Certified Platinum Extended Warranty: worth it?

[Hamster]

On June 1, I will have reached the three year point of ownership of my Yaris. At the time of this writing, my car has almost 12,000 miles, the majority of which are highway miles. Apart from standard maintenance items, I have not needed anything serviced on this car. Since I feel like I really haven't driven the car enough to break anything, I decided to swing by the dealership to ask about extended warranties. The finance guy discussed the Certified Platinum Warranty with me. It's a bumper-to-bumper warranty that will cover the car up till when it's 7 years/100,000 miles old. I'm sure many other people here have looked at this warranty and considered it. It'll cost $1,724, which, of course, is a lot of money. When I finance guy was discussing it, it sounded like a great deal. However, the more I think about it, the more I feel uneasy about it. For one thing, there's a huge opportunity cost in tying up that much money on the gamble that something will go wrong in the next four years. In addition, years down the road, the line between what is wear-and-tear and what is something that's actually broken can be kind of fuzzy. I'd be afraid that the dealerships and/or the manufacturer will use this fuzziness to deny my use of the warranty.

So, my question is, do you guys think it's worth it? I'm guessing no, but does anything think that this is something I shouldn't pass up? For the record, I own my Yaris outright, and I intend on keeping it forever. And based on this forum, it appears that very little can go wrong with this car anyway. Seems to me that the main problem that appears with this car is failure of the water pump. But that's considered part of the powertrain, and the factory powertrain warranty is good for five years (so, not something I need to take into account when considering this warranty).

[MadMax]

No way, no how. I have yet to own a vehicle that needed an extended warranty. Toyotas are known for their build quality, and if you read the contract you will probably find that it doesn't cover as much as you'd expect it to!

I usually keep my cars for ten years, and plan to do the same with my 08 Yaris.

Invest the money in bonds instead, it'll be a better/smarter move.

Cheers! M2

[auxmike]

I bought the same warr with my car in '08 for $659. The water pump costs under $100. That price he quoted is insane. You should just sock away the $1700 as an emergency fund for repairs in the future..

[vten]

Leah, save the $1700 and start modding :) ,especially with those little mileage after 3yrs.

I have the 7yrs n 100K warranty, but it's included onto the price when I bought mine from Toyota direct 3 yrs ago.... But no way I will pay that much To add.

[auxmike]

I think it's cheaper to buy it when you buy the car new vs years later...

[Hamster]

@vten
As you might have guessed on your own, yep, that price quote came from Toyota Direct. I hadn't stopped by any other Toyota dealership, because I figured they'd all be the same. And yeah, the more I think about it, $1,700 is a lot of money to pay for a warranty. That amount would indeed pay for a lot of mods and the labor to install them, should I ever decide to go that route the the future. That kind of money for a warranty may be worth it for an expensive car that has a lot of fancy electronics that might break, like a BMW. But my car doesn't even have power windows or power locks.

As some other people mentioned here, yes, I vaguely remember the extended warranty being a lot less expensive when I first bought the car. I didn't go for it at the time, since I wasn't sure the if it was a good idea. And with all the comments people are leaving here, the consensus is that it's still not a good idea. Is that $1,700 price typical if you buy the warranty later on? Or is this particular dealership trying to rip me off?

[why?]

warranty pricing is highly negotiable. The person selling you is quoting you the "no haggle" price. Just like every piece of a car, the dealership tries to get as much money out of the warranty as they possibly can.

But frankly with replacement costs on this car being so insanely low the warranty is a waste. for $1700 you could replace half the car, including labor.

[jpmck03]

My 2 cents, for what it's worth.

Put the $1700 into a money market account for those seven years and collect interest on in each month. Or, if you feel confident in the car, place some of the $1700 into a 60 month CD. If you need to fix the car, just dip into those funds.

Hopefully (and knowing how reliable these cars seem to be) you'll never end up using any of it, and if that's the case, you'll get a little more back then you had before!

[fnkngrv]

warranty pricing is highly negotiable. The person selling you is quoting you the "no haggle" price. Just like every piece of a car, the dealership tries to get as much money out of the warranty as they possibly can.

But frankly with replacement costs on this car being so insanely low the warranty is a waste. for $1700 you could replace half the car, including labor.

You hit the nail on the head. Some examples:

Replacement motor with 20-30k miles: 450-600
Replacement motor with 45-70k miles: 300-500
Transmission: 600-1000
ECU: 100-400
Full Carpet: 350-450


Sure, the labor costs could be argued, but even still parts for this car that are major are dirt cheap because they are not in high demand so salvage yards are having to sell at low prices just to get it out of inventory.

I am glad that I didn't invest in the EW when I bought mine back in 06 and that is even in hindsight. The only thing that I got suckered into, which might not really be called suckered since it is a theft tool was the etched windows identifying the car as mine if stolen and that got talked down to only an extra 100 bucks.

[Hamster]

I just wanted to thank everyone for the excellent advice. I am definitely not going to get the extended warranty. I'll save my $1,700 and either invest it or do something fun with it. I'm so glad I left my checkbook at home when I went to the dealership, so I wasn't able to make any impulse decisions. The more I think about it, the more I think I was nuts for even considering this.

By the way, the salesman at the dealership didn't seem willing to negotiate the price of the warranty down. I don't know why....Either he thought I would be willing to pay anything, or maybe it's the dealership's policy not to negotiate on the price.