Is mechanical breakdown insurance worth it?

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jonathan18

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#198945 29-Jul-2016 09:37

As per the title - what are people's thoughts regarding the value of purchasing mechanical breakdown insurance when purchasing a second-hand car?

I've been quoted $1150 for two years or $1350 for three years through Autosure; this is "Extreme" cover, which has no maximum per claim, $100 excess, and an unlimited number of claims. It's for a 2013 Toyota Previa, done c. 90k km, with a purchase price around $28k. That's not cheap...

I haven't bought such cover since my first car many years ago, where I remember it was worth it as I needed to claim, but that was a cheap and old Pulsar; really not sure of whether it's worth my father purchasing it for this Previa, given it's also from a dealer (so CGA etc apply).

Any advice/thoughts? Thanks...

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#1600563 29-Jul-2016 09:50

Be careful with the fine print there is usually a zillion exclusions that eat into the is it worth formula. Also check the service requirements and are they specifying with whom, how often and the extent of any service. This again will factor into is it worth it.

Also consider that Toyota have a well earned reliability reputation

frankv

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#1600566 29-Jul-2016 09:53

I think it's not worth it.

You would expect a car to not break down for some period of time. You would be paying the premium on what should be the seller's risk under the CGA. Maybe reconsider when the CGA period has expired.

They're trying to sell it to you, rather than you wanting it. So they're going to make a profit out of it, and I suspect that there's a goodly commission involved. If you assume the risk yourself, you don't pay them any profit.

Also be careful about what's included and what's excluded, and what the conditions on the insurance are. It may be that the insurance is invalid if you don't pay for regular *expensive* "services" at a franchise when all you really need is an oil change.

myopinion

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#1600571 29-Jul-2016 09:57

No its a waste of money, 99% of the time. Take the 1 in 100 risk yourself.

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#1600591 29-Jul-2016 10:04

A previa never breaks down.

Join the AA.

jmh

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#1600596 29-Jul-2016 10:11

How much more would you have to pay to get a new car? Some deals include free service and AA membership. Plus, it won't have been driven by an idiot. If you add on the cost of the insurance to $28K it might be worth reconsidering the purchase. Your overall insurance might cost more so you need to compare - also check the cost of the new road tax. When I crunched the numbers a few years ago I found it cost the same to buy a slightly smaller car new, as an older car reeking of fag ends.

wellygary

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#1600599 29-Jul-2016 10:14

It's for a 2013 Toyota Previa, done c. 90k km,

Is it an ex camper van or something, its been doing some pretty high miles,

Does it have a full service history?

jonathan18

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#1600612 29-Jul-2016 10:39

As per another thread on here, the NZ-new Previa is the only vehicle that meets my father's specific needs of being a true eight-seater with full lap/sash belts AND not being a lumbering van. I've gone through all the options and all roads lead back to the Previa. We're talking here about an 84 year old who now can't drive due to brain lesions (as well as lesions in his lungs and increasingly general frailty as a result of radiotherapy and soon to be chemo), so he wants a vehicle a decent amount of his (large) family can fit in to take on trips around the place.

Cost of new Previa? RRP of over $60,000, so I'm assuming one may get them down to early $50s, so there's a significant saving on new. I'm not aware of any other vehicle - new or s/h - at or below this price point that will meet my father's requirements'.

NZers with the coin to buy new cars don't generally buy people movers. Nearly all new Previas sold are to rental companies (hotels etc would be the next-largest group), so it's inevitable that the relatively new ones that come on the market are from this source AND will have done a decent number of kms (eg of the four "newish" Previas on TM recently, three were ex-Hertz rentals; the fourth is this one, which could well have been a rental). The provenance of this car is unknown, and so is the service history; this is one of the reasons I'm still not 100% against the idea of mechanical breakdown insurance.

While I understand it's a lot for a s/h vehicle with that many kms, comparing the NZ new price, the relative rarity of getting decent NZ-new Previas, the excellent features/safety of this car over earlier models, the "Toyota tax" etc, I've concluded this is the best option in the circumstances; I'm also not wanting to put my father in a position of having to fork out for costly repairs if the car does turn out to be a lemon, hence why looking at insurance. That said, the CGA is still a valuable tool in these circumstances...

MikeAqua

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#1600675 29-Jul-2016 11:26

On balance no. Generally mechanical insurance comes with a specified service schedule.

I considered it for a diesel Navara I purchased. The manufacturer specified a 10,000km service interval. The mechanical insurer wanted a service every 5,000km. In other words they would double my service costs, and obviously I couldn't do my own servicing.

If I missed one service interval, the garage failed to document a service correctly, or I lost the receipt for one service the insurer could walk away from any claim. There were other loopholes as well as exclusions.

I put an amount equivalent to the insurance premium into a savings account, left it there and did my own oil changes.

After 10 years/300,000 km of motoring the Navara (I miss that beast) plus two other Japanese vehicles have come gone and the most serious mechanical issue I've had was replacing clutch with 200,000km under its belt.

Meanwhile in my personal breakdown fund, there is enough to re-power the Pajero.

Mike

timmmay

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#1600681 29-Jul-2016 11:29

Toyotas are reliable. My 2003 Corolla has had regular basic and scheduled maintenance, outside that I think I've spent $750 on repairs in the past 10 years I've had it. One was for a door not locking automatically, the other was for something to do with a coil in the engine that made it misfire under stress. I bought it at 3 years old with around 90,000km on it, ex rental.

Is a 2013 under manufacturer warranty? 3 or 5 years usually, but your mileage may be too high for it.

jonathan18

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#1600712 29-Jul-2016 11:39

timmmay:

Toyotas are reliable. My 2003 Corolla has had regular basic and scheduled maintenance, outside that I think I've spent $750 on repairs in the past 10 years I've had it. One was for a door not locking automatically, the other was for something to do with a coil in the engine that made it misfire under stress.

Is a 2013 under manufacturer warranty? 3 or 5 years usually, but your mileage may be too high for it.

Yeah, initially I had thought it would still be within warranty, basing it on the five years my Mazda came with, but apparently Toyotas are three years/100k km - that's why many of the rental companies get rid of them at about this mark, as they are no longer covered.

All up, though, based on all the feedback received is that it's just not worth it, both related to the actual cost and the onerous provisions of ensuring the car remains eligible (eg requirements re servicing). Toyotas generally and Previas specifically do seem to be relatively reliable cars, and are relatively cheap to repair if it comes to that. It's being inspected on Monday, so we'll wait to see if that comes up with any concerns.

Thanks for all the comments.

livealittle

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#1600718 29-Jul-2016 11:43

We recently purchases a 2013 Santa Fe and thought we've invested all this money yes we would.

Best decision we made. 7 months after purchase out of the blue it came up with all these warning lights on the dash and when plugged into computer it was classed as a generic fault.

After over a week in at the auto electrician it was found one of the computers that controls the ABS was faulty (apparently Hyundai NZ had never seen the fault before) and it had the auto electricians scratching their heads.

The computer replaced was upto $3K (depending if it was second hand or not) then there was the mechanic and then the auto electrician labour on top.

In all we paid $100 so the $1200 we paid for this insurance we have more than recouped.

As we only had the vehicle for 7 months yes we could have gone back to the car yard and battled with them but using the insurance we didn't need to worry about that hassle.

I guess it's a bit like Murphy's Law take it out and you won't need it, but if you don't take it out then you will need it.

Both the mechanic and the auto electrician took care of the claim with the insurance company. You just need to make sure you keep the services up to date and that they are done by an approved mechanic t

A quick call to find out who is approved in your area is easy.

timmmay

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#1600722 29-Jul-2016 11:47

The Corolla I described above was ex lease / rental, 3 years old and near 100,000km

davidcole

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#1600726 29-Jul-2016 11:54

I found they're pretty loose with listing what they cover, and state "everything else isn't covered" - well who, apart form a mechanic would know what every other part on a car is called.

Also you pay extra for Diesel and for Euro....but nowhere does it state what the "extras" are you're paying for. This is with the AAs Mechanical Breakdown insurance. Almost useless I'd say

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CamH

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#1600902 29-Jul-2016 16:19

We just had $2,500 worth of repairs done to one of our company cars that had the transmission die and the break master fail a year after purchase.

We've purchased mechanical warranties on all of our vehicles and will continue to do so, because that was an extra $1,500 over the value of what I paid for the warranty that I didn't have to pay out.

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#1600911 29-Jul-2016 16:44

jonathan18:

timmmay:

Toyotas are reliable. My 2003 Corolla has had regular basic and scheduled maintenance, outside that I think I've spent $750 on repairs in the past 10 years I've had it. One was for a door not locking automatically, the other was for something to do with a coil in the engine that made it misfire under stress.

Is a 2013 under manufacturer warranty? 3 or 5 years usually, but your mileage may be too high for it.

Yeah, initially I had thought it would still be within warranty, basing it on the five years my Mazda came with, but apparently Toyotas are three years/100k km - that's why many of the rental companies get rid of them at about this mark, as they are no longer covered.

All up, though, based on all the feedback received is that it's just not worth it, both related to the actual cost and the onerous provisions of ensuring the car remains eligible (eg requirements re servicing). Toyotas generally and Previas specifically do seem to be relatively reliable cars, and are relatively cheap to repair if it comes to that. It's being inspected on Monday, so we'll wait to see if that comes up with any concerns.

Thanks for all the comments.

No modern car is cheap to repair. Things usually need replaced not fixed, Everything is imported, everything has a computer attached to it. And cars are packaged to make as much space for the passengers and their stuff ... so broken bits will be damn hard to get to, ie labour +++++

Make no mistake the Previa will be the same.

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