Warranty from a Used Car Dealer

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Old 21 Feb 2005, 10:00 pm   #1 (permalink)
go300
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Default Warranty from a Used Car Dealer

I just bought a used 1999 Toyota Camry XLE with 71000 Miles.
I just drove it today, and the car is in great shape.

Anyway, he used car broker told me that they offer a 7 year/100,000 mi
warranty that covers the engine, the automatic transmission and the
water pump.
The price, I think, is reasonable, at $995.

The warranty can be bought anytime, but there is a 90-day/1000 mi
waiting period.

Assuming that I follow faithfully the maintenance, and drive
reasonably, is the warranty a good investment? Or because of Toyota's
reputable quality, should I just forego the warranty?

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Old 21 Feb 2005, 11:09 pm   #2 (permalink)
hachiroku
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Default Re: Warranty from a Used Car Dealer

On Mon, 21 Feb 2005 20:00:53 -0800, go300 wrote:

> I just bought a used 1999 Toyota Camry XLE with 71000 Miles.
> I just drove it today, and the car is in great shape.
>
> Anyway, he used car broker told me that they offer a 7 year/100,000 mi
> warranty that covers the engine, the automatic transmission and the
> water pump.
> The price, I think, is reasonable, at $995.
>
> The warranty can be bought anytime, but there is a 90-day/1000 mi
> waiting period.
>
> Assuming that I follow faithfully the maintenance, and drive
> reasonably, is the warranty a good investment? Or because of Toyota's
> reputable quality, should I just forego the warranty?


I sell these warranties, too. I have sold two, but I didn't get the
payment in on time. A year later the buyer came in and asked about the
status of his warranty. I gave him back his check and said, guess you
didn't need it! We took care of all the problems on our required warranty!

Actually, $995 is a good price for 7 years or 100,000! I charge $695 for
12 months and $895 for 24 months, and I'm only charging <2/3 of full list
price! The 1000 miles is covered by the dealer, so go for a weekend trip
and rack 'em up! There is another option available that takes effect
immediately, but it probably is only 2-3 years only.

Make sure it covers whatever, esp AT, AC, repairs to power windows, and
see if it covers timing belts. 100,000 with a starting mileage of 71K is
looking at 2-3 timing belts, and if they are covered you'll get back about
$500 right there! Also, check the deductible, and how much they pay per
incident/year. Our policies have a limit of $3200 LIFETIME with an
incident payment of up to $1200. So, if a tranny blows, they will replace
or rebuild the tranny (about $1200) but then you only have $2000 left on
the policy. Still, getting $3200 for $1000 is a good deal! Just check
carefully what they will pay for...

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Old 22 Feb 2005, 12:18 am   #3 (permalink)
Mark A
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Default Re: Warranty from a Used Car Dealer

"go300" <nsuguitan@yahoo.com> wrote in message
news:1109044853.205616.274900@o13g2000cwo.googlegr oups.com...
> I just bought a used 1999 Toyota Camry XLE with 71000 Miles.
> I just drove it today, and the car is in great shape.
>
> Anyway, he used car broker told me that they offer a 7 year/100,000 mi
> warranty that covers the engine, the automatic transmission and the
> water pump.
> The price, I think, is reasonable, at $995.
>
> The warranty can be bought anytime, but there is a 90-day/1000 mi
> waiting period.
>
> Assuming that I follow faithfully the maintenance, and drive
> reasonably, is the warranty a good investment? Or because of Toyota's
> reputable quality, should I just forego the warranty?
>

I would check out the Toyota warranty that they extended due to the sludge
problem. It may be longer than you think.

The 7 year/100,000 mi warranty is only going to last about 2 more years, so
it may not be such a great deal. Also, what is the deductible, and what if
you move away.

The most important thing is the maintenance records of vehicle.


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Old 22 Feb 2005, 05:51 am   #4 (permalink)
kiselink@mindspring.com
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Default Re: Warranty from a Used Car Dealer


>The price, I think, is reasonable, at $995.


Think about all that goes into one of these things:

a) commission to the saleman.
b) analyse fees to figure out the risk to the insurance agency (and
techniques to elliminate risk).
c) administrative fees over the life of the policy for claims

So what do you think all that overhead costs are?

Now think about how the issuing insurance company makes their money:
d) figuring out ways to delay payouts (oops - you waited 2 days extra
to get that oil change.......1 mile over the oil change limit....tisk
tisk, oops one day late on the payment).
e) figuring out ways to deny payments

I had one once - went to the dealer were i got it! "We're still
waiting on getting approval to go foward with the repair". Delay
results in about 3 hours longer in the shop.

Does the policy allow manufacture replacement parts or do you have to
use other non dealer parts?

Now look at the policy. Its a long multipage contract full of all
kinds of details. It doesnt simply say "WE WILL PAY FOR ANY REPAIRS
YOU NEED!" Why not - isin't that what you really want?

So instead you get some long winded contract that you could not
possibly understand unless you were a lawyer and studied all kinds of
case law.


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Old 22 Feb 2005, 08:54 am   #5 (permalink)
Travis Jordan
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Default Re: Warranty from a Used Car Dealer

go300 wrote:
> Assuming that I follow faithfully the maintenance, and drive
> reasonably, is the warranty a good investment? Or because of Toyota's
> reputable quality, should I just forego the warranty?


Let's see - the insurance company is betting you won't need / be able to
use the warranty, and you would be betting that you will.

Since the insurance companies continue to sell these warranties you can
be sure that the odds are in their favor.


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Old 22 Feb 2005, 09:56 am   #6 (permalink)
Art
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Default Re: Warranty from a Used Car Dealer

If it is not a Toyota warranty, how do you know the company will still be in
business when your car breaks. Also read the fine print. Some warranties
say they do not cover wear and tear. When you transmission breaks they call
it normal wear and tear and won't pay.


"go300" <nsuguitan@yahoo.com> wrote in message
news:1109044853.205616.274900@o13g2000cwo.googlegr oups.com...
>I just bought a used 1999 Toyota Camry XLE with 71000 Miles.
> I just drove it today, and the car is in great shape.
>
> Anyway, he used car broker told me that they offer a 7 year/100,000 mi
> warranty that covers the engine, the automatic transmission and the
> water pump.
> The price, I think, is reasonable, at $995.
>
> The warranty can be bought anytime, but there is a 90-day/1000 mi
> waiting period.
>
> Assuming that I follow faithfully the maintenance, and drive
> reasonably, is the warranty a good investment? Or because of Toyota's
> reputable quality, should I just forego the warranty?
>



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Old 22 Feb 2005, 04:08 pm   #7 (permalink)
davidj92
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Default Re: Warranty from a Used Car Dealer

kiselink@mindspring.com wrote:
>> The price, I think, is reasonable, at $995.

>
> Think about all that goes into one of these things:
>
> a) commission to the saleman.
> b) analyse fees to figure out the risk to the insurance agency (and
> techniques to elliminate risk).
> c) administrative fees over the life of the policy for claims
>
> So what do you think all that overhead costs are?
>


Typical profit margin on extended warranties are 80%-90%. Based on this they
aren't worth what you have to pay, unless you have a catastrophic failure
which, in Toyota's case, isn't likely.
davidj92


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