Extended Car Warranties

[cabinetman]

My Explorer will be out of the initial factory warranty in July. I am looking into picking up an extended warranty from Ford. I'll be headed over to the dealer today to get some info.

I only drive about 3K to 4K miles/year, and the warranties are written for "time" and odometer readings...whichever comes first. There are several plans available with what's covered, and deductibles. Any words from the wise that would help in making a decision?
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[JimD]

I never buy extended warranties for anything. They are good money makers for the company selling them to you. So they are not, on average, a good deal for the buyer.

If you, on the other hand, like the peace of mind of having the warranty, I would want to know whether the coverage is from FORD or if they are just selling you insurance from a 3rd party. If it's a third party, then what happens if they go out of business or something. My guess is also that this is something you can negotiate the price of, at least to some degree. You also want to know what is covered, the deductable, etc..

Jim

[cgallery]

I purchased an extended warranty on the new Odyssey because it was only $600 for 6 year/100k miles, with a $100 deductible. And it is a HONDA warranty.

So if one major thing happens (transmission, for example), the warranty is more than paid for.

One thing you have to watch out of is the deductible. I learned after buying my warranty that I should have pressed for a lower or no deductible.

I wouldn't hesitate to purchase a FORD warranty. But I'd try to negotiate on price AND deductible.

Oh, and I never buy extended warranties on other stuff. But $600 for an extra three years and 64k miles seemed very reasonable.

[Uncle Cracker]

Consumer groups generally advise against extra-cost warranties, many of which are little more than overpriced insurance agreements, with much legal jargon attached to the benefit of the issuer. Many leave you no recourse if the issuer looks at your request for service and just says "Nahhhh..."

Obviously, YMMV, so just look at all the fine print, and decide. If you are only gonna drive 20K over the next 5 years, it would be hard to see the value of such coverage, though.

Conventional wisdom would surmise that people would only offer this stuff if it benefits them, so be careful...

[Cubsfan]

It's a gamble, like any other insurance policy. The one thing I like is that, for the most part, it allows me to predict costs. If I buy a 7 year warranty, I know that if something goes wrong in that time it's covered. If I don't, I may end up having to pay nothing, or I may end up spending $5k on repairs.

I agree though, the only good way to get them is from the manufacturer.

[cabinetman]

It's a gamble, like any other insurance policy. The one thing I like is that, for the most part, it allows me to predict costs. If I buy a 7 year warranty, I know that if something goes wrong in that time it's covered. If I don't, I may end up having to pay nothing, or I may end up spending $5k on repairs.

I agree though, the only good way to get them is from the manufacturer.

You're right. You are betting you'll need it, they are betting you won't. I don't buy extended warranties on appliances or electronics, but I did buy one for our new flat panel HD LCD TV...it only cost $35, I think.

My last experience with an extended warranty was in the mid 80's, when I bought a Porsche 930. I had a 911 before that, and knew how expensive repairs were. The policy was $2000. I was hesitant at first, but went for it. I did have a major problem during the policy period where the repair was $8000.

The company tried to weasel out of paying. I had to get a lawyer and sue for compensation. While the settlement was pending I had to rent a car. Finally reached a settlement after I paid the bill to get my car fixed returned.

This warranty is a Ford warranty. The best deal they have is for 84 months/ 60K miles. With $100 deductible it's $1420, with 0 deductible it's $1620. It covers "everything" except maintenance items.
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[atgcpaul]

I'd advise against it from personal experience.

When I bought my first car 10 years ago, I got a really good deal (I think I
got the salesman fired) but then I paid $1000 for the extended warranty.
The warranty was through Nissan but every single thing that has happened
to the car after the basic warranty expired has been exempt from the warranty.
The extended warranty covers a HUGE amount of things but none
of them has been anything that has broken.

I guess Nissan got the good deal in the end.

Paul

[Kristofor]

I know the smart money says they're a waste of money. I should believe it, but the curse of the small sample size anecdote has cursed me and I just can't quite get there...

I have had "good luck" and more than covered the cost on two different trucks. In my mind cars always break eventually (I don't swap cars every 2-4yrs). Any one moderate repair makes it a wash and I never seem to need only one repair before the vehicle hits 10 years old. The one's I've had have always included all parts except those listed as excluded, from what I've heard the ones that work the other way (only include parts listed) can be more troublesome with denied or partially covered claims.

Finally, if I'm out of town and the wife's car has a problem I don't need to worry about whether some mechanic is trying to scam her or have her deal with obtaining multiple quotes for the work, just let the dealer handle it.

[herb fellows]

I believe the extended warranties are based on about 12k a year. If you drive more, they want more, so I would definitely be looking for a large reduction considering your mileage.
Unfortunately, I think it's one sided, they only charge more if you go over the mileage, don't offer less if you do considerably less.

[wbsettle]

{snip}
This warranty is a Ford warranty. The best deal they have is for 84 months/ 60K miles. With $100 deductible it's $1420, with 0 deductible it's $1620. It covers "everything" except maintenance items.
.

That sounds like MSRP pricing. Like everything else at the dealership, it's negotiable. A similar 4Runner warranty was $1000-1200ish back when mine was still eligible. However, one or two industrious sales guys became aware of one of the 4Runner enthusiasts sites and were selling them, at least for a while, in the $600-700 range. You don't have to buy from the local dealer or even in state...hit the Ford/Exploder (sorry, couldn't resist) forums and see what's the real going rate.

With your predicted low mileage, I'd say the odds are even more in favor of *not* needing it. Time alone should do very little to most of the non-wear items that would actually be covered. Beyond replacing a tranny, you'd rally have to have some sort of catastrophic failure, IMO, to spend more than $1K in covered repairs during the extended period. The A/C compressor (not always covered) is probably the only other single ticket item that would exceed that price. Alternator, water pump, starters, switches, sensors, even computers are invidiually going to check in well under.

I've never purchased one (quick, find some wood) and have only had one repair item (an alternator) that failed beyond the basic, but before an extended would have run out out of 4 vehicles purchased new...and the alternator was only about $400ish so woudn't have really justified having the extended.

BTW, based on a couple of comments I've seen here, a little clarification may be needed. It sounds like you're expecting the 7/60 to start in July. Double check, but usually the 7/60term includes the 3/36 factory. IOW, you're not getting an additional 7/60k beyond the 3/36, but instead you'd be buying a 4/24 for that $1400-1600.

-Brent