Thoughts on extended warranties?

[ba15996X50]

Dealer is offering an extended warranty on my new RR. bumper to bumper 2900 for 6y/120K. It doesn't fire my engines, but wanted to ask for thoughts on whether this is worth it? I have very little experience buying new vehicles.

I do like the idea of an extended warranty. I'm wondering if there are other sources that are better, cheaper, etc?

Has anyone shopped for an aftermarket warranty with the Ford ProCal tune? In other words, you were honest with the warranty seller and told them the car had ProCal installed. Thanks!

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[Raptor Family]

I think an original FORD ESP warranty is worth it—maybe for different reasons than what you are thinking. My go-to cars for the last 40 years have been BMWs, Mercedes, and Porsches. What I learned from them, is that they are so electronic oriented and dependent, (just like our Raptors), when some electronic module, window motor, or sensor—digital dash, infotainment screen, etc. fails, it can cost thousands to fix. Our trucks only have 3yr/36k warranty standard bumper to bumper —5yr/50k powertrain. Average ownership is right around 4-5 years—which means about the time you would be selling your truck—it could be at least a year out of warranty. Nobody wants to finance a used vehicle without a warranty—too much risk.

At resale—If, you had a 10yr/100k transferable warranty from Ford, the added value of your truck is worth more than what the warranty’s initial cost was.

Let me explain: a 4 year old out of warranty Raptor has enough residual value that it will almost surely have to be financed by a new buyer. Mostly, individuals will not privately purchase and finance an expensive vehicle out of warranty. In my BMW days, my dealer flat told me, if I was trading in, make sure I had at least 3 months of Factory warranty left—it makes the car worth $5k more and will sell faster than if it were 1day or 1mile out of warranty. New buyers value that warranty because if anything were wrong, the manufacturer would fix it free. And—since it had warranty, and repairs are free, I would have already had any known defects repaired.

If you don’t have warranty left, dealers will usually low-ball a trade-in even lower than the already low wholesale or “Trade-in Value”. I am just guessing what our trucks will be worth in the future—and I don’t think I’m far off, I think the difference between wholesale and retail will be at least $3-4k, maybe more. That is more than the total cost of a warranty. With everybody having access to Car Fax, prospective buyers can see if you properly conducted maintenance and took care of your truck—oil changes/airfilter, etc—even if you had Ceramic Coated paint/PPF, most licensed installers add those items to your vehicles Car Fax.

I am saying that privately selling the truck instead of trading it in to a dealer can get you as much as $3-4k more. What makes the truck sell at a premium and in some cases, even more than the same truck on a dealer lot without a warranty is that transferable warranty—new buyers crave the minimal risk that comes with a used car with a factory warranty—and they will pay extra for it.

I put my money where my mouth is and I purchased a Ford ESP 10yr/100k mile warranty from Flood Ford—I added the Tech option (covers all the electronics (dash, infotainment, computers, drive modes etc), also had the Lighting option (to cover our expensive led headlights and those ungodly expensive radar equipped rear tail lights), and the Key fob option (my wife ran 3 Mercedes key fobs through the clothes washing machine))—those are just the additional options for bumper to bumper style coverage, the engine/powertrain and everything else is still covered for the 10yr/100k. Total cost was about $3200 after using all my Ford pass points from the purchase of truck—and it has zero deductible.

With current quality control—not picking on Ford (but they do have more recalls this year, than all other major car manufacturers combined)—google it. I think there is also a risk vs gain not just that we pay up front for the warranty, and get the money back at resale, but that we have the added value of not worrying about having to pay out of pocket for some high-priced out of warranty repair.

Just my two cents

 

[momike]

I think an original FORD ESP warranty is worth it—maybe for different reasons than what you are thinking. My go-to cars for the last 40 years have been BMWs, Mercedes, and Porsches. What I learned from them, is that they are so electronic oriented and dependent, (just like our Raptors), when some electronic module, window motor, or sensor—digital dash, infotainment screen, etc. fails, it can cost thousands to fix. Our trucks only have 3yr/36k warranty standard bumper to bumper —5yr/50k powertrain. Average ownership is right around 4-5 years—which means about the time you would be selling your truck—it could be at least a year out of warranty. Nobody wants to finance a used vehicle without a warranty—too much risk.

At resale—If, you had a 10yr/100k transferable warranty from Ford, the added value of your truck is worth more than what the warranty’s initial cost was.

Let me explain: a 4 year old out of warranty Raptor has enough residual value that it will almost surely have to be financed by a new buyer. Mostly, individuals will not privately purchase and finance an expensive vehicle out of warranty. In my BMW days, my dealer flat told me, if I was trading in, make sure I had at least 3 months of Factory warranty left—it makes the car worth $5k more and will sell faster than if it were 1day or 1mile out of warranty. New buyers value that warranty because if anything were wrong, the manufacturer would fix it free. And—since it had warranty, and repairs are free, I would have already had any known defects repaired.

If you don’t have warranty left, dealers will usually low-ball a trade-in even lower than the already low wholesale or “Trade-in Value”. I am just guessing what our trucks will be worth in the future—and I don’t think I’m far off, I think the difference between wholesale and retail will be at least $3-4k, maybe more. That is more than the total cost of a warranty. With everybody having access to Car Fax, prospective buyers can see if you properly conducted maintenance and took care of your truck—oil changes/airfilter, etc—even if you had Ceramic Coated paint/PPF, most licensed installers add those items to your vehicles Car Fax.

I am saying that privately selling the truck instead of trading it in to a dealer can get you as much as $3-4k more. What makes the truck sell at a premium and in some cases, even more than the same truck on a dealer lot without a warranty is that transferable warranty—new buyers crave the minimal risk that comes with a used car with a factory warranty—and they will pay extra for it.

I put my money where my mouth is and I purchased a Ford ESP 10yr/100k mile warranty from Flood Ford—I added the Tech option (covers all the electronics (dash, infotainment, computers, drive modes etc), also had the Lighting option (to cover our expensive led headlights and those ungodly expensive radar equipped rear tail lights), and the Key fob option (my wife ran 3 Mercedes key fobs through the clothes washing machine))—those are just the additional options for bumper to bumper style coverage, the engine/powertrain and everything else is still covered for the 10yr/100k. Total cost was about $3200 after using all my Ford pass points from the purchase of truck—and it has zero deductible.

With current quality control—not picking on Ford (but they do have more recalls this year, than all other major car manufacturers combined)—google it. I think there is also a risk vs gain not just that we pay up front for the warranty, and get the money back at resale, but that we have the added value of not worrying about having to pay out of pocket for some high-priced out of warranty repair.

Just my two cents

So very well said!

What's a ford pass point?

 

[momike]

I think an original FORD ESP warranty is worth it—maybe for different reasons than what you are thinking. My go-to cars for the last 40 years have been BMWs, Mercedes, and Porsches. What I learned from them, is that they are so electronic oriented and dependent, (just like our Raptors), when some electronic module, window motor, or sensor—digital dash, infotainment screen, etc. fails, it can cost thousands to fix. Our trucks only have 3yr/36k warranty standard bumper to bumper —5yr/50k powertrain. Average ownership is right around 4-5 years—which means about the time you would be selling your truck—it could be at least a year out of warranty. Nobody wants to finance a used vehicle without a warranty—too much risk.

At resale—If, you had a 10yr/100k transferable warranty from Ford, the added value of your truck is worth more than what the warranty’s initial cost was.

Let me explain: a 4 year old out of warranty Raptor has enough residual value that it will almost surely have to be financed by a new buyer. Mostly, individuals will not privately purchase and finance an expensive vehicle out of warranty. In my BMW days, my dealer flat told me, if I was trading in, make sure I had at least 3 months of Factory warranty left—it makes the car worth $5k more and will sell faster than if it were 1day or 1mile out of warranty. New buyers value that warranty because if anything were wrong, the manufacturer would fix it free. And—since it had warranty, and repairs are free, I would have already had any known defects repaired.

If you don’t have warranty left, dealers will usually low-ball a trade-in even lower than the already low wholesale or “Trade-in Value”. I am just guessing what our trucks will be worth in the future—and I don’t think I’m far off, I think the difference between wholesale and retail will be at least $3-4k, maybe more. That is more than the total cost of a warranty. With everybody having access to Car Fax, prospective buyers can see if you properly conducted maintenance and took care of your truck—oil changes/airfilter, etc—even if you had Ceramic Coated paint/PPF, most licensed installers add those items to your vehicles Car Fax.

I am saying that privately selling the truck instead of trading it in to a dealer can get you as much as $3-4k more. What makes the truck sell at a premium and in some cases, even more than the same truck on a dealer lot without a warranty is that transferable warranty—new buyers crave the minimal risk that comes with a used car with a factory warranty—and they will pay extra for it.

I put my money where my mouth is and I purchased a Ford ESP 10yr/100k mile warranty from Flood Ford—I added the Tech option (covers all the electronics (dash, infotainment, computers, drive modes etc), also had the Lighting option (to cover our expensive led headlights and those ungodly expensive radar equipped rear tail lights), and the Key fob option (my wife ran 3 Mercedes key fobs through the clothes washing machine))—those are just the additional options for bumper to bumper style coverage, the engine/powertrain and everything else is still covered for the 10yr/100k. Total cost was about $3200 after using all my Ford pass points from the purchase of truck—and it has zero deductible.

With current quality control—not picking on Ford (but they do have more recalls this year, than all other major car manufacturers combined)—google it. I think there is also a risk vs gain not just that we pay up front for the warranty, and get the money back at resale, but that we have the added value of not worrying about having to pay out of pocket for some high-priced out of warranty repair.

Just my two cents

also: have you done a similar analysis for the value of PPF?

 

[Raptor Family]

also: have you done a similar analysis for the value of PPF?

No, I haven’t. My basic thoughts are that completely applying PPF to a vehicle is real expensive—about $6k for a good professional product, and a pro installer. You can repaint a vehicle for that kind of money. On all my recent new vehicles. I have adopted a different strategy—only PPF the most damage susceptible parts, ie front bumper, first 10” of hood, backs of mirrors, door edges, door sills, etc. I like Ceramic Coating all the exposed paint. A good installer will paint correct the finish—even new cars need it, and then apply the coating. It provides a hard scratch resistant finish that is hydrophobic—and beads water off better than wax—and lasts for several years. Cost for Raptor truck was about $1300 for PPF, Ceramic, and full detail of new truck. About $1500 for sports car that requires entire hood and roof to have PPF (some cars are known for rock chips over entire hood and roofline above windshield). Use a pro with a plotter cutter that pre cuts all pieces—takes less time and has a more professional installation appearance. What brand of film/Ceramic? Over the years. I have used a few different ones. I use what my installer of many many years recommends.

 

[Raptor Family]

So very well said!

What's a ford pass point?

It is a Loyalty Points reward program Ford gives customers if you buy parts, services, and even a new vehicle from them. I think a new Raptor with the accessories I bought with it gave me about 42,000 points—which some people cash in for first oil change—I used all of mine to pay down part of my extended warranty (I think it was worth $170).

 

[RaptorME]

Not sure if it's been said but the warranty is also refundable, I took advantage of that on my GT350 since that warranty was on the expensive side.

 

[Jason B]

Not sure if it's been said but the warranty is also refundable, I took advantage of that on my GT350 since that warranty was on the expensive side.

But not fully refundable, it'll be prorated.
When I bought my '21, I got an 8yr/125K thru Grainger for $1600. When I traded it in for the '24, they applied the residual ESPs $900 to the new ESP for the '24. If you sell, you can get a refund for the residuals, transfer it to a new ESP, or transfer it to the new buyer.

 

[stemplar]

I think an original FORD ESP warranty is worth it—maybe for different reasons than what you are thinking. My go-to cars for the last 40 years have been BMWs, Mercedes, and Porsches. What I learned from them, is that they are so electronic oriented and dependent, (just like our Raptors), when some electronic module, window motor, or sensor—digital dash, infotainment screen, etc. fails, it can cost thousands to fix. Our trucks only have 3yr/36k warranty standard bumper to bumper —5yr/50k powertrain. Average ownership is right around 4-5 years—which means about the time you would be selling your truck—it could be at least a year out of warranty. Nobody wants to finance a used vehicle without a warranty—too much risk.

At resale—If, you had a 10yr/100k transferable warranty from Ford, the added value of your truck is worth more than what the warranty’s initial cost was.

Let me explain: a 4 year old out of warranty Raptor has enough residual value that it will almost surely have to be financed by a new buyer. Mostly, individuals will not privately purchase and finance an expensive vehicle out of warranty. In my BMW days, my dealer flat told me, if I was trading in, make sure I had at least 3 months of Factory warranty left—it makes the car worth $5k more and will sell faster than if it were 1day or 1mile out of warranty. New buyers value that warranty because if anything were wrong, the manufacturer would fix it free. And—since it had warranty, and repairs are free, I would have already had any known defects repaired.

If you don’t have warranty left, dealers will usually low-ball a trade-in even lower than the already low wholesale or “Trade-in Value”. I am just guessing what our trucks will be worth in the future—and I don’t think I’m far off, I think the difference between wholesale and retail will be at least $3-4k, maybe more. That is more than the total cost of a warranty. With everybody having access to Car Fax, prospective buyers can see if you properly conducted maintenance and took care of your truck—oil changes/airfilter, etc—even if you had Ceramic Coated paint/PPF, most licensed installers add those items to your vehicles Car Fax.

I am saying that privately selling the truck instead of trading it in to a dealer can get you as much as $3-4k more. What makes the truck sell at a premium and in some cases, even more than the same truck on a dealer lot without a warranty is that transferable warranty—new buyers crave the minimal risk that comes with a used car with a factory warranty—and they will pay extra for it.

I put my money where my mouth is and I purchased a Ford ESP 10yr/100k mile warranty from Flood Ford—I added the Tech option (covers all the electronics (dash, infotainment, computers, drive modes etc), also had the Lighting option (to cover our expensive led headlights and those ungodly expensive radar equipped rear tail lights), and the Key fob option (my wife ran 3 Mercedes key fobs through the clothes washing machine))—those are just the additional options for bumper to bumper style coverage, the engine/powertrain and everything else is still covered for the 10yr/100k. Total cost was about $3200 after using all my Ford pass points from the purchase of truck—and it has zero deductible.

With current quality control—not picking on Ford (but they do have more recalls this year, than all other major car manufacturers combined)—google it. I think there is also a risk vs gain not just that we pay up front for the warranty, and get the money back at resale, but that we have the added value of not worrying about having to pay out of pocket for some high-priced out of warranty repair.

Just my two cents

I think you were fed some fluff from a silver-tongued sales person.

Having a factory warranty makes the sales person’s job easier. Many dealers include a short (eg 30-day) warranty and some states have laws that require certain warranties (like warranty of fitness or merchantability). Having a factory or extended warranty only avoids the dealer from incurring a potential repair cost, which means it’s valuable to the dealer to have that warranty. You will not get the full cost of the warranty back at trade in if for no other reason than 20%-30% or more of the warranty cost went into the dealer’s pocket as profit, then factor in the proration for how much of the warranty remains. Sure, buyers value a warranty but having a warranty doesn’t blind the average consumer to the price of the purchase; they’re comparing that one with every other one on the internet and see, before hearing any sales bs, that the cost is significantly higher than others on the market.

 

[noswttea4u]

https://www.floodfordesp.com/pdf/PremiumCARE_Ford_ESP.pdf

this option at the Dealer was over 8k

Lombard Ford has a $226 discount until Jan 2 also. https://www.lombardfordprotect.com/

Y50336

 

[JimG]

I have owed about a dozen new vehicles in the last 15 years. I have never purchased any sort of extended warranty. I bet I have saved in the neighborhood of $25,000 in expense. These cars have cost from $45,000 to over $200,000. I have owned all of them past their warranty period. Many of them around 7-8 years. I have never had any work done outside of the warranty period. I have had several dealers tell me, oh you need this work done before it breaks. Just trying to up sell me when preforming regular PM. Dealers call it a free safety check and them know it make sales in the shop.
Never has a dealer asked if I had an extended warranty so they could give me more as a trade. When I have looked up values on Kelly, Edmonds, or any other of the sites that value vehicles have they asked about an extended warranty. Dealers want to sell extended with their used vehicles with scare tactics. Financing companies don’t care if you have or don’t have an extended warranty.
Extended warranty companies use sophisticated programs of probabilities in order to price out their products. Many people here are assuming they will have a claim that will exceed the cost of the warranty. Chances are you will not. If the majority of owners that bought ESP had $3,000 worth of claims on a plan they paid $2,500 for, the companies would go broke. It’s that simple.
If someone feels better having an ESP, then buy one. But trying to convince others that they need one is crazy. Don’t project your fears onto others.

 

[Raptor Family]

I think you were fed some fluff from a silver-tongued sales person.

1. I wasn’t in sales—I was the Tech that worked in the back. Thanks for the complement though.

Having a factory warranty makes the sales person’s job easier.

2. This is kind of what I was saying—if the salesman is you—privately selling your own truck.

Many dealers include a short (eg 30-day) warranty and some states have laws that require certain warranties (like warranty of fitness or merchantability). Having a factory or extended warranty only avoids the dealer from incurring a potential repair cost, which means it’s valuable to the dealer to have that warranty. You will not get the full cost of the warranty back at trade in if for no other reason than 20%-30% or more of the warranty cost went into the dealer’s pocket as profit, then factor in the proration for how much of the warranty remains.

3. I think you missed my point here completely. I was proposing selling your vehicle privately at a premium price and reclaiming much of the cost (the wholesale, online cost from Granger/Flood Ford, etc)—not from the inflated dealer price of the warranty. Wholesale cost—a $6k 10yr/100k mile, zero deductible warranty is under $3k. Please, go back and read the first sentence I wrote—“it’s not what you think’—and, you made it ‘what you think”. What I am saying is that if you have no warranty left—it is very difficult, if not impossible to sell your vehicle. New buyers will not finance $30-40k for a private sale where the truck has 50k miles, and they take all the risk. That warranty is what makes private sale possible.

If you trade in to a dealer and have no factory remaining, you are offered lower value than the wholesale/Trade-in value—dealers don’t want to absorb the risk either.

In the long run, $3k is not that much money over a 10 year period. Every vehicle I’ve owned has required more than that in repairs after the factory warranty expired. As others on here have said, if you trade in—you can transfer remaining warranty to new vehicle, or sell it back—both at a partial loss.

 

[RJRanger]

It doesn't make sense to buy a Ford Protect Extended Warranty till the Mfg. Warranty is about to expire, 36 mos. From Ford Protect:

Q: When can I purchase a New Ford Protect Extended Service Plan?

A: Plans must be purchased within the time and mileage of the New Vehicle Limited Warranty (the earlier of 3 years or 36,000 miles for Ford vehicles and 4 years or 50,000 miles for Lincoln vehicles).

IMO, the main benefit of an Extended Warranty is Peace of Mind. Cost of a repair vs. cost of the warranty.......big difference. And with today's vehicles, anything could go wrong.

Do you think the pricing is the same regardless of when you buy the esp just so it is within that time/mileage frame? Unlike life insurance the price goes up as you age.

 

[donkey]

Hmm $2,700 for a 125K/7Yr warranty so I can drive my truck to its fullest potential and not think about what would happen if I lose my transmission at 50,001 miles and would cost ~8K to repair.

Yeah I’m good with the Ford ESP.

 

[Jason B]

Do you think the pricing is the same regardless of when you buy the esp just so it is within that time/mileage frame? Unlike life insurance the price goes up as you age.

I don't when you buy affects the price. Repairs before OEM warranty expires are covered by OEM warranty. After that, the ESP pay for repairs.

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