2001 Lexus LS 430

One major repair on the Ultra could easily exceed 2500.00. If what they are offering is a true Lexus Certified warranty extension it is IMHO worth the money. However I do not belive it will cover the cost of replacing tires just installing the spare as part of the roadside assistance program and it will not pay to replace a damaged chrome wheel. Your auto insurance would cover replacement.

Myles

RWoody wrote:

No way! People forget that the purpose of insuring anything is to cover you in the event of a MAJOR problem that could ruin your life. Such as needing a heart transplant, your house burning down, or you accidentally killing people in a vehicle accident. Not for insignificant things that rarely happen like a flat tire! That $1,200 is almost pure profit for them. They already gouged you for the overpriced "Certified" crapola. I drive a 1992 Lexus ES300 with over 247,500 miles on it. No problems. Don't let their slick, commisioned fear mongers (Buy this 'insurance' or your car might explode) get any more of your money!

Maybe yes and maybe no. Generally I agree that you insure against only potential big disasters. But the truth is that the odds of a 4 year old LS having a $1200+ repair are pretty great. Much greater than the Camry based ES car that you cite. If I could buy insurance to replace my $700 computer for $100, I probably would even though I can easily afford $700 for a new one. It's all about risk and reward. Risking $100 on the VERY likelihood of a computer failure is a good risk. Risking $1200 on the odds of $3000 worth of claims to an LS also seems to be a reasonable risk/reward ratio. If it cost $2500, I'd balk. But at $1200, seems reasonable.

There are three reasons to buy insurance: 1) to guard against an unlikely catastrophic event that you can't pay for without hardship; 2) because the odds favor that you'll likely make claims that exceed the premiums you'll pay; and 3) you simply sleep better at night knowing you're covered. You're arguing for the 2nd.

The problem with this argument is that if it were true, the insurers would loose money selling the insurance, since the odds favor them paying out more than they will get back in premiums. Companies generally don't sell things at a loss. So one almost has to assume that the odds favor the insurance company, not you.

There are exceptions of course, and companies may sell specific insurance at a loss and make up for it elsewhere. Or insurance will sometimes be subsidized. But I doubt this is the case here.

I think when it comes to extended warranties on consumer items, they're almost universally a bad deal, but don't discount (3). Good sleep is important.

- Mark

Typically I agree with Mark. However insurance works on averages over large populations and you are a population of 1. A single service occurence in the covered period would roughly cover your premium costs.

I've seen many posts in this newsgroup warning newbies the average service cost/year on a Lexus is about $1,000, so 2 years coverage for $1,200 looks pretty good to me as long as the 'fine print' on covered items doesn't exclude too much. Your initial post looked like the coverage was good. I'd buy it.

XPlant

The only way the extra 2 year insurance is a worthy investment is if you will only drive 10K / year.

the way this additional 2 year coverage works is:

3 years / 100K - you get with the certified vehicle

or the added option

5 years / 100K - which will cost you 1200 extra

the mileage remains the same, so if you can stretch the remaining 50K on your vehicle over the next 5 years, then it is worth it, otherwise - probably not.

Just an opinion