dealer for any difference in price on the extended warranty - you may be surprised...

[johalareewi]

My extended warranty (2009 gen3 prius) is up for renewal this November and I have been quoted just over £800. When I got the extended warranty the first time, the dealer did an extended warranty, service plan, and MOT bundle which worked out well. There are some prices the dealer can't change but they do have some wriggle room and if you ask, they may do a deal.

You can also spread the cost of the extended warranty (and service plan) over several months interest free, and the extended warranty includes club Toyota membership (roadside assistance).

[valmiki]

Was that for 2 years, <10k (hope it was!)

[PeteB]

I had a few Toyota extended warranties with the second Gen 1 Prius which I had for 9 years/163k from 2002 (the original 5 year warranty ran out at 60k miles).

I would never have another Toyota extended warranty - they used some underhand tricks like saying a faulty a/c compressor (engine driven on the Gen 1) that was investigated just before one warranty ended and the renewal started wasn't covered because the fault was reported before the CURRENT warranty started - Toyota Customer Services eventually persuaded them to relent.

They also rejected claims for rusty brake discs even though at the time Toyota were routinely replacing them under the original warranty,

I would have loved to have gone the the county court with that one because I had copies of other owners' dealer receipts showing the warranty work and the advertising/contract for their "manufacturer's equivalent" cover of the warranty. Almost to my dismay, Toyota themselves paid after after spending over six months failing to force their own warranty provider to do so!

[timberwolf]

Disappointing, but it doesn't surprise me that the Toyota UK warranty is run by crooks.

[johalareewi]

Was that for 2 years, <10k (hope it was!)

2 years unlimited mileage.

Nov 2014 to Nov 2016.

[valmiki]

Even better! thanks for that, I'll know what to ask for now ;-)

[johalareewi]

I would never have another Toyota extended warranty...

I guess the dealer plays a part in this.

Whatever Toyota use behind the scenes, the dealer should provide the customer with the illusion of a continuous, extended manufacturer's warranty.

[PeteB]

I don't think the dealer can be blamed here, because they (quite reasonably) expect to get paid for the work they do.

For extended warranty jobs they have to get prior approval from the extended warranty company, and obviously if that's not forthcoming one can't expect them to behave like a charity (although mine did on one occasion, swallowing a £110 repair that the warranty company didn't authorise).

[Parts-King]

The dealer is often between the devil and the deep blue sea. Rusty brake discs (for instance) would never be covered under an extended warranty, despite what a new car warranty would cover. Cosmetic, rust and the like is not covered, the warranty covers manufacturing defects only with no element of wear and tear

[timberwolf]

The dealer is often between the devil and the deep blue sea. Rusty brake discs (for instance) would never be covered under an extended warranty, despite what a new car warranty would cover. Cosmetic, rust and the like is not covered, the warranty covers manufacturing defects only with no element of wear and tear

I can't see that would be any need to replace brake discs just because they were rusty? If they were pitted, scored, warped or too thin but not rusty.

[valmiki]

I may be wrong here (hope not) but if, for example, the brake pads/discs were ruined due to the calipers going kaput, then they would be replaced (along with the calipers) under the extended warranty?

[PeteB]

The discs (both ends) needed replacing urgently because they were down to minimum thickness. All this was down to leaving the car parked for 6 days a week, after previously doing lots of miles.

Some 95% of the usable thickness was lost in just 7,000 miles, because of the cycle of rusting, scoring off on the odd day the brakes were used (the A/C compressor also died through the seals drying out during this time despite being on all the [minimal] time the car was being driven).

Ordinarily, I would not think of trying to get discs replaced under warranty, but was influenced because:

1. Toyota had been voluntarily replacing them under the Gen 1's very generous "bumper to bumper" 5 year (60k) warranty
   
2. My warranty ran out after 3 years because of high mileage, but the wording of the "manufacturer's equivalent" Toyota branded extended warranty made some haughty claims, which I would have loved to have tested in County Court
   
3. I was angry they didn't use a better mix of metals for the discs (which were not exactly cheap parts), such that they could be destroyed so rapidly (in daily use, they can last 200-300,000 miles if the driver has a gentle right foot and good acceleration sense).

Toyota fixed the problem from their point of view a few years ago by modifying the main new car warranty to specifically exclude brake discs!