Hmmm Should I buy a warranty???
#1
Driver School Candidate
Thread Starter
Hmmm Should I buy a warranty???
Hey everyone! I purchased my first Lexus (2007 IS250 used) about 3 months ago and it runs great! When I bought it, it was at 50k miles from a dealership and now it's at 53k miles.
People keep scaring me with statements such as, "Oh man those cars are SO expensive to fix."... "Even more expensive than a German cars."..."You better hope nothing happens to it!" ...blah blah BLAH..
Is this make/model unlikely to need any major repairs in the next 5 years as long as you keep up with the maintenance?
A company is offering their platinum coverage that supposedly covers everything, for about $2400 for an additional 50k miles or 5 years. (which ever comes first.)
??HOW MANY OF YOU HAVE PURCHASED ONE?? IS THIS A GOOD DEAL?? Should I not get it ? $2400 is a lot of money!
People keep scaring me with statements such as, "Oh man those cars are SO expensive to fix."... "Even more expensive than a German cars."..."You better hope nothing happens to it!" ...blah blah BLAH..
Is this make/model unlikely to need any major repairs in the next 5 years as long as you keep up with the maintenance?
A company is offering their platinum coverage that supposedly covers everything, for about $2400 for an additional 50k miles or 5 years. (which ever comes first.)
??HOW MANY OF YOU HAVE PURCHASED ONE?? IS THIS A GOOD DEAL?? Should I not get it ? $2400 is a lot of money!
#4
Racer
iTrader: (2)
There are tons and tons of threads discussing this very question:
https://www.clublexus.com/forums/is-...need-help.html
https://www.clublexus.com/forums/is-...-warranty.html
https://www.clublexus.com/forums/is-...50k-miles.html
https://www.clublexus.com/forums/is-...250-47-6k.html
https://www.clublexus.com/forums/is-...e-options.html
https://www.clublexus.com/forums/is-...-warranty.html
Here are my thoughts on the general question "Should I buy a warranty?": https://www.clublexus.com/forums/6288224-post18.html
This question can only be answered by you, according the criteria and questions I posed in the thread above. But if you ask my personal opinion, yes, you should get an extended warranty. Some of the known issues on your model and year are 1) cam gear TSIB, which costs $1600 to fix (could have already been performed, you should go to Lexus.com and put in your VIN to get the service history to see), 2) nav screen failure, which is less common, but can cost over $2000, 3) gauge needle lights going on, which costs over $1000.
Point is Lexus repairs and parts are very expensive. It's nice peace of mind. That said, I agree with you that I probably wouldn't buy at $2400, but that's because I don't think that's a good price - someone else can offer better. Though, as I stated above, since you're out of the factory warranty, I don't see why you're able to buy an extended warranty at all.
#6
Lexus Test Driver
iTrader: (12)
I bought my '07 IS350 with 49k, my third party dealer offered me a 3 year warranty, same as the 4 year original for $1,800 but I declined. So far, close to a year of having this car and no problems other than recalls. It's all up to the person, I've never bought warranties ever in my life and it's paid off so far.
#7
Lexus Test Driver
the general rule with a warranty is that if you think you wont have the extra cash to pay for the breakage at the time it occurs, get the warranty.
If you are financially stable, and could afford a repair for thousands at a time, dont get the warranty. Because if when you get the warranty, it could be that you never have a problem, and you've wasted your money outright.
Lexus's are good cars and very reliable compared to their german counterparts, but they do have their own little problems. You plan on keeping the car for along time or swapping out in a couple years?
all things to consider before ploppin down cash for an unknown issue.
If you are financially stable, and could afford a repair for thousands at a time, dont get the warranty. Because if when you get the warranty, it could be that you never have a problem, and you've wasted your money outright.
Lexus's are good cars and very reliable compared to their german counterparts, but they do have their own little problems. You plan on keeping the car for along time or swapping out in a couple years?
all things to consider before ploppin down cash for an unknown issue.
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#8
Racer
iTrader: (2)
A warranty is just like insurance, and should only be approached from the perspective of pure economics.
What you're doing with a warranty is paying money up front to cover future repairs. As an example, say the cost of the warranty today is $1000 and it runs for 1 year. If you buy the warranty, you're assuming that you'll have repair costs during that 1-year warranty period that total more than the future value of that $1000. If you don't buy the warranty, you're assuming that the present value of your repair costs during the 1-year warranty period will total less than $1000.
So you're at the present point in time deciding if you should buy a 1-year warranty for $1000 (an example). Assume you can get a 5% return on your money if you invest it elsewhere, like in the stock market. And assume you think you're going to have a repair that costs $1100 toward the end of year 1 (but still within the warranty period). You have two options:
1) Invest your money in the stock market
2) Buy the warranty for $1000
In option 1, you forgo the warranty and invest in the stock market. In about one year, since the rate of return is 5%, you have $1000*1.05= $1050. The cost of the repair is $1100.
In option 2, you buy the warranty and forgo the investment, and the repair at the end of the year is $1100.
In both cases, you essentially "invested" $1000 up front. At the end of the 1 year, you had a cost of $1100. In option 1 in our example, you came up short, as the $1000 invested at 5% wasn't enough to cover the repair, and are out an extra $50 on top of the $1000 you invested on day 1. In option 2 however, you invested that $1000 and the warranty company pays the full $1100, so you're not out that extra $50.
In the example above, you come out ahead by buying the warranty. One could easily devise an example where the story is flipped and you end up spending more on the warranty than you would have on repairs if you'd just invested the money.
Neither option is "better" than the other, because 1) everyone's appetite for risk is different, and 2) everyone has different inherent assumptions of what repairs/costs will be needed when.
Hope this makes sense. But I wanted to correct the notion that it had anything to do with cash availability. It's silly to say that you should buy the warranty if "you don't think you'll have the cash available at the time breakage occurs". That's because if you DON'T buy the warranty, you'll have that SAME cash you'd have spent on the warranty available in the future (assuming you don't squander it elsewhere) to pay for the repair. It's not about cash - it's about present and future values.
#9
Lexus Fanatic
iTrader: (1)
If threevoIS can get you the real $0 deductible Lexus platinum warranty for cheap, buy that.
No only is it insurance against repairs, it's also a boost to resale value since it'll transfer to the next owner (assuming you don't plan to keep it longer than the warranty extension runs).
No only is it insurance against repairs, it's also a boost to resale value since it'll transfer to the next owner (assuming you don't plan to keep it longer than the warranty extension runs).
#10
Lexus Test Driver
but you guys are assuming there will be repairs...It's been my experience that whatever repairs are necessary are either NOT covered under said warranty OR no repairs where even necessary.
In this case, she throws away 2400 for nothing. You're right though, it is always a gamble.
I'm just not keen on giving someone else a bunch of my money when no problem even presents itself.
Hell, I'll sale you some volcano insurance right now, if you're so concerned about the unknown.
However, if you were going to get this warranty wrapped into your monthly note BECAUSE youd ont have the extra cash to pay for repairs, its a good idea. If you have say, 10k of cash at any given moment, why would you potentially throw 1/4 of that away at the get go and end up not needing repairs at all?
I dont suppose you've ever heard of SELF auto insurance?? Whereby you have enough cash on hand to handle a collision and consequent medical bills for all parties involved?? Quite a few people opt for this route (who can afford it), without having to pay a premium that likely harldly ever gets used.
In this case, she throws away 2400 for nothing. You're right though, it is always a gamble.
I'm just not keen on giving someone else a bunch of my money when no problem even presents itself.
Hell, I'll sale you some volcano insurance right now, if you're so concerned about the unknown.
However, if you were going to get this warranty wrapped into your monthly note BECAUSE youd ont have the extra cash to pay for repairs, its a good idea. If you have say, 10k of cash at any given moment, why would you potentially throw 1/4 of that away at the get go and end up not needing repairs at all?
I dont suppose you've ever heard of SELF auto insurance?? Whereby you have enough cash on hand to handle a collision and consequent medical bills for all parties involved?? Quite a few people opt for this route (who can afford it), without having to pay a premium that likely harldly ever gets used.
#11
If threevoIS can get you the real $0 deductible Lexus platinum warranty for cheap, buy that.
No only is it insurance against repairs, it's also a boost to resale value since it'll transfer to the next owner (assuming you don't plan to keep it longer than the warranty extension runs).
No only is it insurance against repairs, it's also a boost to resale value since it'll transfer to the next owner (assuming you don't plan to keep it longer than the warranty extension runs).
#12
but you guys are assuming there will be repairs...It's been my experience that whatever repairs are necessary are either NOT covered under said warranty OR no repairs where even necessary.
In this case, she throws away 2400 for nothing. You're right though, it is always a gamble.
I'm just not keen on giving someone else a bunch of my money when no problem even presents itself.
Hell, I'll sale you some volcano insurance right now, if you're so concerned about the unknown.
However, if you were going to get this warranty wrapped into your monthly note BECAUSE youd ont have the extra cash to pay for repairs, its a good idea. If you have say, 10k of cash at any given moment, why would you potentially throw 1/4 of that away at the get go and end up not needing repairs at all?
I dont suppose you've ever heard of SELF auto insurance?? Whereby you have enough cash on hand to handle a collision and consequent medical bills for all parties involved?? Quite a few people opt for this route (who can afford it), without having to pay a premium that likely harldly ever gets used.
In this case, she throws away 2400 for nothing. You're right though, it is always a gamble.
I'm just not keen on giving someone else a bunch of my money when no problem even presents itself.
Hell, I'll sale you some volcano insurance right now, if you're so concerned about the unknown.
However, if you were going to get this warranty wrapped into your monthly note BECAUSE youd ont have the extra cash to pay for repairs, its a good idea. If you have say, 10k of cash at any given moment, why would you potentially throw 1/4 of that away at the get go and end up not needing repairs at all?
I dont suppose you've ever heard of SELF auto insurance?? Whereby you have enough cash on hand to handle a collision and consequent medical bills for all parties involved?? Quite a few people opt for this route (who can afford it), without having to pay a premium that likely harldly ever gets used.
My 2007 IS350 had 2 shot fuel injectors - 1 direct and 1 port @ 65,000km thats 41k miles. You know how much the dealership wanted for 1 direct fuel injector? $650 and for the port injector? $350 and 2.5 hours of labor @ $130/hr. Do the math... the price of extended warranty is nothing compared to the sum cost of a few engine repairs from Lexus. You're driving your car everyday, which means your active parts WILL fail as your car ages. You may see it as a waste, I see it as peace of mind protection not only from Lexus' ridiculous labor charges but their ridiculous parts charges, not to mention the resale value of your car increases as its transferable to the next owner should you sell. I realize that this issue may have occured on my car and that it doesn't mean it will apply on yours in the same time frame, but why gamble on the assumption that all cars and the parts used are built exactly the same? For all you know a key non-lubricated engine component may fail tomorrow and then what? Try not to feel sorry when Lexus powertrain doesn't bail you out.
To the OP, in my honest opinion, it's worth it to get warranty. If not for peace of mind, it's for protection against Lexus' ridiculous parts prices. I mean seriously, $40 for 1 Denso iridium spark plug from my dealership.... how do you justify that? How about this, my Toyota branded 18" 5 double spoke stock chrome wheel........$1000/wheel! I picked up 4 oem, triple plated chromes from a vendor in California for $1000 shipped to Canada.
#13
Lexus Fanatic
iTrader: (1)
I'm not personally... I'm assuming it'll pay for itself in resale alone....but I'm also only recommending folks get it if they can get the Lexus one, at the DISCOUNTED price (which is a lot less than $2400) that folks like Jerry Johnson sell it for.
But it's even better if there's any repairs.
How do you figure? the Lexus warranty is pretty comprehensive...
The gauge needle repair alone (fairly common on 4-5 year old ISes from the threads I've seen) is $1000+ at a dealer. Covered under warranty.
Ditto the $2500+ touchscreen failure on the nav screens at a similar age.
Or the $800 a pop ML subs that some folks have been through 2-3 of already, under warranty.
While none of these are "OMG! the engine fell out of the car!" type failures they're hardly uncommon ones on the 2IS, and they're all stupid expensive to pay a dealer for if you're out of warranty.
After it presents it's too late :P
If I'd previously seen a bunch of folks with homes on the same piece of land report how their homes were destroyed by volcanos, and the insurance was not only a relatively tiny bit of the cost of the house but would bump the resale of the house by about as much as the cost and transfer to the next owner, I'd be all over it.
But it's even better if there's any repairs.
How do you figure? the Lexus warranty is pretty comprehensive...
The gauge needle repair alone (fairly common on 4-5 year old ISes from the threads I've seen) is $1000+ at a dealer. Covered under warranty.
Ditto the $2500+ touchscreen failure on the nav screens at a similar age.
Or the $800 a pop ML subs that some folks have been through 2-3 of already, under warranty.
While none of these are "OMG! the engine fell out of the car!" type failures they're hardly uncommon ones on the 2IS, and they're all stupid expensive to pay a dealer for if you're out of warranty.
After it presents it's too late :P
If I'd previously seen a bunch of folks with homes on the same piece of land report how their homes were destroyed by volcanos, and the insurance was not only a relatively tiny bit of the cost of the house but would bump the resale of the house by about as much as the cost and transfer to the next owner, I'd be all over it.
#14
Racer
iTrader: (2)
If you are a person who assumes no repairs will be needed, this discussion is moot, move on. You wouldn't even consider buying a warranty.
The Lexus extended warranties are exclusionary, meaning they cover essentially everything except maintenance and trim items. These warranties virtually guarantee you won't run into an issue of a repair NOT being covered. As far as situations where no repairs are necessary, congratulations sir, you're very lucky. Most of us, however, have run into situations where repairs are needed on our cars. These repair costs are not always high enough to justify the up-front price of a warranty. But often they are.
Of course there are scenarios where someone buys a warranty and never uses it because no repairs are needed. I stated that in my post above. But no one I know can see the future. Like I stated above, warranties and insurance are to hedge risk. If someone buys a $2400 warranty and never has a single car repair, then that person has paid $2400 to hedge against risk; he or she has not "thrown it away". The scenario that occurred for that particular person is that no repairs were needed. There are myriad other scenarios that could just as easily have occurred that would have resulted in many car repairs needed, which would have made much more use of the warranty.
One would only be "throwing away" money on a warranty if he or she knew 100% that they'd never need to use it.
But if I take your statement for what I think you meant, you mean that you personally don't like handing over money to hedge against something that you're not certain will happen. That is the definition of being risk-loving. In not buying a warranty, you're saying you prefer to take the risk instead of paying to mitigate the risk. I am not judging you; this is a statement of fact. Being risk-averse is fine. But understand that every single person has a different taste for risk, and the majority of the U.S. population is risk-averse to some degree.
You might think a Lexus or some other type of car is very reliable. That might be the case. And you might never need a car repair. But simply by owning a car, you are exposing yourself to the risk of car repairs. How you manage or do not manage that risk is totally up to you based on your risk preference. But the only way you could draw a parallel to volcano insurance is if you restricted your audience to those living near an active volcano, because those are the only people at risk.
Do you have a car or home insurance policy? Then you're hedging risk. Car warranties are the exact same thing.
I dont suppose you've ever heard of SELF auto insurance?? Whereby you have enough cash on hand to handle a collision and consequent medical bills for all parties involved?? Quite a few people opt for this route (who can afford it), without having to pay a premium that likely harldly ever gets used.
Yes, I have heard of "self-insuring" yourself against car repairs. That's exactly what option 1 is above - investing your money in the stock market (you could replace this with anything you want; money market account, shoebox, etc) and using it when needed on car repairs.
And your assumption that a premium "likely hardly ever gets used" is one that is far from universal. I'll bet despite your beliefs, you can name quite a few people you know who have taken advantage of an insurance policy. Maybe they were in a car accident. Maybe their house was blown away in a tornado. In either case, if they had insurance, they were covered, and paying their premiums allowed the vast majority of their incurred loss to be fully covered by a third-party. That is the essence of hedging risk.
To sum up, I'm not saying someone who bought a warranty is right or wrong when compared to someone who didn't. Upon close reading of my posts, you'll understand that. If I do advocate buying a warranty, it's with the preface that it's my personal opinion. Each person should decide this for him- or herself, based on his or her preference for risk.
Last edited by calvin2376; 06-28-11 at 12:55 PM.
#15
Lexus Test Driver
dually noted about personal opinion.
BTW, guys, I'm not wholly licensed to sell volcano insurance either....so if you couldnt tell, that was a joke. And it was meant for volcano insurance in the continental US.
Regardless, it is personal opinion and you'll neither be right nor wrong in purchasing an extended warranty. Just dont expect PLATINUM coverage to cover things you'd expect.
I have the "platinum" coverage and have been declined multiple times on items I consider by workmanship (not wear and tear) but are not covered.
One for instance, is the chrome window strips. They were pitting and peeling something horrible but they are not covered. Woulda been great to be able to use my warranty, but alas, I could not.
In another instance, my wifes GMC also has an extended "platinum" coverage that included the a/c and related parts and, low and behold, the ac quit working. Because they were able to trace it down to a blown ac relay within the evaporator housing, they didnt cover it. Not included....period.
Also keep in mind that Lexus Certified Preowneds are an inclusionary policy. It lists the components and parts that are covered by the warranty. If the component or part is not listed, then it is not covered.
Look, regardless what some bozos on the internet tell you (me included), be confident in your vehicle purchase by fully examining the vehicle for any type of issue. Buy a warranty or dont buy it, but you'll probably still end up spending the money on the car one way or another.
BTW, guys, I'm not wholly licensed to sell volcano insurance either....so if you couldnt tell, that was a joke. And it was meant for volcano insurance in the continental US.
Regardless, it is personal opinion and you'll neither be right nor wrong in purchasing an extended warranty. Just dont expect PLATINUM coverage to cover things you'd expect.
I have the "platinum" coverage and have been declined multiple times on items I consider by workmanship (not wear and tear) but are not covered.
One for instance, is the chrome window strips. They were pitting and peeling something horrible but they are not covered. Woulda been great to be able to use my warranty, but alas, I could not.
In another instance, my wifes GMC also has an extended "platinum" coverage that included the a/c and related parts and, low and behold, the ac quit working. Because they were able to trace it down to a blown ac relay within the evaporator housing, they didnt cover it. Not included....period.
Also keep in mind that Lexus Certified Preowneds are an inclusionary policy. It lists the components and parts that are covered by the warranty. If the component or part is not listed, then it is not covered.
Look, regardless what some bozos on the internet tell you (me included), be confident in your vehicle purchase by fully examining the vehicle for any type of issue. Buy a warranty or dont buy it, but you'll probably still end up spending the money on the car one way or another.