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Engine gone!?!?

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I have recently bought a GT86 from auction.

Soon after I discovered an oil smell and upon further investigation it has a hole in the rocker cover.

The car has been lowered by the previous owner and an aftermarket exhaust fitted.

Will Toyota cover this under the 5 year warranty or will they say NO as its been modified?

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If you brought it for yourself there are some engines floating about there's  enough of them in breakers yards if Toyota won't entertain you if you are selling it on might put a dent in any profit this depends on it being a major unit failure 

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I have recently bought a GT86 from auction.

Soon after I discovered an oil smell and upon further investigation it has a hole in the rocker cover.

The car has been lowered by the previous owner and an aftermarket exhaust fitted.

Will Toyota cover this under the 5 year warranty or will they say NO as its been modified?

Why not take it in and see, nothing to lose. If they complain about mods I guess you could try to argue that none of them are related to the problem you are asking them to fix under warranty.

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Unlower it and put the standard exhaust back and change rocker cover before going to Toyota, but first of all have a look to see if anything is damaged you might have gotten lucky.

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2 hours ago, alucardo said:

Unlower it and put the standard exhaust back and change rocker cover before going to Toyota, but first of all have a look to see if anything is damaged you might have gotten lucky.

I really wouldn't worry about changing those items back, there is no reason to believe that it would have any effect on the warranty. As for the hole in the cam cover, that is odd, but you need to get it looked at. 

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As above, take it to a dealer.

If it has FSH wouldn't worry, my dealer doesn't give me any hassle about mods, I just get a lot of "not standard" remarks back on my service inspection sheets. :D

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