2021 Toyota Highlander Owner Says, “My XSE's Transmission Died at 40K, Now the Dealer Says I’ll Be Waiting 3 Months Because They Are On Back Order

What's happening with Toyota's reliability? 

"My 2021 Toyota Highlander XSE transmission took a dump at 40,000 miles. I know the transmissions are on back order, and some people have been waiting 3 months or more."

That's what Alex Gutierrez says happened to his 2021 Toyota Highlander. He is an owner and went to the Toyota Highlander Owners Club Facebook page to ask others if they have the same problem.

The shared experience is a resounding yes. Alex received 59 comments from other Highlander owners who have experienced similar transmission problems. In this report, I'll delve into what's happening and what Highlander owners need to know. 

Alex says, "For some reason, Toyota doesn't take Infinity Insurance on its on-site rental. I bought the Highlander with 32,000 miles one year ago."

Picture yourself buying a used Toyota Highlander because you can't afford the cost of a new XLE trim level that starts at $42,420. So you find a good used 2021 XSE with 32,000 miles, thinking it will last for another ten years because of Toyota's good reliability history.

You put 8,000 miles on the Highlander and start having transmission issues. You take it to the Toyota dealer where you bought the SUV, and they tell you you need a new transmission. 

The good news is that the 2021 Toyota Highlander comes with a 5-year/60,000-mile powertrain warranty, so Toyota will pay for the transmission.

However, they don't have transmissions available, so you'll have to wait three months to get a new one. Your insurance doesn't cover a rental, and you'll have to pay out of your pocket to get a rental car for three months.

It will cost you $9,986 to rent a similar-sized Ford Edge SUV for the three-month rental. 

You'll be out nearly $10,000 to get the new transmission and have a rental car to drive while you wait. 

Is The Highlander Worth Fixing?

Now you have a dilemma. Should you fix the car, sell it to Toyota, and trade it in for another model? You paid $32,000 for the 2021 Highlander and still owe $20,000 for the loan. 

Toyota will only give you $25,000 for your Highlander. The offer will pay off your loan and give you $5,000 for a down payment on another vehicle. 

What Should You Do?

Should you sell the Highlander to Toyota and get another used Highlander? However, you aren't thrilled about getting another Highlander. The Toyota dealer wants to sell you a new 2025 Highlander, making the offer attractive. Or so it seems. 

Should Buyers Avoid the 2020-2021 Highlander?

Some 2020-2021 Highlander owners report transmission failure with the 8-speed transmission.

Here's a more detailed breakdown of the issue:

• Transmission Issues: Some owners report transmission failures, whining noises, and difficulty getting repairs or assistance from Toyota, even with extended warranties. 
• 8-Speed Transmission: The UA80E and UA80F transmission models are specifically mentioned as being problematic. 
• TSB and Potential Recall: Some users mention a Technical Service Bulletin (TSB) related to faulty transmissions in these model years and suggest needing a recall or class action lawsuit. 
• Dealer and Toyota Response: Some users report dealerships and Toyota refusing to offer assistance or loaner vehicles, even when the transmission fails outside the standard warranty period. 
• Backorders and Repair Costs: Some users report extended backorders for replacement transmissions and high repair costs. 
• Reliability Concerns: There are concerns that the 2020-2021 Highlanders may not have the same level of reliability as previous generations. 

One Highlander on Reddit asks the question. Should I keep it or sell it?

abellferd says, Add me to the list of transmissions needing replacement. I have a 2020 Highlander XLE with 70,000 miles. Whining between 15 and 60 mph. 

The dealer says it's a $9,600 repair job, and parts are a few weeks out. They are asking for help from Toyota, so hopefully, some will be covered there. If that comes back a no - should I get it fixed or sell it? 

It still runs and drives fine, but it's my wife's daily driver, and I don't want to run the risk of her and the kids being stranded somewhere. Do I do a trade-in at a dealer if they don't lower the price because they don't notice?

Another Reddit user shares,

We have a 2019 Highlander XLE AWD, and the estimate for repair from Toyota is $10K out of pocket. The car cannot be driven and transmission has failed. Even with our agreement to pay, Toyota Corporation is unresponsive to the delivery of replacements. 

The transmission is on backorder for 120 days. There are metal shavings in the fluid. The casing is intact, so it's defective. They also have not agreed to pay for a loaner. We are past warranty but only by 10-15 K. 

Fender_jazzmaster says,

I just got the news that our 2021 Highlander LE AWD with 54,000 miles needs a new transmission. We have an extended warranty, but the factory warranty still isn't up, so they are saying they won't provide a rental and that, technically, we can still drive it while we are waiting for a new transmission. 

They don't have any transmissions available, so they will need to build one and send it to our local dealership, but who knows how long that will take? How can they not offer a loaner? Has anyone dealt with this before? I called the Toyota hotline, and they said it's the dealership's responsibility to provide a loaner (or not). The dealership refuses.

Final Thoughts and Questions For Toyota Highlander Owners

Advice for Potential Buyers:

Because of the Toyota Highlander transmission failure in the 2020-2021 model year, it's recommended to steer clear of these model years or opt for a hybrid version, which is generally considered more reliable. 

For those considering a Toyota Highlander, buying an extended warranty that covers the vehicle beyond the 60,000-mile factory powertrain warranty is not just a good idea, it's a crucial step. Alex's experience shows that even with warranty coverage, a new transmission can take months to arrive, leaving you to foot the bill for a rental car. 

It's Your Turn

Do you own a Toyota Highlander, and have you had transmission issues? If so, click the red Add New Comment link below and let us know.

Check out my Toyota Highlander report: Toyota Dealer Speaks Out, “The Stop Sale On the Toyota Grand Highlander Was Tough On Our Customers, Some Moved On To Other Vehicles and Some Waited It Out”

I am Denis Flierl, a Senior Torque News Reporter since 2012. My 30+ year tenure in the automotive industry, initially in a consulting role with every major car brand and later as a freelance journalist test-driving new vehicles, has equipped me with a wealth of knowledge. I specialize in reporting the latest automotive news and providing expert analysis on Subaru, which you'll find here, ensuring that you, as a reader, are always well-informed and up-to-date. Follow me on my X SubaruReport, All Subaru, WRXSTI, @DenisFlierl, Facebook, and Instagram.

Photo credit: Denis Flierl