Extended Warranty vs. Geico's mechanical breakdown coverage [Archive] - Toyota Tundra Forums : Tundra Solutions Forum

: Extended Warranty vs. Geico's mechanical breakdown coverage



TundraSilver
02-15-2007, 08:49 PM
thoughts?


Toyota Warranty (http://www.warrantiestoyota.com/)




GEICO - Mechanical Breakdown Coverage (http://www.geico.com/auto/safety/mbi.htm)


I can get the platinum toyota warranty for about $900 through my dealer (6yr/100k) or the Geico warranty for about $120 a year (7yr/100k) and i'm able to cancel the Geico warranty anytime I want. For instance lets say in 5 years if i've already gone over 100k miles i can cancel.

Which would you choose? I have up to 15k or 15 months (which ever comes first) to add the Geico warranty to my policy.

p-car-tower
02-16-2007, 04:38 AM
I can't address your specific questions, but I'll offer a couple thoughts in general about aftermarket warranties.

You bought a Tundra, the most reliable full-size pickup on the market. What mechanical problems would you expect before 100k miles that would cost more than $900 (the cost of the coverage) to fix?

An extended warranty is buying insurance against a large repair bill. The companies like Geico hire hordes of actuaries (mathematicians) to closely estimate the average cost to honor the warranty for your specific vehicle (i.e. repair your truck should it break). To that cost, they add overhead and profit. Mathematically, based on averages, you will spend more buying the insurance than actually repairing the vehicle yourself since you wouldn't pay the overhead and profit if you paid for the repair yourself.

Just my $0.02. YMMV...

The Phoenix
02-16-2007, 06:16 AM
You don't need either. Car Tower explained it pretty well :tu:

hndymn
02-16-2007, 10:03 AM
I agree. Insurance is for catastrophic events like accidents. Don't use it for little stuff.

btanchors
02-16-2007, 02:13 PM
To paraphrase p-car-tower:

An extended warranty is buying insurance... Insurance companies hire hordes of actuaries (mathematicians) to closely estimate the average cost to honor an insurance policy. To that cost, they add overhead and profit. Mathematically, based on averages, you will spend more buying the insurance than actually paying for your needs yourself since you wouldn't pay the overhead and profit if you paid yourself.


Ok, I can use the exact same argument for not buying life insurance, and disability insurance, and health insurance, but I have all three, and wouldn't be without them. So, the real question is, are you willing to pay ~$900 to relieve yourself of the possibility of having a large repair bill over the next 7 years/100k miles? It sounds like you've already answered that question for yourself. So, on to the next part of your question...

I prefer the manufacturer's warranty over a third party warranty. First, A lot of third party warranty companies go bankrupt by the time you need to use your policy. Although, in the case of the Geico warranty, I doubt Geico is going to go bankrupt, so that eliminates that problem. The next problem is that I hate getting in the middle of disputes between third-party warranty companies and the dealer in the event of a problem. I can avoid this by buying a warranty from the manufacturer (Toyota). On the other hand, I suspect third party warranties may allow you to have your car repaired at places other than the dealer.

So, which is better? Depends on your situation, but as I stated, I prefer the manufacturer's warranty.

I used to be an "anti-extended warranty" type of person, and used to use the arguement p-car-tower used above, plus others, to justify not going for any extended warranties. Ironically, now that I am more financially secure, and can afford to pay for pretty much anything I am likely to need, I've purchased extended warranties for the past couple of cars I have purchased. I just like piece of mind knowing I won't have any major repair bills for x years or x thousand miles....

There is one additional benefit...Some extended warranties have a transfer provision - so you can transfer the extended warranty to another person if you should sell the car before the term of the warranty coverage expires. This can be a real selling point if you want to sell the to a private party.

Buckeyefan
02-16-2007, 05:03 PM
thoughts?


Toyota Warranty (http://www.warrantiestoyota.com/)




GEICO - Mechanical Breakdown Coverage (http://www.geico.com/auto/safety/mbi.htm)


I can get the platinum toyota warranty for about $900 through my dealer (6yr/100k) or the Geico warranty for about $120 a year (7yr/100k) and i'm able to cancel the Geico warranty anytime I want. For instance lets say in 5 years if i've already gone over 100k miles i can cancel.

Which would you choose? I have up to 15k or 15 months (which ever comes first) to add the Geico warranty to my policy.

Geico has a $250 deductible - pure rip off for the small mechanical things. You get this coverage in case your tranny falls apart, or you throw a lifter. The Toyota 0 deductible coverage is probably the best investment if you need peace of mind - but buy it 1 month before your 36 month/3 years are up. Put that $1200 or whatever it costs you in a money market right now and earn interest for the next three years, then decide if you want the added 6 year/100k mi. coverage. You might have made enough to cover that tranny explosion IF it occurs before 100k miles.

Harsh
02-16-2007, 06:12 PM
I say go for the Toyota Warranty. I know that peope say you bought a Toyota so yo udont need one. Well, I look at it like this. A/C Compressor going out one time will pretty much take care of your cost. Also, I would rather pay the money now, when I know I have it and it is not a problem, instead of later. Who knows what may happen between now and then. Also, if you decide to sell it, think of being able to say that you are selling a Toyota with a 100,000 mile bumper to bumper. Who would'nt be interested in that. This is my opinion. I have a 7 year, 100,000 bumper to bumper.

kev009
02-16-2007, 08:13 PM
Although I bought my car used and it came with the 100k warranty, I can say it already paid for itself. Had rear axle and differential leak repaired, new shocks to replace squeaky ones, as well as some TSBs free of charge that came out to over $1100. The original owner also had trouble with the brakes on multiple occasions that was covered.

The 7 yr warranty is the only one that makes sense in my opinion. Things are more likely to break the older the car. Toyota was very easy when it came to getting all this done. That much cannot be said about third party warranties.

nola3716
02-17-2007, 07:28 PM
Do a search on this forum for "extended warranty" and get some good discount info on your extended service plan.