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Extended Warranty - Toyota Extra Care

A dealer offered me 7year 100,000 miles extended warranty through Toyota Extra Care Platinum for $940. Do you think this is a good deal or not? They said that why would be able to lower my interest to 5.5% if I purchase this extended warranty. I have a few questions.

1) Do you think at $940 is a good price?
2) Do you think I can cancel the extended warranty and get the refund and keep the low APR?
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Comments

  • I just purchased an '08 Toyota Corolla and the dealer highly recommended buying an extended warranty from Fidelity Warranty Services, Inc. - they are out of FL. It's a Platinum Coverage which is 7 yrs/ 100,000 miles but mine cost $1562.00. I have a $0 deductible. This warranty also came with GPR - guaranteed price refund - if I never have to use the warranty I get the $1562 back. I called Fidelity today and they confirmed this.

    Now I am having 2nd thoughts abt this. I have 30 days to cancel. I spoke to the dealer today abt my concerns with the warranty and he said it was from Toyota which made me feel better. Fidelity is owned by JM Moran Company which owns Southeast Toyota - they distribute all the Toyota in the Southeast.

    I don't think they would be very happy with me if I cancel this policy yet I am wondering if it's worth it.

    What do you all think?
  • "dealer highly recommended buying an extended warranty from Fidelity Warranty Services, Inc." I highly recommend to buy some land on Mars too.

    Fidelity Warranty Services, Inc. sounds not like Toyota to me. GPR is definitely a sales gimmick. You need Toyota Extra Care warranty. Use link bellow for reference but I'm sure you can find lower prices.

    http://www.bernardiwarranty.com/Departments/Toyota-Extra-Care/Corolla/New-Coroll- - - - a-Personal.aspx

    Keep in my mind that you can buy extended warranty any time before you car hits 3 year/ 36K miles limit.
  • I wish I had known this before I was pressured into the warranty from my dealer! I live in NC, would this make a difference to your policy? The Bernardi warranty is a lot cheaper too.

    I did find out that Fidelity is owned by the JM Moran Company which owns and they own Southeast Toyota which means that they supply the Toyota's around the Southeast.
  • Link I gave you is not for "Bernardi warranty". This is factory direct Toyota Care warranty that honored in every Toyota dealership across the US. Bernardi Toyota dealer only sells it at discount price but if you do some reading in the extended warranty thread you might find another dealer that sell it for even less.
  • How hard is it going to be to cancel the warranty I purchased? I know the dealer is going to be mad and probably nasty. What are my rights? Not sure if you know this or not....
  • You said that you have 30 days to cancel. Read the fine print on your warranty contract. Go ahead and cancel while you can. I'd care less about "mad and probably nasty" dealer who's taken advantage of me.
  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,986
    Check the fine print about getting a Toyota warranty too. Some manufacturers won't let you cancel and then turn around and get the extended warranty again.

    The SET Fidelity warranty should be different from the Toyota one, but there may be some agreement between Toyota and that distributor that may come back to bite you. Probably not a problem, but it wouldn't hurt to ask.
  • Steve - Are all these types of warranties a rip off? Are they legally bound to honor their service contract? I'm sure I could find something cheaper but I wonder if it's worth all the work to save a couple hundred dollars.
  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,986
    Are all these types of warranties a rip off?

    Ah, that depends on who you ask and how well you sleep at night knowing it may cost you $1200 to fix your navigation (or other expensive computerized doo-hickey, like the ECU) in your SUV a few months after the manufacturer warranty expires.

    I think extended warranties are a big profit center for the dealers and I've never thought they are worth it. I have made buying decisions based on long factory drivetrain warranties though. (5/50 and 7/70 for my last two new cars).

    Personally I'd rather keep the cash in my interest bearing bank account and hope for the best. Plenty of people report that an extended warranty has paid in spades for them though.

    I think the best ones are like the ones Subaru and I think Honda offers, and you say the one you got has this deal - you buy them, but if you don't use them during the extended warranty period, you get your money back. Maybe Lucky_777 knows something about this gimmick that I don't though.

    I don't really trust the non-manufacturer warranties much - too many of those outfits have gone bankrupt leaving owners holding a worthless scrap of paper.

    Are they legally bound to honor their service contract?

    Well, they are supposed to do what the contract says they'll do, right? The reputation that many of the aftermarket companies have is that they have a long laundry list of items that aren't covered, and will take any opportunity to deny your claim. So then you have to go to the BBB or court to try to enforce the contract.

    The manufacturer backed warranties are supposedly a bit better about spelling out coverage since how they treat their warranty customers also reflects on how they treat their car customers in general. And dealers may be more familiar with how the factory backed ones work, which may be a factor if you plan to move, or you travel a lot or if your dealer folds.

    Other talking points:

    You have a factory warranty so any extended warranty will be running at the same time as the factory warranty, and you may not get any benefit from the extended one until after the factory warranty expires. This harkens back to another point of Lucky's - since you can buy one before your car hits the 3 year/ 36K miles (or whatever) warranty limit, if you wait, that gives you ample time to predict whether your SUV is a creampuff or has some issues. If it has lots of issues, you may decide to trade, and that may negate your ability to get your extended warranty money back and it may not be transferable to the new owner.

    An aftermarket extended warranty company may require you to pay for the repair up front, submit paperwork and then wait for payment. Or they may take a few days to authorize work, which can mean an extra trip to the dealer. Rumor has it that the manufacturer backed warranty is easier to deal with in this area.

    Hope this hasn't made your decision harder. :blush:
  • I normally don't buy extended warranty but in my case I've taken few things in consideration. Firstly I tend to keep cars for long time, though not as long as I used to before. 7 years is a minimum for me. This is a first year production for HL and looking at Avalon and Camry first year production issues I wanted to have better long term coverage. Lastly I paid $560 for Toyota platinum extra care for a vehicle with price around $30K. So far I had zero issues with the HL but for the money I paid for the warranty I can sleep better for the next 7 years.

    As far as blndamb15 paid $1562.00 for the COROLLA warranty... If you look at the car price vs extended warranty price ratio then warranty cost was 5-6 times highier for blndamb15's Corolla then for my HL. For the money he spent on the car I'd rather buy a 2008 Camry with most of the bugs worked out by now and wouldn't worry about a thing. I wouldn't buy any warranty for Corolla. It is dependable, relatively cheap, and had been around for a while.

    My advise to blndamb15 - cancel your warranty, get your money back and invest them somewhere. When you'll be close to 3year/36K limit then revisit extended warranty issue again.
  • No you didn't make my decision harder. It would have been a lot easier if I had known all this before buying the car but I wasn't aware of this type of thing. They really gave me a great price on the car plus a great interest rate so I saw the extended warranty as an insurance policy. If I never use the warranty, I get the $1500 back. The dealer has been in this area forever so I figured if anything happens with this warranty, I could go back to the dealership since they are the ones who sold it to me. I'm sure they wouldn't like showing up on the news with the a consumer reporter talking abt their business practices if they decide not to honor what they sold me.

    I had a Honda before, bought it used, and I seemed to have so many problems with it that the thought of having a warranty to save me some money in the event of a breakdown for my new car seemed like a smart idea.

    I did call Fidelity Warranty Services yesterday and they seem legit and they did confirm the refund policy.

    Does anyone know how much the dealership makes on selling these warranties? I am curious to find out.

    Thanks so much for your time. This is really a great education for me!
  • One more thing to add to my post above... Don't hold your breath on getting $1500 back. Chances are high that you'll have a non major issue within next seven years. Once you get your car repaired even for let's say $50, or $200, or $500 then you can kiss your $1500 good bye. And if you invest your $1500 today in the moderate mutual fund then it will be worth around $3K in 7 years.
  • Lucky, you give a good case for cancelling this warranty. Have you or anyone you know, ever done this?

    I have another question, and you might now know the answer, but why are businesses allowed such bad business practices? Shouldn't stuff like this be against the law?
  • Steve, I tried to be so careful in getting a good deal on a car. The warranty was for me an insurance policy against big repairs. Now, I'm beginning to think that I should cancel this. I spoke to the dealer yesterday about my concerns with the warranty company. He definitely sounded defensive, like he knew I was thinking of cancelling it. So, now if I do go ahead and tell him to cancel it, I'm concerned abt his attitude and getting his cooperation with the cancellation. He could sit on it for months and all I could do was bother him weekly to see if it's been done.

    I am getting the feeling that their livelyhood is based on selling these warranties.

    Any suggestions on the best way to handle this? I know I sound clueless, and I am, so any suggestions would be helpful.
  • Some people here canceled warranty without a problem but you need to read a fine print on yours. I'd say then sooner you do it then better. As far as car dealers and "bad business practices"... They go hand by hand for ages. You hadn't seen the worst of it yet. Nothing new here.
  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,986
    Does anyone know how much the dealership makes on selling these warranties?

    I've seen reports as high as 60 to 80% profit on each plan:

    shadow5599, "Malibu/Malibu Maxx: Warranty/Extended Warranty" #19, 31 May 2006 8:02 am

    My gut tells me 40 to 50% is more typical and my guess is that the profit margin is lower with the factory backed ones.

    Here's another option to further muddle the issue - you could tell the dealer you paid too much and you're going to cancel unless he lowers the price $500. :shades:
  • Ok, but here's the thing: I'm scared to do this! The guy seems mean and like he would be angry. I'm not upset at all with the car, I love it actually, but I wish I hadn't bought the warranty.

    Can someone give me some courage here to do this?????
  • He's not gonna bite you. You're not stealing from him, but him from you. This is your right to cancel and this is your money. I guess you need to bring your mom along to scare the hell out of him. :mad:

    You never said how much you paid for the car, I'm sure your were taken there too.
  • Actually, I got a great deal on the car.

    My mom is like me, very passive, so she wouldn't be much help.

    Geez, I hate this type of stuff!

    How do you do it? You sound like nobody gets one over on you. What the secret?
  • Secret is very simple. Educate yourself before not after. This site has wealth of information on car buying process. I knew about warranty, windows etching, seat protection, and other high margin gimmicks ahead of time and refused everything on the spot. Don't be afraid to confront the dealer. Get your hard earned money back from him or he'll spend it on gold watch or silk tie.
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