Daughter is buying a 5 YO RAV4 hybrid and I am trying to get out of the repair the kid's cars mode. I would imagine buying a drivetrain insurance independently is better than what the dealer offers. Eastern PA, if that matters. So of course before I check any other sources the question gets posted here.
Ugh. I have not heard any good responses for this.
I have had a few acquaintances that had these "warranties" and if you can't supply the receipt for the exact type oil used in every oil change they will deny all claims.
These aren't warranties, they are insurance. They will deny any and all claims and fight each step of the way. Any small mis step is cause for them to deny.
The better bet is to put that money in your pocket and save it for when there is an issue.
This is all just my 2nd hand experience. Maybe there actually is a good company out there.
I gotta think buying a Toyota hybrid is already the safest bet you can make.
Clark Howard's recommendation - if you feel an urge to buy one of these, get the manufacturer's warranty extension, not whatever the dealer wants to sell that's third party and "better".
Or put some cash aside every month instead of putting said cash into someone else's pocket. I mean, it's a Toyota, what could possibly go wrong?
I don't know if it's true, but the advice I got one time was to speak to the repair shop you plan to use if you do have an issue, and ask them if there are any companies they have had success with submitting claims for payment.
BoxheadTim said:Clark Howard's recommendation - if you feel an urge to buy one of these, get the manufacturer's warranty extension, not whatever the dealer wants to sell that's third party and "better".
Or put some cash aside every month instead of putting said cash into someone else's pocket. I mean, it's a Toyota, what could possibly go wrong?
This is what I would post, too. If you look up how much people pay for the extended warranties compared to what they pay out- it's never a good deal. This isn't like car insurance where the risk can add up into 6 digits if there are injuries.
Especially for a used car- you can end up paying more for the coverage than the car costs.
But the math says put the money in a decent savings account for a rainy day. To go even further, if you have good credit and a good credit card, then the account needs to be only capable of being liquid to pay a CC bill- or once a month.
Good advice here. She is a saver already so just putting money away is natural.
On this thread I recently wrote about the programs pushed by some dealers.
This is a local example of one of these programs offered here. The marketing program branded Warranty Forever® is a program (scam) sold to many dealerships nationwide. The dealerships are in on the scam. The false promises gets cars sold and attempts by the customer to conform to the requirements puts a lot of dollars into the service department.
The Toyota service contract is the best in extended warranties, but not the cheapest.
I know a lot of european car lovers (Porsche, Rennlist) like Fidelity Extended warranties from one of the members who does discounted rates. Perhaps you can look there....or you can just save X amount of money every month and fix when needed.
alfadriver said:BoxheadTim said:Clark Howard's recommendation - if you feel an urge to buy one of these, get the manufacturer's warranty extension, not whatever the dealer wants to sell that's third party and "better".
Or put some cash aside every month instead of putting said cash into someone else's pocket. I mean, it's a Toyota, what could possibly go wrong?
This is what I would post, too. If you look up how much people pay for the extended warranties compared to what they pay out- it's never a good deal. This isn't like car insurance where the risk can add up into 6 digits if there are injuries.
Especially for a used car- you can end up paying more for the coverage than the car costs.
But the math says put the money in a decent savings account for a rainy day. To go even further, if you have good credit and a good credit card, then the account needs to be only capable of being liquid to pay a CC bill- or once a month.
I don't know if that's true in all cases. When I had my DCT 135 years ago, most places wouldn't repair only replace. Paying $3k to have a $10k transmission replaced. That's why I got rid of mine, even the speciality guy couldn't tell if it was the transmission or rod knock. So I drove it 1 mile down the street and traded it in on a 1 year old Mazda 3.
Subbed
I bought a carmax warranty for my 2017 f150 in 2019, and it more than paid for itself replacing a burst fuel line. and the sunroof cassette.
I agree that on average, warranties don't pay for themselves, but the carmax one was pretty inclusive, and i got no pushback on paying for the needed repairs. I have heard that there are different policies from carmax, so read the fine print. Mine covered everything except paint failure, glass replacement, water leaks and wind noise.
Read the fine print. Then read it again. Read it a third time. Then be prepared for the company to say whatever you broke isn't covered. Then be prepared to get a punch in the gut when your $6000 transmission rebuild is only covered for about $1500 of the total cost. Be prepared to threaten them with legal action, to which they'll reply "bring it on, chump."
Also be prepared for easily half of the shops decline to work on your car with the warranty. It is a crapload of work to make the claim, they'll deny it most of the time, and then its your shop who has to break the news to the customer that they're getting hosed.
The only few times my shop was sued (obviously thrown out because it's not our fault) was over these warranty companies. It's just a headache that we don't like to tolerate, and it doesn't make us any more money.
In reply to z31maniac :
On average it's true. Which means that there are certainly cases where it's very much not true. But I suspect those will be the ones where the company will fight paying for it the absolute most.
But here's the thing- for companies that specifically sell warranties, they do it to make money. Meaning that over the whole fleet of cars, they will bring in more money than they pay out. OEM's are required to support the vehicle for specific times, so that's not the same at all.
As I see it, they are very much like a casino- occasionally, they will pay out a lot of money, but on average, they bring in a LOT more money than they pay out.
One last thing- before someone goes out and gets a used car, they should know if there's a reasonable chance that they will spend more money repairing it than buying it. Like I'm betting that there are few old DCT vehicles out there worth $10k anymore.
In reply to alfadriver :
Agreed. I took a picture once (film camera days) of a woman at a casino in Vegas. She was sitting on one of those walkers with a seat, oxygen tube in her nose, smoking like a chimney, and in the background were 50-ft high marble columns that probably cost $1M each. She was likely convinced that the next pull of the slot machine would be her ticket to wealth... while ignoring the fact that she was just paying the mortgage on those columns.
As long as you think of vehicle extended warranties like this, you'll be happy. Getting something covered and actually coming out ahead in the game is about as likely as winning the Jackpot at Ceasar's Palace.
No personal experience so all second hand from co-workers and friends. Not one single person had a good experience. So whatever that means. Best advice has already been discussed. What ever the insurance plan would cost put in an account, be ready just in case. Take care of the vehicle, do all required maintenance, minimize chance of issues. Sorry, no big help here just the usual advice.
What about the manufacturer extended service plan or warranty? Not third part, but like the ones ford and chevy offer on the new cars with the 250 deductible? Same crap?
alfadriver said:In reply to z31maniac :
On average it's true. Which means that there are certainly cases where it's very much not true. But I suspect those will be the ones where the company will fight paying for it the absolute most.
But here's the thing- for companies that specifically sell warranties, they do it to make money. Meaning that over the whole fleet of cars, they will bring in more money than they pay out. OEM's are required to support the vehicle for specific times, so that's not the same at all.
As I see it, they are very much like a casino- occasionally, they will pay out a lot of money, but on average, they bring in a LOT more money than they pay out.
One last thing- before someone goes out and gets a used car, they should know if there's a reasonable chance that they will spend more money repairing it than buying it. Like I'm betting that there are few old DCT vehicles out there worth $10k anymore.
All companies exist to make money, that's literally the point of a business. That isn't some profound revelation.
In reply to z31maniac :
OEM's are required to provide a warranty. They are in it to sell cars, and try to avoid paying out fees that they are required to support. So OEM's have a vested interest in making sure their cars don't fail as opposed to not paying out coverage for a broken car. Let alone OEM's are trying to keep customers for future sales, so making sure repair issues are both minimized as well as dealt with quickly is paramount.
Aftermarket warranty companies make money when they pay out less than they bring- so they want to maximize the income from individuals and minimize the payouts to fix stuff. Both of which are not in the best interest of the car owner.
I'm not sure at all about "extended warranties"- I have no idea of the cost, nor the overall benefits to even compare to a company that just sells warranties.
It's a pretty big difference between an OEM warranty vs. a pay for one in terms of how they make money.
On a side note, when you get a used car, check the *required* powertrain warranty for the car- emission items are covered longer than most warranty periods, and they generally are the expensive items. You might have extra coverage and not even know it.
In reply to alfadriver :
Yes, consumer protection laws require a warranty. Like the refurbished laptop I'm using right now that has a 1 year warranty. Although I do find it interesting that emissions warranties are longer than the typical 3/36 powertrain warranties.......is the drivetrain not responsible for emissions as well? There is a lot of stuff around these hypocrisies, but that would quickly devolve into politics which is verboten here.
But what I said. Regardless of the type of company, what specific business they are in, they exist to make money. If you pay out more than you bring in, you aren't a successful business.
The best one is the one you don't have to use. That said, we got my wife's VW "used" with like 4000 miles on it. This turned the car in to a certified used car, which came with like double the factory warranty, plus the factory warranty was still fully in effect. This was in 2018, and it's still an amazing value (still under warranty this month).
In reply to z31maniac :
The point is how they make money. Car companies do it by selling cars and then trying to minimize repairs. Warranty companies do it by selling you repair coverage and minimizing how much they pay out. And the more financially successful companies maximize the money they take from consumers, and minimize the amount they pay out for repairs- both of which is bad for the consumer.
You can call it insurance for car repairs, or you can call it gambling for car repairs. Either way, it's not good for the consumer unless you hit the "jackpot" with a bad car and a very expensive repair.
As for the emissions requirements- that's just part of the emission laws. It's been that way for a pretty long time, but it seems that few are that aware of it. IIRC, for the 10/150 certified, that's 8/80k warranty for emission items.
In reply to alfadriver :
I thought most insurance companies made more on investing the premiums vs shorting the payouts. I've had aftermarket warranties payout more than I paid a few times.
In reply to Steve_Jones :
For a wreck or for a repair?
Still, it's a quick google search to find premiums for them, and then look up what kind of repair your car may need. And combine that with the car's value. Like I would hesitate to do a $5000 trans repair for a $4000 car that would be worth $3500 after the repair. How many people can afford a $200/mo carshield premium when they are paying the same to finance it?
On average, you will lose out. That's just how it works. And it's not required.
BTW, if they make their money on investing the premiums, people can do that, too. And they get to keep the profits.
You'll need to log in to post.
