We have a 1999 Toyota Camry which was bought used, factory certified in 2000 (it has around 60 k on it). We recently got a notification from the “gurantee folks” saying that our Toyota Guarantee will expire soon and we need to pay $150 or so to continue our warranty for another year.
My question is :
1> Is the guarantee really worth extending ? Or is it a small risk I can live with ?
2> If I do not extend the guarantee, will it effect our car payments ?
All help is appreciated
The Camry has been one of the most reliable cars around for years. (check out Consumer Reports annual guide) I’d think you’ll be just fine without the additional one-year warranty.
It shouldn’t affect your car payments at all. Why would it?
It’s probably not worth it. Keep in mind that extended warranty companies are in business to make money; they do this by collecting premiums and paying as little as possible in claims. They avoid paying claims using several techniques. First, the warranty itself excludes many many parts of the car. Very little is actually covered. Second, they have an incentive to find any excuse they can to stonewall you. What will you do if you have a $400 claim, and they come up with a bs reason not to pay? Here’s an experiment for you: Call up the warranty company and pose as an outraged consumer with a claim. Demand to speak to a supervisor. See how they treat you.
Bumper-to-bumper warranties that include rental car replacement while being fixed are usually good. These are often in Mechanical Breakdown Insurance plans for older cars. But yours is so new. Maybe you could have the car inspected & get a mechanic’s opinion.
Thanks all for the response.
What do you get in the guarantee?
I think you’ll find that this “extended warranty” is not related to the factory warranty, although the salesmen may imply (or even state) that it is. Consumer advocates pretty consistently pan these as bad deals–they’re essentially overpriced insurance policies.
Statistically, it’s not a good deal. But one aspect of statistics is the “Russian Roulette” effect–there’s only a 16% chance you’ll get the bullet, but if you happen to be in that unlucky 16%, you’ll be 100% dead. But unless a large repair bill will break you, there’s no compelling reason to buy this.
If it’s comprehensive bumper-to-bumper coverage, I’d say go for it. If it’s “powertrain” coverage, skip it.
A comprehensive warranty is worth it. I have a '97 Taurus sedan with about 76,000 miles on it. When I bought the car I spent an extra $1250 for a 3 year/100,000 mile warranty extension from Ford. I’ve had to use it on three occasions: to replace a failed oil pan gasket, a bad power window motor, and a bum halfshaft.
While these three repairs probably don’t total $1200, all three of them happened when I was short on cash (as catastrophic repairs often do). It was a great relief to only be out of pocket $50 each time. For that alone it was a great comfort. Plus, it was good to know that if I was on a road trip somewhere and the car crapped out I could just go to the local Ford dealer and get it fixed for $50 with no problems.
If they’re only offering “powertrain” coverage, pass. All your $150 gets you is internal engine and transmission coverage. Those bits are pretty reliable, and failures are rare. A word of warning, though: late model Camry transmissions are expensive to replace. My friend’s wife’s '97 Camry needed a new transmission not too long ago, which cost upwards of $4500 for a new (rebuilt) unit. The used trans they went with was something like $2750.
If you’re really interested in an extended warranty, you should shop around. As has been stated, the folks offering the extension are almost certainly not the manufacturers, but a third-party insurance company; and they may be hoping to scare you into overpaying for their product. I had my car loan with a local bank, and they helped me find a better deal when my warranty expired (due to mileage) before my loan did. (Helped protect their investment, you see …)
I bought the extended warranty for my 1994 Yamaha Seca II and my 1999 Jeep Cherokee.
The Yamaha started smoking after a few thousand miles. Of course, it wouldn’t smoke when it was in the shop. One day I took it in for routine maintenance. I’m told the dealer ran angrily back to the garage and demanded, “Who started up that two-stroke indoors?” The mechanics helplessly pointed to my four-stroke Seca. That convinced him that something was wrong. I had an overhaul at 15,000 miles that was covered by the original warranty. There was also a problem with an oil leak later that involved removing the engine and splitting the case. This was covered under the extended warranty.
One day the Jeep’s “check engine” light came on and it would not shift into high gear (yet another reason for not buying a car with an automatic transmission!). It turned out to have a bad “neutral sensor” inthe transmission. This was covered under the extended warranty, and the part alone was close to $200. Also, the front module of the computer failed a few months after a car hit me and pushed me into the car ahead of me when I was stopped in traffic. Since it was not directly related to the collision, it was covered under the extended warranty. The failed module got me the loan of the dealer’s courtesy van, and the failed sensor paid $30 of the $35 rental for a new VW Beetle.
Generally I think that extended warranties are a waste of money. I would not buy one of the extended warranties they push so hard at Best Buy. But for vehicles I took into account that I have to commute almost 100 miles per day and due to that, I’d have a higher probablilty of needing to use the warranty.
So I’d say that the value of an extended service agreement depends on how you use the vehicle.
[Homer]
"Extended warranty, how can I lose?
[/Homer]
It’s from the episode where the cause of his stupidity is found to be a crayon. At the end, “Dr.” Moe reinserts the crayon. Homer saying this is taken to mean that the crayon is in far enough.
That the stupidity of extended warranties is well known enough to be a Simpson’s joke says a lot.
Also, check out Clark Howard’s web site.
I’ve had two transmissions replaced in two cars thanks to extended warranties. The costs would’ve been $1500 & $1800 without them. As it was, I paid the deductable costs for each job $100 & $50 respectively.
I’ll be buying an extended warranty with my next car, too.
-B
How much did you extended warranty cost?
I let the salesman talk me into an extended warranty. He didn’t explain it was drivetrain only, by the time I received the information, it was too late. Of course I didn’t ask either. :smack: I will never get one again… on anything. I’ve yet to use one, on a car, or whatever. I could have purchases several items over again if I hadn’t spent all that money.
I honestly forget the cost of the extended warranty. It’s financed into the car payment itself. I’m sure it’s not more than $10 or $15 of the total monthly payment amount, though.
For the life of the loan, that’s $600-$900 total (plus interest). Certainly less than the $1800 tranmission.
Besides, I look at it like insurance. It saved me from having to find $1800 all at once, an impossibility for us. It’s much easier to “finance” that big repair into the car payment itself.
The first transmission failure, and the nearly free repair, is what encouraged us buy one on the next car purchase.
That’s certainly much less than than I’ve seen them for. For that price, I probably wouldn’t have a problem with getting one.
What kind of cars are you getting? I want to make sure that I don’t buy one. A transmission failure like that should be relatively uncommon on a modern car.
NO, NO, NO!
They are not worth it. Especially if purchased from a private company. I bought one on a new car in 1995. It was good for 100K or 6 years. it cost $1200, and seemed like a good option at the time.
The car was a Ford, so of course it went many miles before it needed any repairs. (the manufature warranty expired after 36,000)
Getting this company to pay anything was next to impossible.
They would hit me with all these weird little rules, like "you didn’t notify us that your clutch was going to need to be replaced before it went out and left you stranded on the highway.:mad:
How does that grap you? I’m supposed to know if something is going to go wrong before it actually happens!
Then they would only approve having the car serviced at places that were far away from where I lived. I live in Milwaukee, but they wanted me to get my car serviced in Beloit, and hour and 1/2 away! Theres a million places here to get a car fixed! I’ll bet they told their clients in Beloit to take their car to Milwaukee!:mad:
They wouldn’t allow me to have the car repaired at the dealership where I bought it, even though they charged less than the place the warranty company wanted me to go!
At 94K my car had a couple of things go wrong, all which was supposed to be covered by this warranty, but that company did everything they could to avoid paying. I’d be on the phone, screaming at this jerks for days in a row! They should have paid approximately $2100 in repairs, but because of all the hoops they made me go through, I ended up with only $90 being paid!:mad:
And yes, I did complain to some consumer groups, and was told that warranty companies are high on the frequent complaint list!
Don’t do it!
The first is a 94 Mercury Sable and the second a 97 Ford Windstar. The first transmission was probably ruined by a lost speedo gear that shreaded something, the second cause was unknown. I also had a 89 T-Bird that I traded-in with a balky transmission (hard shift between 1st & 2nd).
None of them have been abused, used to trailer, driven off-road, or anything else abusive. Just around-town and long-distance vacation driving.
My wife and I have agreed that the next vehicle will not be a Ford product.