$1800 for 7/100K Lexus Warranty..Good price?
05-31-08, 07:51 AM
#32
Extended warranties are bets that something will happen to your car within the warranty period that will cost at least as much to fix as the value of the warranty. Not a good bet on a Lexus.
Dealers consider these pure profit items, and laugh all the way to the bank. They really get a kick out of it when someone haggles for hours over the price of the car, and then drops $2k on an intangible like this that will probably never get used.
It's your money, but realize that the dealer wouldn't sell extended warranties if they were losing money on them. In other words, odds are that you're much better off banking that money and using it if ever needed for a repair.
Dealers consider these pure profit items, and laugh all the way to the bank. They really get a kick out of it when someone haggles for hours over the price of the car, and then drops $2k on an intangible like this that will probably never get used.
It's your money, but realize that the dealer wouldn't sell extended warranties if they were losing money on them. In other words, odds are that you're much better off banking that money and using it if ever needed for a repair.
The -dealer- is happy to sell you a warranty for $2000 that he pays Lexus the invoice cost of $1300 or so on. That's $700 pure profit for him. No brainer. If you run up $20,000 in warranty repairs it STILL doesn't cost the dealer a dime and he's up $700.
That doesn't tell you if the warranty is a good deal or not though.
But Lexus corporate probably does some pretty fancy math to figure out the invoice cost is at least a marginal profit maker for THEM... and given traditional Lexus quality they figured out that at $1300 they're not likely to lose money.
Thing is, when you can get it for nearly the invoice price, you're risking a lot less than when you're paying $700 over.
And as noted not only has Toyota quality in general slipped a bit lately, the cost of a Lexus repair is VERY high.
Lexus still leads the industry in quality, but it's not as huge a lead as it used to be. If I can lock in 3 more years of coverage for just a couple percent higher than what Lexus figured was the historical "break even" for them, that's a pretty small risk with a decent upside if I have at least one repair in years 5, 6, or 7... and a HUGE potential upside if I have more than one.
05-31-08, 09:16 AM
#33
Not to mention when you finance the cost of the extended warranty and pay over time. Not a good value... But, it depends on what some people think 'peace of mind' is worth. I'd rather pay to fix it when it breaks. I've never regreted not buying an extended warrenty. And I usually keep my cars a very long time.
05-31-08, 11:09 AM
#34
Not to mention when you finance the cost of the extended warranty and pay over time. Not a good value... But, it depends on what some people think 'peace of mind' is worth. I'd rather pay to fix it when it breaks. I've never regreted not buying an extended warrenty. And I usually keep my cars a very long time.
If I go with the 7/75k it'll run me about $8 a week during the 3 extra years... like 9 if I go with the 7/100.
Check out what Lexus charges for parts sometime... this isn't a chevy where you can have your local mechanic fix something for $50. I keep cars a long time too, and this is the first time I'm buying a factory extended warranty for one, despite the brands reliability.
05-31-08, 12:24 PM
#36
Lexus Test Driver
I understand that, but both the dealer and Lexus corporate stand to make a considerable amount of money on extended warranties, or they wouldn't sell them.
They're a good deal ONLY if the cost of repairs over the time period of the warranty exceeds the cost of the warranty, including finance costs, etc. Short of blowing your engine, you're probably wasting money that could be invested for use for car repairs down the line (if necessary).
Quality has slipped in terms of rattles, etc., but I don't hear people complaining about needing new engines, frying transmissions, etc. Hang out over at the BMW forum for awhile, and you'll get an idea of just how mechanically reliable our cars are.
All you really have to do is read most of our thread titles. People tend to post of they are unhappy or are having problems, and many of the threads here are about new wheels or photos. If there are mechanical threads, they're generally about a bad sound being addressed through a TSIB.
You can be sure that "invoice" for a warranty is way above historical break even. Invoice is the least amount they'll sell it for, which can have virtually any rationale. For all we know, invoice on a warranty product is statistical expectation of cost + 50%. Either way, it's all playing the odds, and everyone knows that the house always wins.
Anyway, isn't an extended warranty really betting against yourself? I'd be upset if I didn't have a problem within the extended warranty period, because then I'd know for sure that I wasted my money for "peace of mind". If we're all that risk averse, we may as well buy every possible type of insurance, because you never know.
The -dealer- is happy to sell you a warranty for $2000 that he pays Lexus the invoice cost of $1300 or so on. That's $700 pure profit for him. No brainer. If you run up $20,000 in warranty repairs it STILL doesn't cost the dealer a dime and he's up $700.
That doesn't tell you if the warranty is a good deal or not though.
That doesn't tell you if the warranty is a good deal or not though.
But Lexus corporate probably does some pretty fancy math to figure out the invoice cost is at least a marginal profit maker for THEM... and given traditional Lexus quality they figured out that at $1300 they're not likely to lose money.
Thing is, when you can get it for nearly the invoice price, you're risking a lot less than when you're paying $700 over.
And as noted not only has Toyota quality in general slipped a bit lately, the cost of a Lexus repair is VERY high.
Thing is, when you can get it for nearly the invoice price, you're risking a lot less than when you're paying $700 over.
And as noted not only has Toyota quality in general slipped a bit lately, the cost of a Lexus repair is VERY high.
All you really have to do is read most of our thread titles. People tend to post of they are unhappy or are having problems, and many of the threads here are about new wheels or photos. If there are mechanical threads, they're generally about a bad sound being addressed through a TSIB.
Lexus still leads the industry in quality, but it's not as huge a lead as it used to be. If I can lock in 3 more years of coverage for just a couple percent higher than what Lexus figured was the historical "break even" for them, that's a pretty small risk with a decent upside if I have at least one repair in years 5, 6, or 7... and a HUGE potential upside if I have more than one.
You can be sure that "invoice" for a warranty is way above historical break even. Invoice is the least amount they'll sell it for, which can have virtually any rationale. For all we know, invoice on a warranty product is statistical expectation of cost + 50%. Either way, it's all playing the odds, and everyone knows that the house always wins.
Anyway, isn't an extended warranty really betting against yourself? I'd be upset if I didn't have a problem within the extended warranty period, because then I'd know for sure that I wasted my money for "peace of mind". If we're all that risk averse, we may as well buy every possible type of insurance, because you never know.
Last edited by 15951; 05-31-08 at 12:28 PM.
05-31-08, 03:59 PM
#37
I owned a home for 7 years in one of the 5 lowest crime rate cities in the entire nation.
I still had homeowners insurance covering theft.
But seriously, have you ever priced anything for a Lexus?
I think you'll find a WHOLE LOT more repairs than a blown engine that'd cost more than $1200-ish bucks.
In fact with labor included I'd bet you'd find relatively -few- repairs that cost _less_ than that much.
Even moreso if you car has ML, or nav, or dynamic cruise, or a myriad of other expensive bits.
Heck you can find several blown ML sub threads just as one example, and that's a pretty minor repair people are having done, some more than once, just in the first year or two of ownership.
Nobody has owned a 2IS more than 3 years so far, so it's impossible to speculate what'll need fixing in years 5, 6, and 7... but having seen parts costs on a much simpler, and highly reliable, Lexus SC my wife owns, I'm more than happy to risk 8 bucks a week against the insanely high price of repairs on my much more advanced (and expensive to fix) 2IS.
If I'm wrong I'm out about the cost of a cheap lunch each week.
I still had homeowners insurance covering theft.
But seriously, have you ever priced anything for a Lexus?
I think you'll find a WHOLE LOT more repairs than a blown engine that'd cost more than $1200-ish bucks.
In fact with labor included I'd bet you'd find relatively -few- repairs that cost _less_ than that much.
Even moreso if you car has ML, or nav, or dynamic cruise, or a myriad of other expensive bits.
Heck you can find several blown ML sub threads just as one example, and that's a pretty minor repair people are having done, some more than once, just in the first year or two of ownership.
Nobody has owned a 2IS more than 3 years so far, so it's impossible to speculate what'll need fixing in years 5, 6, and 7... but having seen parts costs on a much simpler, and highly reliable, Lexus SC my wife owns, I'm more than happy to risk 8 bucks a week against the insanely high price of repairs on my much more advanced (and expensive to fix) 2IS.
If I'm wrong I'm out about the cost of a cheap lunch each week.
05-31-08, 04:04 PM
#38
I owned a home for 7 years in one of the 5 lowest crime rate cities in the entire nation.
I still had homeowners insurance covering theft.
But seriously, have you ever priced anything for a Lexus?
I think you'll find a WHOLE LOT more repairs than a blown engine that'd cost more than $1200-ish bucks.
In fact with labor included I'd bet you'd find relatively -few- repairs that cost _less_ than that much.
Even moreso if you car has ML, or nav, or dynamic cruise, or a myriad of other expensive bits.
Heck you can find several blown ML sub threads just as one example, and that's a pretty minor repair people are having done, some more than once, just in the first year or two of ownership.
Nobody has owned a 2IS more than 3 years so far, so it's impossible to speculate what'll need fixing in years 5, 6, and 7... but having seen parts costs on a much simpler, and highly reliable, Lexus SC my wife owns, I'm more than happy to risk 8 bucks a week against the insanely high price of repairs on my much more advanced (and expensive to fix) 2IS.
If I'm wrong I'm out about the cost of a cheap lunch each week.
I still had homeowners insurance covering theft.
But seriously, have you ever priced anything for a Lexus?
I think you'll find a WHOLE LOT more repairs than a blown engine that'd cost more than $1200-ish bucks.
In fact with labor included I'd bet you'd find relatively -few- repairs that cost _less_ than that much.
Even moreso if you car has ML, or nav, or dynamic cruise, or a myriad of other expensive bits.
Heck you can find several blown ML sub threads just as one example, and that's a pretty minor repair people are having done, some more than once, just in the first year or two of ownership.
Nobody has owned a 2IS more than 3 years so far, so it's impossible to speculate what'll need fixing in years 5, 6, and 7... but having seen parts costs on a much simpler, and highly reliable, Lexus SC my wife owns, I'm more than happy to risk 8 bucks a week against the insanely high price of repairs on my much more advanced (and expensive to fix) 2IS.
If I'm wrong I'm out about the cost of a cheap lunch each week.
You're right!
A discounted warranty cost mentioned on this thread is 4% or less of the cost of the vehicle.
Another nice thing is a warranty can be purchase right at the end of the factory warranty.No rush.
05-31-08, 05:10 PM
#39
Lexus Test Driver
I completely understand your point, and for you, it sounds like the warranty is worthwhile. I've had them on two other cars, and they ended up being wasted money because they were never used. That said, I can see how a large repair bill could change someone's mind.
Here's to hoping you never need to use it.
Here's to hoping you never need to use it.
06-01-08, 12:08 PM
#40
Just picked up my 08 IS250 RWD on May 23. Original price for the lexus 5/100K zero deductible platinum warranty was $1800. Price shopped between 3 dealers via phone and ultimately paid $1055 tax included. I figured it was worth the peace of mind. As I understood that was a couple hundred over invoice?
06-04-08, 10:13 PM
#41
Lead Lap
Join Date: May 2001
Location: CA
Posts: 518
Likes: 0
Received 0 Likes
on
0 Posts
I bought my 04' LS430 UL from Lexus of Valencia, they try to push the extended warranty on me for ~$2k. The original quote was $4k, and they try to make it seem like a great deal. I knew about Troy ahead of time, so I never bothered with their warranty. But I learned their not so honest business practice through that process.
On a side note, I had a very bad after sale experience with the Internet sales manager the day after. Complete change of attitude as soon as I drove the car off the lot. He will not return my repeated calls to make right a minor situation due to potential $200 cost to replace a tire until I had to reach out to the GM and lexus corporate. All the back and forth over a $200 tire after my $45k+ purchase. Pathetic and short sighted! I will never do business with them again.
To bring the post back on topic, I got my premium extended warranty through Troy at a much cheaper price. Can't recall exact cost, but it was way below $2k, and Troy was very easy to work with.
On a side note, I had a very bad after sale experience with the Internet sales manager the day after. Complete change of attitude as soon as I drove the car off the lot. He will not return my repeated calls to make right a minor situation due to potential $200 cost to replace a tire until I had to reach out to the GM and lexus corporate. All the back and forth over a $200 tire after my $45k+ purchase. Pathetic and short sighted! I will never do business with them again.
To bring the post back on topic, I got my premium extended warranty through Troy at a much cheaper price. Can't recall exact cost, but it was way below $2k, and Troy was very easy to work with.
that price seems pretty good. just make sure it is an OFFICIAL Lexus warranty.
when i bought my 1st lexus (is300) i bought the extended warranty but i was lied to by the salesman at Lexus of Valencia. the warranty was not a lexus warranty despite the fact that i was assured that i was buying the lexus gold warranty. this caused headaches when getting certain things replaced and ended up costing me a lil more when repairs were needed.
when i bought my 1st lexus (is300) i bought the extended warranty but i was lied to by the salesman at Lexus of Valencia. the warranty was not a lexus warranty despite the fact that i was assured that i was buying the lexus gold warranty. this caused headaches when getting certain things replaced and ended up costing me a lil more when repairs were needed.
12-03-09, 05:05 PM
#42
Driver School Candidate
Join Date: Dec 2009
Location: AZ
Posts: 1
Likes: 0
Received 0 Likes
on
0 Posts
Toby is the Man
Hey guys-
If you are looking for a lexus warranty, Toby will give you the best price hands down. No hassling. Quick 5 minute call and it's done. Thanks Toby for the smoking deal.
Who Dat!!
If you are looking for a lexus warranty, Toby will give you the best price hands down. No hassling. Quick 5 minute call and it's done. Thanks Toby for the smoking deal.
Who Dat!!
12-03-09, 07:03 PM
#45
Lexus Test Driver
Ex. -- You bought the car on 1/1/2008, and bought an extended warranty today that is 7 years. The warranty runs out 1/1/2015, not 7 years from today's date.
Reason #6549881 extended warranties are for suckers and people with very bad luck. This is no different than paying to extend the coverage on your new LCD tv...it's a gamble against yourself, and you almost always lose.