thenightw

I am buying a 2014 CPO Lexus ES300h as i meantioned in a previous thread. I am trying to decide on the warentee. When I started talking to them about it they originally said it would be $2500 to $3000 but then they quoted me $3500. Is that the normal cost or should i be sble to get it for less.

Thanks for everyones help.

LexBob2

Let me ask, why do you feel the need for an extended warranty on the car? If you must have one, $3,500 is too high. As mentioned, extended warranties are extremely profitable for the dealers..

Wandl

You can also google Jerry Johnson @ Midwest Toyota he can sell a Lexus VSA to you directly (this is a genuine Toyota/Lexus VSA) 800-530-5789 he'll likely beat what your dealership is trying to sell you.

thenightw

I just had a bad experience with a Hyundai Sonata in which the engine went out. They are working on fixing it currently. I am getting rid of it for the ES300h. I am switching to Lexus due to the reliability but am a little nervous about it. I do 100% agree that $3500 is way to much. Is it possible to get it for $2,500? I hate this part of the sale. If they still want the $3,500. I am not getting the warranty

bc6152

If you're determined to buy the extended warranty from this dealer I would offer to buy it at $1000.00. Most they can say is "NO". For me, I wouldn't buy it at all and save a little money each payday for an unexpected repair. It sounds by your replies that you want to buy the policy. That's your decision and if it gives you the assurance you're looking for, then go for it. I definitely would not pay $3500.00.

Remember also that you're not obligated in any way to purchase any extended warranty for tires, car, wheels, maintenance, or anything else.

lesz

Absolutely. The dealer can sell you that extended warranty for well under 1/2 of the advertised price, and they still would be making an enormous profit on the sale.

If you need more confirmation that extended warranties are not a good buy, do a Google search and read the articles on sites like Edmunds, Consumer Reports, etc.

Here are few to get you started.

http://www.consumerreports.org/exten...ensive-gamble/

http://www.nytimes.com/2008/08/02/bu...shortcuts.html

https://thefinancebuff.com/buying-a-...-warranty.html

https://www.edmunds.com/auto-warrant...-warranty.html

thenightw

Is there a site that shows what they pay for their warranties?

Maikerusan

Not that I am aware of .

But, don't make your decision whether or not to purchase extended warranty based on your experience with a Sonata. Lexus is far and above more reliable than that.

I have been driving Toyota or Lexus cars for about 15 years. Not once would I have benefited from an extended warranty. Not once.

I can't recall any problems at all where I would have had a claim. Most times if there is an issue with the car, it happens under the standard manufacturer warranty, but again, I have never had a problem like that.

In my opinion you are throwing money away buying an extended warranty.

lesz

How much dealers pay for extended warranties is usually, for obvious reasons, a closely guarded secret. If potential customers knew how much profit there is for the dealer in the sale of an extended warranty, I can't imagine that anyone would buy one.

At a time in the past, I was involved with brokering car sales. At that time, if the dealers that I was working with could sell a car buyer an extended warranty at the advertised price, their profit on the sale of that extended warranty was often well over 80% of the price that the buyer paid. That was over 25 years ago, and things might have changed since then, but I'd be surprised if, today, the markup on extended warranties was not in the range of a few hundred percent.

Not only are expensive repairs not likely or, if they are needed, likely to happen during the period of the factory warranty, but most likely repair and maintenance costs that occur beyond the period covered by the factory warranty will be for things like new tires, brakes, batteries, etc., and the costs for those repairs would not be covered by an extended warranty, anyway. The bottom line is that it is quite rare for the buyers of extended warranties ever to recover, in claims for covered repairs, even a small fraction of what they paid for the extended warranty.. If you buy an extended warranty, not only are you betting that you will need something like a new engine, but you are also betting that the need for that expensive repair will come during the relatively short period of time between when the factory power train warranty expires and when the extended warranty expires.

bostonsnow

Is this a car listed as official Lexus CPO? If so, it should have the routine Lexus CPO warranty built in, which is quite comprehensive . Usually they pick certain good condition recent models to list as CPO and often are reluctant to sell it without the warranty. So the price is the price, and includes the CPO standard warranty. For higher mileage cars, they will list them as just plain pre-owned, but then there are options to pay for an add on extended warranty.
Its unclear whether this car is the former or latter situation? If it is official CPO, then I'm not sure as to why they are offering separate coverage. The standard CPO extended warranty is very robust so there should be no need to add on anything further
If it is a non-CPO ordinary pre-owned car, that is a different situation. You can pay for a warranty, but as others have mentioned, the dealers will profit off of these.