azipod

just know that some extended warrantys (i.e. Service contracts) do not cover these items. It all depends on the policy.

there are very few extended Warranties that actually mirror the factory coverage.... even CPO.

azipod

i didn't scan this carefully but I don't think the items such as BSM and parking sensors are items that are covered under their "extended warranty."

https://www.sc.toyotafinancial.com/web/lfs/pub/contents/vsa/LFS_VSA_LCertified_Digital_Brochure.pdf

Poppa

I had an extended warranty on my 2007 Avalon. In 2012 the compressor on my a/c went out. Took it to Toyota, they contacted the extended warranty company and said they needed to replace the compressor... extended warranty company sent a rep. to the toyota shop who looked it over and promptly denied the claim. Submitted another claim with the ext. warranty people, denied again. I pitched a fit with the gm of the toyota dealership making sure he remembered it was his dealership that sold me that warranty.. Ended up with Toyota fronting the bill for the compressor. But the extended warranty was useless....

Brent1944

So a Toyota Dealer was selling 3rd Party Warranties? AND why would they have to send someone to look at it? Do they not believe the dealer?..Not all things are covered either, not saying your compressor wasnt, but some policies dont cover everything.

roninlexus

I think just like any insurance company (home, auto etc.) there is a whole group of people who's job it is to compare claims to policy and deny whatever possible. Fortunately, I have never had to test this out but I'm sure it's frustrating. Supposedly, here is a list of what is NOT covered on mine. However who knows whats hidden elsewhere:

Brake linings, brake drums and rotors, disc brake pads, standard manual transmission clutch friction disc, pressure plate, pilot bearings, throw-out bearing and arm, air bags, solar powered devices, hinges, glass, lenses, sealed beams, body parts and/or panels, weather stripping, trim, moldings, door handles, lock cylinders, tires, wheels, all batteries except Hybrid/EV/Hydrogen High Voltage batteries as listed under Silver Coverage, light bulbs, upholstery, paint, bright metal, freeze plugs, filters, heater and radiator hoses, exhaust system, catalytic converter, shock absorbers, constant velocity joint boots, steering and suspension joint boots, work such as front-end alignment or wheel balancing (except when required in conjunction with a mechanical breakdown), safety restraint systems, audio/security or other system not factory installed, cellular phones, radar detectors, appliances, or vinyl and convertible tops.

lesz

When you look at the list of items that are not covered, those items, which they are considering to be "wear and tear" items, include many of the repairs that might commonly be needed. Then, consider that, after the factory bumper-to-bumper warranty expires, you still have the power train warranty that lasts for 6 years and up to 70,000 miles, and that power train warranty covers the engine, transmission, and the components of the fwd system. Thus, when you add together the things that the extended warranty excludes and the items that are still covered by the factory power train warranty, the company that sells the extended warranty doesn't have to be concerned about ever having to pay a claim for a significant share of possible items that might ever need to be repaired on the car. Then, add in the fact that, for covered repairs, you still have to pay a deductible.

When you then consider the remaining expenses for which the company might have to pay out, it isn't hard to see why it is extremely rare for the warranty to ever have to pay an amount for claims that exceeds the cost of the extended warranty.

azipod

This post is not intended to "beat a dead horse" but frequently I run into folks who think they will be covered for vehicle repairs when it may not be so.

First, we need to understand that there is no such thing as an "extended warranty." The term is used quite frequently because it sounds great to the consumer. But in actuality, it's NOT A WARRANTY. The correct term is generally a vehicle service contract or vehicle service agreement. A warranty comes directly from the manufacturer. With some exceptions, a warranty generally is set, and there is absolutely no way to modify or extend a warranty. The warranty is set and is spelled out in your owner's manual. Sometimes, a warranty is modified or extended, such as when a particular component of the car has been a subject of a recall. But again, in general, a manufacture warranty CANNOT be extended -- even if you paid!!!

So then when we talk about "extended warranty," we're really referring to a Vehicle Service Contract -- I'll refer to it as VSC. A VSC is simply what it says. It is a CONTRACT. It is an agreement that says "If X happens, we will do A." But if you ever picked up the VSC and read the language in the contract, you'll quickly notice that it's not as simple. And this is where a VSC differs from a WARRANTY.

You CANNOT purchase a warranty (it comes with the car). You may purchase a VSC. The VSC may or may not be issued by Lexus. Most of them are aftermarket 3rd party companies. Also, sometimes a plan may say "Vehicle Service Contract by Lexus......." then the fine print will say "Issued/Underwritten/Administered by ABC Company." Of course, I'm just using Lexus as an example.
If you had to, always buy a VSC that's issued by your car maker, and almost NEVER NEVER NEVER get a 3rd party one -- But there are a few reputable ones out there...

So, what's the difference between a warranty and a VSC? Well, the difference is HUGE. With a manufacturer's warranty, you are covered by a broad spectrum of laws that are designed to protect consumers (ie. lemon law, Magnussion-Act). In California, under a warranty, you have a wealth of recourse to pursue the lemon law both under FEDERAL and CALIFORNIA statutes. With a warranty, you're good to go. With a VSC ..... you get NOTHING, NO PROTECTION. It is NOT A WARRANTY. It is NOT INSURANCE. You are NOT PROTECTED under any type of consumer-protection law. Why? Because the VSC is simply a CONTRACT - a private contract between you and the VSC entitity. All disputes must be resolved through the agreement spelled out in the contract (which I will talk about more later on).

Are all VSCs bad? Absolutely not. But most of them are. I'm sure there are people here who's had their high dollar vehicle repairs covered by VSC -- but generally you hear more horror stories than happy ones. For those that are raving about their VSCs, I would suggest you pick up the contract and read each section carefully. One of the issues with VSCs is that they DO NOT PAY standard labor rates. For example, you may go to an independent shop, who may charge $90/hour for labor. When you file a claim, the VCS reps will tell you something called the "prevailing competitive rate" for auto repairs in your geographic area. They may tell you their research states the rate should be $75/hour, and only offer to cover that. You'll have to end up paying the difference.
Thinking about going to the dealership for repairs? Forget it. A VSC will absolutely balk at paying $150/hour for labor at the dealership. Is this always the case? No, but you'll very likely see it.
Now, let's talk about PARTS. Most VSC contracts will spell out USED, non-OEM, or AFTERMARKET parts. You want OEM? Well, you can fork out the difference out of pocket. And then there is the LEXUS CPO --- which I reviewed the other night, and it seemed like they DO NOT cover electric components such as BSM, Parking Sensors, Hybrid Battery Unit, and likely a whole bunch more.

What do you do if you are in a dispute over what should be covered under the VSC repair? Well, here's the tough part. There's little you can do. Say your transmission goes out, Lexus wants $5k for repairs. VSC gives you some obscure reason that its not going to be covered. What's your recourse? Well, most contracts will state MANDATORY ARBITRATION in some small town in the US. This means you cannot use the court system. OK, say you're going to pursue this over principal (and not economics), you file arbitration and it'll take MONTHS to hear your case. What do you do with your car in the mean time? Are you going to pay the dealership's daily storage charges during this dispute period? Now you're without a vehicle. You CANNOT begin repairs on your car while the hearing is pending -- because you would never get reimbursed because the VSC personnel has not "authorized" you to begin the repairs. YOU"RE STUCK!

These people know that you are most vulnerable when you are out of your car. They know that -- and that's how this SCAM business works. They've figured that if they DELAY, DENY, and DEFEND, 9 out of 10 people will just forget it, suck it up, and pay for the repairs out of their own pocket. They figure that if they can collect $3000/per-policy x 9, they've got $27,000 in the bank. For the 10th unhappy person who decides to fight them, they'll have $27,000 to fight you! Do you have $27k to fight them?

So there you have it. Like I said before, "peace of mind" sells everything -- and most people fall for it. And these folks think they're covered when in reality, they are not.
In summary, if you have a small repair, a reputable VSC will likely pay it. However, if you have a high price repair (likely the reason why you bought the VSC in the first place), then prepare for a denial. And if you get denied for the repair, there will be little recourse, economically speaking that is.

bc6152

Great explanation Azipod. Spells it out very clearly.

roninlexus

Certainly does- except it is all hypothetical. What company, what level or VSC, what shop rate, what shop / dealer will do the repair? Like we have mentioned - some folks have a breakdown and it's solved. Others, have an issue w/ insurance, some folks have warranty claims challenged. This takes us right back to where we started. Buy the best extended warranty (excuse me- "VSC") you can find IF you feel it's in YOUR best interest. Hope you don't need it as repairs are a PIA even if it goes well. I believe the OP was asking which (if any) warranty companies anyone would recommend. Simple as that.

azipod

Hypotheticals? Sure. They were used to to facilitate the discussion.

If you want actual statistics (facts), then review these:
http://www.consumerreports.org/cro/m...game/index.htm
http://www.clark.com/beware-buying-a...ans-older-vehi
http://www.daveramsey.com/blog/just-...-warranties-dr

Your advice: "Buy the best VSC you can find if you feel it's in your interest."

Gee, that's smart. How do you know what's best? Part of the problem here is that NO ONE knows what's best because no one can read into the future. However, what we CAN use are statistics. And the numbers say you'll lose. Many will view the Lexus VSC as the best. But did the ES300h owners know that their hybrid batteries are not on the list of items to be covered? How about the rest of us? Did we think our BSM and parking sensors were going to be covered as well? Surprise!

Now..... Let's talk about YOUR vsc purchase. Have you gotten your money's worth from whatever you paid for the Fidelity warranty????

I think we all know the answer to this one!

gmanusmc

I don't have a hybrid but I've read that the warranty on the hybrid system that comes with the vehicle, including the battery, is 8 years/100k miles. Not many extended service contracts go much beyond that anyway. And, if the vehicle is sold, the warranty stays in effect until it has run its course.

Also, and I'm not certain this is still the case, but for CA hybrid vehicles, state law mandates a 10 year/150k warranty on the hybrid system.

Most ES300h owners are probably already aware of this and might not consider the hybrid battery a major consideration when contemplating the purchase of extended service coverage.

roninlexus

Gee, that's smart. How do you know what's best? Part of the problem here is that NO ONE knows what's best because no one can read into the future.

Thanks- I am glad we both agree and you finally see my point. Good for you.

Now..... Let's talk about YOUR vsc purchase. Have you gotten your money's worth from whatever you paid for the Fidelity warranty????

It's been 4 months Carnac- Your right, I have yet to re-coup my costs. You got me there.

Your article(s) were right on.... Perhaps I should of reconsidered but I was buying this car as the warranty was expiring; so per your article (#1)

lesz

Excellent point. While there are many good arguments against buying an extended warranty, lack of coverage for hybrid batteries and other hybrid components isn't likely to be one of them.

TechNut

If you live in a state that complies with CARB (California Air Resources Board), which includes California (of course), Washington, Oregon and several in the Eastern US, then this 10 year warranty applies.

As as for my considerations on an "extended warranty" (which I always thought was called Mechanical Breakdown Insurance), the hybrid battery never really entered my thinking. It is a battery. It will require replacement at some point. It will be expensive. These facts are just as certain as death and taxes. Some advance planning is necessary if long term ownership is anticipated. And you are absolutely correct, knowing the battery won't be covered anyway, that didn't factor into my decision regarding an extended warranty.

On a slight digression, a family member recently had to replace the hybrid battery of her 9 year old Camry and she was charged $4600 at the delearship. She was angry, but that's another story for a different thread.

Arty101

Also expensive and can become a problem is the inverter. But being in Calif, I'm also under the assumption that my batteries and inverter are covered for 10 years for the hybrid.