Is It Worth Buying An Extended Warantee?

[Philip Mihalski]

I just purchased a 2001 IS300 with 52000 miles. I can purchase an extended warantee to 100,000 miles or for seven years which ever comes first. I don't drive much and will probably get to 100,000 miles in seven years. The coverage takes care of most non-ware items. Is it worth $2000.

[chuckd600]

Yes, because you will spend more on repairs in the next 50,000 miles. However, be sure to carefully read your warranty contract to make sure you know what is covered. Those companies sometimes try to pull crap like exempting themselves out of covering big stuff. Also, why didn't you buy a CPO Lexus?

[1990LS400]

My recommendation is to pass on the service warranty unless you are really nervous about the condition of your IS. And if you are that nervous about your IS, I recommend that you sell it ASAP. Companies selling warranties are just trying to make money - fairly hard to do when about half of that $2,000 premium is commission (pure profit) for the auto dealer. Also remember that you already have a 6 yr./72,000 warranty on the powertrain and that an extended warranty on powertrain components kicks in only after the standard powertrain warranty expires. And extended service warranties often have hefty deductibles - read the contract closely. Toyota/Lexus products are statistically the most reliable cars made and are the least likely to require an extended warranty.

Same goes for CPO which includes a very expensive extended warranty. For example, a local Lexus dealer wanted nearly $9,000 more for a CPO LS than what I paid for a similar but better equipted LS that a small independent dealer bought for me at the auction. Both cars had about 36K miles, were serviced at the same dealer and were like new.

Most large companies and many individuals "self insure" to a large degree by buying only "disaster" insurance and then self insuring for the small stuff. To self insure, just place that $2,000 in an index fund instead of a service warranty and it is more than likely that you will come out far ahead.

[jimcyzfr1]

just my thoughts guys being a service advisor in a nissan dealership I would recommend a service contract but bargain for the price they are negotiable and depending on the company that it is through can be very good. also most have a zero deduc option will cost slightly more.

just do your research prior to purchase and bargain bargain bargain must of the contracts cost the dealers $500-1000 the rest is pure profit. just stand your ground they will sell cheap, just fight em cause its all commision to the finance director!!!