Prepaid Maintenance & Extended Warranties - Pricing/Questions/What is covered?
01-02-11, 08:07 PM
#16
Pole Position
Thread Starter
What do you mean by self insuring? If it means putting some money away for repairs, I don't know but it will never work for me. Lexus warranty just doesn't include repairs as you probably know, it also covers unlimited towing which may be costly if you are away and many other things. Wether Lexus profit or not from their extended warranties really doesn't concern me, as long as I have peace of mind knowing that I have good coverage in case I need it. Hopefully, because you never know, I'll never have to use it, which I think is kind of stupid to think I will never have to use it, particularly after the 50k or 4years run out. No matter how good and reliable the vehicle is, you'll end up needing repairs that will cost you with a vehicle like the GX. I've heard horror stories of people purchasing expensive vehicles and not getting an extended warranty, and after the basic warranty runs out, the vehicle needs repairs and they pay an arm an a leg to get it fixed. Everybody knows it's expensive to get the car fixed at the dealer, if you don't have a warranty you'll probably pay less by bringing your $65k truck to your local mechanic and let him put after market parts and fixing it for less. I rather have the dealer fix it, I know is fixed right with the right parts and if is not fixed right I can bring as many times as I want until is fixed. So, wether Lexus or any other car manufacturer profits from extended warranties they'll still get my business.
Last edited by MickeyS; 01-02-11 at 08:13 PM.
01-03-11, 07:06 AM
#17
My understanding about extended warranties is they are 50-80% profit. So, if an extended warranty cost you $3,000, Lexus decided their average cost of repairs in providing the warranty was $600-$1500. Do you have the $600-$1500 to cover those repairs yourself? If you do (you should if you are buying a GX in the first place), you are probably better off self-insuring and saving your hard earned money that would just be profit to Lexus and the dealership. Unless buying the Lexus made your budget tight, if you have the cash onhand and a great car manufacturer like Lexus, you will mostly likely come out ahead self-insuring.
Anyone who can afford a Lexus GX 460 can also afford to self-insure, but would anyone want a Lexus without a warranty? Obviously not, which is why Lexus and all other car manufacturers include warranties. Therefore, why would anyone want a Lexus without a warranty if a warranty is available?
The value of a warranty is much more than how much you can get out of it vs. how much it costs. Rather than the cost of warranty vs. the cost of repairs, consider the peace of mind of knowing that someone else "owns the problem". It is the same reason that we buy fire insurance, life insurance and other forms of "risk sharing" ... we may be able to afford to go without, but why shoulder that burden if the risk can be shared with others?
There are obvious situations where risk sharing is ill-advised ... for example, carrying collision insurance on an old car that is worth less than the policy will pay. However, we are discussing new cars that are expensive, complex and ultimately imperfect ... at what point would we "go naked" and have no warranty? I respectfully suggest ... never.
Regards,
SaniDel
P.S. Let's not forget that the extended warranty is pro-rated ... you will only pay for the amount of time you use, which makes it even a better deal than the original warranty!
01-03-11, 07:50 AM
#18
Pole Position
Thread Starter
Thanks for a well written summary, the bottom line is that an extended warranty is an important aspect of your vehicle's protection which should never be ignored.
01-03-11, 04:07 PM
#20
Lexus Test Driver
I agree with the Expensive cars--no matter what brand its good to have the ext warrety cause more than likely one repair is going to offset what you paid. With parts prices thru the roof and Labor at over $100 and hour! But as it always happens what breaks is not covered under your warrety....lol!!
I dont have Ext warranty yet--I will decide at my 4 year mark to see if I even have the same vehicle
I dont have Ext warranty yet--I will decide at my 4 year mark to see if I even have the same vehicle
01-03-11, 04:33 PM
#21
Pole Position
Thread Starter
I had a 2003 4runner, which I took excellent care. It served me great, I had an extended warranty and had to use it a few times, a couple of times for O2 sensors one for brake calipers and one for an ac leak. That warranty was worth it. The 4runnner was a a great truck however those little things added up.
01-04-11, 07:30 AM
#23
Did we get eight months of value from our extended warranty? Probably not as the cost of repairs were less than eight months worth of warranty. However, the costs could have been much more and they would have been covered. More to the point ... the benefit of a warranty is much more than a "cost benefit analysis" of the price of the warranty vs. what it paid for repairs! Would anyone consider fire insurance the same way? Let's see ... if it's just a small kitchen fire I can repair it for less than the price of fire insurance ... but what if the whole house burns? ;-)
Modern vehicles are complex, expensive and difficult to repair. Until Lexus succeeds in their "pursuit of perfection" and produces a vehicle that never needs repair, a warranty is an important part of the value proposition.
Regards,
SaniDel
P.S. I hasten to add that although we paid $2,400 for a three-year extended warranty on a four-year old vehicle, when we decided to trade it for the 2010 GX we received a refund for the unused portion ... a check from Toyota for over $1,600.
Last edited by SaniDel; 01-04-11 at 07:42 AM.
01-04-11, 07:28 PM
#24
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Interesting discussion, but I don't agree with the extended warranty stuff. I dont' think it is a good deal. Before the Lexus GX460 I bought last Friday, I purchased 2 Toyota Camrys and 1 Honday Civic in the past. I never took either of the Camry's into a shop once (my current 2003 Camry has 75,000 miles on it), and the Honda has been in 2 times (post 100,000 miles), but the repairs were minor and didn't amount to $1000 combined (it now has 150,000 miles on it--still runs and looks great, though I'll be selling it within the week as the Lexus is replacing it.)
Some won't like this, but straight out of the famous book "The Millionaire Next Door", statistics show that those who typically purchase expensive cars do not in fact have high net worths (or lots of cash on hand), but tend to have high incomes and high debt loads making big payments on prestige cars and homes. So, if one is low on cash savings and seeing all their income flow mostly into servicing debt payments, it is understandable why one could be scared into purchasing "car problem insurance".
If on the other hand one saved up, paid cash for their car, and had substantial savings set aside before buying a $60k car (and really, isn't that what everyone should be doing if they are handling their personal finances properly?), then there really is no need or worry for "car problem insurance".
If the extended warranty is $3,000, and 50% commision to the dealer, that means Toyota estimated I'll have $1500 of problems through my extended warranty period. I like my odds. I'll just make sure my family emergency fund has enough to cover $1500 of possible (but unlikely with the Lexus) car problems and keep the other $1500 in my bank account--or blow it on a new car to replace my 2003 Camry!
Sames rules apply to any type of insurance. What is the cost of the insurance relative to your financial exposure to the risk? With "car problem insurance" and Lexus, I think my risk is extremely low, and not worth the cost of the insurance. With health insurance, there is a decent risk that a severe health problem could wipe out or put a big dent in my family finances, so you bet I have health insurance, but I have the highest deductible possible ($5,000) and that gives me the lowest possible monthly premium. I just pay cash my visits which amount to less than $500/year (knock on wood) are nowhere near my deductible. At one point I no longer saw the point of carrying long term disability or life insurance. If your family can survive comfortably on the assets you have if you die, then why on earth are you spending $100/month on a life insurance policy? Spend it on something else. That is what self-insuring is all about.
Some won't like this, but straight out of the famous book "The Millionaire Next Door", statistics show that those who typically purchase expensive cars do not in fact have high net worths (or lots of cash on hand), but tend to have high incomes and high debt loads making big payments on prestige cars and homes. So, if one is low on cash savings and seeing all their income flow mostly into servicing debt payments, it is understandable why one could be scared into purchasing "car problem insurance".
If on the other hand one saved up, paid cash for their car, and had substantial savings set aside before buying a $60k car (and really, isn't that what everyone should be doing if they are handling their personal finances properly?), then there really is no need or worry for "car problem insurance".
If the extended warranty is $3,000, and 50% commision to the dealer, that means Toyota estimated I'll have $1500 of problems through my extended warranty period. I like my odds. I'll just make sure my family emergency fund has enough to cover $1500 of possible (but unlikely with the Lexus) car problems and keep the other $1500 in my bank account--or blow it on a new car to replace my 2003 Camry!
Sames rules apply to any type of insurance. What is the cost of the insurance relative to your financial exposure to the risk? With "car problem insurance" and Lexus, I think my risk is extremely low, and not worth the cost of the insurance. With health insurance, there is a decent risk that a severe health problem could wipe out or put a big dent in my family finances, so you bet I have health insurance, but I have the highest deductible possible ($5,000) and that gives me the lowest possible monthly premium. I just pay cash my visits which amount to less than $500/year (knock on wood) are nowhere near my deductible. At one point I no longer saw the point of carrying long term disability or life insurance. If your family can survive comfortably on the assets you have if you die, then why on earth are you spending $100/month on a life insurance policy? Spend it on something else. That is what self-insuring is all about.
01-04-11, 07:40 PM
#25
Racer
by the time the extended warranty takes effect, gas will be well over 5 bucks a gallon, lets see how many of us are left here still with this gx or will be driving something else?
01-05-11, 07:14 AM
#26
Pole Position
Thread Starter
You may not like extended warranties or any other warranty and most likely don't have one on your GX, so wait until you to bring your GX for repairs and your hard earned saved money will take care of it! Fortunately I have a great job, paid for my truck in cash and save money, but I use my cash for cruises and vacations and other things that are more important than the GX. Every one saves and uses their cash differently, I spent some cash on the extended warranty so I don't have to worry for seven years that the cash I saved for my cruise has to be used for repairs.
01-05-11, 10:20 AM
#27
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MikeyS: I'm totally with you on the cruises and vacations. I'll be on the Disney Dream with the family at the the end of May! Anyway, so we percieve the risk/cost ratio differently, no biggie.
01-05-11, 02:17 PM
#28
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Interesting discussion, but I don't agree with the extended warranty stuff. I dont' think it is a good deal. Before the Lexus GX460 I bought last Friday, I purchased 2 Toyota Camrys and 1 Honday Civic in the past. I never took either of the Camry's into a shop once (my current 2003 Camry has 75,000 miles on it), and the Honda has been in 2 times (post 100,000 miles), but the repairs were minor and didn't amount to $1000 combined (it now has 150,000 miles on it--still runs and looks great, though I'll be selling it within the week as the Lexus is replacing it.)
Some won't like this, but straight out of the famous book "The Millionaire Next Door", statistics show that those who typically purchase expensive cars do not in fact have high net worths (or lots of cash on hand), but tend to have high incomes and high debt loads making big payments on prestige cars and homes. So, if one is low on cash savings and seeing all their income flow mostly into servicing debt payments, it is understandable why one could be scared into purchasing "car problem insurance".
If on the other hand one saved up, paid cash for their car, and had substantial savings set aside before buying a $60k car (and really, isn't that what everyone should be doing if they are handling their personal finances properly?), then there really is no need or worry for "car problem insurance".
If the extended warranty is $3,000, and 50% commision to the dealer, that means Toyota estimated I'll have $1500 of problems through my extended warranty period. I like my odds. I'll just make sure my family emergency fund has enough to cover $1500 of possible (but unlikely with the Lexus) car problems and keep the other $1500 in my bank account--or blow it on a new car to replace my 2003 Camry!
Sames rules apply to any type of insurance. What is the cost of the insurance relative to your financial exposure to the risk? With "car problem insurance" and Lexus, I think my risk is extremely low, and not worth the cost of the insurance. With health insurance, there is a decent risk that a severe health problem could wipe out or put a big dent in my family finances, so you bet I have health insurance, but I have the highest deductible possible ($5,000) and that gives me the lowest possible monthly premium. I just pay cash my visits which amount to less than $500/year (knock on wood) are nowhere near my deductible. At one point I no longer saw the point of carrying long term disability or life insurance. If your family can survive comfortably on the assets you have if you die, then why on earth are you spending $100/month on a life insurance policy? Spend it on something else. That is what self-insuring is all about.
Some won't like this, but straight out of the famous book "The Millionaire Next Door", statistics show that those who typically purchase expensive cars do not in fact have high net worths (or lots of cash on hand), but tend to have high incomes and high debt loads making big payments on prestige cars and homes. So, if one is low on cash savings and seeing all their income flow mostly into servicing debt payments, it is understandable why one could be scared into purchasing "car problem insurance".
If on the other hand one saved up, paid cash for their car, and had substantial savings set aside before buying a $60k car (and really, isn't that what everyone should be doing if they are handling their personal finances properly?), then there really is no need or worry for "car problem insurance".
If the extended warranty is $3,000, and 50% commision to the dealer, that means Toyota estimated I'll have $1500 of problems through my extended warranty period. I like my odds. I'll just make sure my family emergency fund has enough to cover $1500 of possible (but unlikely with the Lexus) car problems and keep the other $1500 in my bank account--or blow it on a new car to replace my 2003 Camry!
Sames rules apply to any type of insurance. What is the cost of the insurance relative to your financial exposure to the risk? With "car problem insurance" and Lexus, I think my risk is extremely low, and not worth the cost of the insurance. With health insurance, there is a decent risk that a severe health problem could wipe out or put a big dent in my family finances, so you bet I have health insurance, but I have the highest deductible possible ($5,000) and that gives me the lowest possible monthly premium. I just pay cash my visits which amount to less than $500/year (knock on wood) are nowhere near my deductible. At one point I no longer saw the point of carrying long term disability or life insurance. If your family can survive comfortably on the assets you have if you die, then why on earth are you spending $100/month on a life insurance policy? Spend it on something else. That is what self-insuring is all about.
I agree with you 100% extended warranties are pure profit and in most cases a ripoff.
This issue extends to when purchasing electronics at Best Buy for example the sales person, the cashier all attemp to push an extended warranty on you,why...it is pure profit.
The majority of repairs needed on a highly reliable brand like Lexus is low cost non catastropic in nature like a dead battery...
What would cost more than $3,000 to repair that is not a powertrain item?
The powertrain has a 72 month/70,000 mile warranty in place and what is the likelyhood of being hit with a major repair exceedeing $3,000 twice on a lexus?
If We were discussing a brand like Land Rover I would consider an extended warranty, I don't drive a Rover because the RISK of breakdown is high.
I do not get the vibe you are telling anyone how to spend thier money and neither am I.
Best of both worlds would be to wait until the base warranty is close to being done and if you still love your GX buy an extended warranty then.
Everyone has a different warm and fuzzy for some knowing thier vehicle has a warranty in place, for others it is $$$ in the bank.
BTW,
I own my own successful business and a risk taker by nature...
02-06-12, 05:31 PM
#29
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Lexus OEM Extended Warranty?
Hi guys!
We didn't get the extended warranty when we bought GX since we were not sure how long we gonna keep it. Now the decision is to drive it for another 3-4 years till 100k, since we like it and had only one issue that was corrected.
So it's getting close to 40k and it's time to shop around for extended warranty for the peace of mind since we have one of the first models.
Can anyone suggest who is selling those for cheap? 100k or 6 years. I know the dealer does, but I am sure that would be the worst price available.
Thx
We didn't get the extended warranty when we bought GX since we were not sure how long we gonna keep it. Now the decision is to drive it for another 3-4 years till 100k, since we like it and had only one issue that was corrected.
So it's getting close to 40k and it's time to shop around for extended warranty for the peace of mind since we have one of the first models.
Can anyone suggest who is selling those for cheap? 100k or 6 years. I know the dealer does, but I am sure that would be the worst price available.
Thx
02-06-12, 06:51 PM
#30
Lead Lap
I would buy it from Jerry Johnson at Midwest Toyota (1-800-530-5789). I bought the 8 year/100k mile Platinum warranty no deductible for less than $2,500. Just remember when you look at the number of years, you have to add in the initial warranty period so the 8 year warranty is really only for an additional 4 years after the initial 4 year/50k mile warranty. He provides great customer service and will explain exactly how the warranty works and what it covers. Many members here have used him. Also, if you get rid of the vehicle, you can get a prorated refund based on the time/miles left on the warranty and he will help you through this process when the time comes.
