Ill chime in since Im literally in the middle of dealing with an "extended warranty" company.
I bought my 4Runner from a dealership in Houston in July of 2012. Truck was in great shape and I was offered an extended warranty called the Motorist Assistance Plan. Essentially a third party company that would handle any warranty claims. There were three different levels of the warranty to choose from. I chose the most basic, pretty much covered the drive train and thats it. It was $1065 and some change.
Fast forward to last weekend. The 4Runner has developed a roar coming from the rear end, and I noticed a small oil leak on the front of the motor. I took it in to my closest Toyota dealership to have them check it out. They told me that it would be a $122 diagnostic fee if my repairs were not covered by my warranty. My deductible on the warranty is $100, so either way I was going to be paying something for the work.
After doing a diagnostic, the dealership determined that my bearings in the rear differential were bad, and that the seal on the timing chain cover was leaking. I was quoted just under $4k for the repairs.
The dealership submitted the claim to the warranty company to have processed on Monday of this week. The warranty company decided to drag there feet and kept asking for more proof of the failure and wanted the dealership to send pictures of the parts in question. They did not want to have to send an inspector to the dealership because of our "winter storm" we were having. More than likely they just didnt want to have to pay for a third party inspector on top of the repairs.
Finally today, after sending numerous pictures and faxing paperwork back and forth, the warranty company approved the repairs. But not after trying to haggle on the price of the repairs with the dealership. They tried to state that the factory parts were too expensive at not at the current "market price." They basically tried to make the dealership use parts supplied by the warranty company instead of genuine Toyota parts. Thankfully the dealership has some decent people working in the service department and they were able to negotiate the price of their parts down some so that the warranty company would pay for the Toyota parts.
After its all said and done, my repairs have been authorized, the dealership had to order parts which they expect to come in tomorrow. Ill be getting an entire new rear end(axle housing, differential, gears, everything) and pretty much all the gaskets and seals on the motor(including the head gasket) are getting replaced.
In the end, my warranty ended up paying for itself multiple times over. I have read several stories online with other people not being as lucky. I consider myself extremely lucky to have gotten everything worked out so quickly. God was obviously watching out for me. And the people at the dealership went above and beyond what I would have expected of most repair shops(sending pictures and working from home).
For me, it was totally worth the extra $1k, other people will never see a return on their money though. My advise would be to research the warranty company and read all the fine print on what is included. If you can get a factory warranty, go for that instead of an aftermarket one.
