Who bought an extended warranty?

[Fins160]

I also do not purchase extended warranties. However, I think they can be worth-while depending on your approach to finances.

• If you are not going to bank the money to repair your vehicle in advance, get the warranty. When you have a failure, there's a fair chance it's covered under warranty if you have a good plan.
• If you are going to bank money, take the cost of the warranty and put it in a high yield savings, money market or low-risk mutual fund, depending on your tolerance for risk. Set aside a small amount of money each month and add it to that fund. When you have a failure, use this money for your repairs.

I prefer the second option for a few reasons:

1. Freedom: By saving instead of purchasing a warranty, I am not reliant on the warranty company when it's time to repair. I can go wherever I want for the repair, and decide how much I want to pay, without waiting for approval or being subject to any restrictions that might be placed by the warranty company.
2. Peace of Mind: By the end of the factory warranty I have enough money to cover everything but the most costly repairs, which are unlikely in the time-frame between the end of the factory warranty and end of the extended warranty.
3. No deductible. This is "lost" money on any repair that you don't have to pay if you're paying our of pocket.
4. I don't have to wait for failure. Warranty will take effect only when there's failure. In the chance I detect an issue and want to pro-actively prevent complete failure, I can do the repair on my time instead of waiting for the warranty repair to be approved.
5. Covers personal damage: If one of my kids breaks my touchscreen or dents the car, the extended warranty doesn't cover that. I would have to spend money on the warranty, and have money saved for non-warranty repairs. Here, I have the option of using personal insurance or my saved cash to repair non-warranty items.
6. Best case scenario, I have a pool of money that I didn't have to use, and can either save it for another car repair fund, or some other expense. Medium-case, I used some of the money, but still have some savings to jump-start my next fund. Worst-case, I used all the money, or maybe a little more, but was able to choose between repair or trade it in for another vehicle where I was able to use my savings as a down-payment

Again, both can be good options, I just feel one is "more good" than the other. Either is better than doing neither.

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[EVandSolar]

I have always purchased them as wee only paid dealer cost. I do not believe I will purchase another now that my wife has retired. We have never had to use one and we keep p all of our cars over 10 years. I do plan to trade in my Mach for either a next gen Mach (if there is one in 2-3 years) or another EV in that time frame.

Very sorry AKgrampy, not picking on you specifically, but this is the exact reason why extended warranties should generally never be purchased. They are a money making scheme pure and simple. There will always be the rare occasion when they benefit someone but for the vast majority, the house win. Extended warranties are for people who are bad at math and easily suckered by the salesman in the backroom convincing you the electronic display will go out and cost a fortune. In fact, this exact fear has been mentioned in this thread several times by folks who have been conned into buying the extended warranty. These money making schemes work too, as evidenced by over 50% of people who have been suckered into throwing their money away on them.

 

[EVandSolar]

I’ve bought 9 cars in the past 25 or so years. Number of times where an extended warranty would’ve paid off during the extended warranty period? 0. 6 of those cars had infotainment screens.

I get the peace of mind thing, trust me. For some people, it is well worth it. For me, not so much.

I think this is important Information to discuss if we truly want to help our fellow forum members. Extended warranties are one of the worst financial purchases that can be made.
I imagine one line of thinking is that people are afraid they won't have XYZ $ available to cover an out of warranty repair. One way to ensure this will always be the case is to continue lining dealership and warranty companies pockets. The reality is, if someone does not have 3-6 months of living expenses saved in cash for emergencies, they should not be buying extravagantly expensive luxury EV's with huge monthly payments.

Here's an idea for those that have been suckered into throwing a small fortune away on extended warranties over the years: From this day forward, NEVER buy an extended warranty again. Instead, put the money you would normally spend on an extended warranty into a separate savings account into a good, safe money market fund. Put the extended warranty fee into this account every time you buy "stuff". Before you know it, you will have far more money than you need to cover any out of warranty repair.

Yes, I didn't pull any punches on how this was worded. If you are guilty of wasting your hard earned money on these warranties, stop the bleeding and self insure.

 

[Ev Blau]

Yeah, I would expect that's exactly what the dealer would tell you.

Granger doesn't have to be around for a while. You purchase the ESP plan through them, but it's fulfilled by Ford.

Ok, let me understand. Let’s say I cancel my Triton ESP but buy an ESP from Granger. They go out of business. My MME has an electrical issue and I take the car into a Ford dealer. How does that dealer call Granger with my Contract number to verify coverage? My Ford dealer told me that the service provider would call the phone number on the ESP to verify coverage. If Granger is out of business or they don’t answer the phone to verify coverage, how do I get warranty service from a mechanic?

Just asking because I usually don’t buy extended warranties but a newish car model, a newish industry, and essentially a gorgeous computer on wheels leads me to think this might be a prudent purchase. Yes?

 

[MacherAWD]

I think this is important Information to discuss if we truly want to help our fellow forum members. Extended warranties are one of the worst financial purchases that can be made.
I imagine one line of thinking is that people are afraid they won't have XYZ $ available to cover an out of warranty repair. One way to ensure this will always be the case is to continue lining dealership and warranty companies pockets. The reality is, if someone does not have 3-6 months of living expenses saved in cash for emergencies, they should not be buying extravagantly expensive luxury EV's with huge monthly payments.

Here's an idea for those that have been suckered into throwing a small fortune away on extended warranties over the years: From this day forward, NEVER buy an extended warranty again. Instead, put the money you would normally spend on an extended warranty into a separate savings account into a good, safe money market fund. Put the extended warranty fee into this account every time you buy "stuff". Before you know it, you will have far more money than you need to cover any out of warranty repair.

Yes, I didn't pull any punches on how this was worded. If you are guilty of wasting your hard earned money on these warranties, stop the bleeding and self insure.

Can we stop being condescending? Ice warranties cost much more. This car has numerous issues that can cost thousands, one modem, what if your car stops taking OTAs, screen craps out.

I make very smart financial decisions, I have never made a car payment, I evaluated this situation and decided a year later to buy. Do not lump this into "all warranties are a mistake". We should put a pin in this thread and all report back in 10 years how it all worked out for us.

 

[EVandSolar]

I used to never buy them too... when cars were basically mechanical machines.

My 1st Prius, bought new in 2003 when my BMW had an engine heart attack at 199,700 or so miles, decided to fry its "ECU" i.e. a central electronics control unit, within something like a month before its extended warranty expired... exact dates or relevant mileage escape me now. That was a $990 unit, as quoted to me at the time, although the replacement labor was about 20 minutes.

Three cars later, the 2015 Fusion Energi also had something weird go bad... something (this car was electronically much more complex) that essentially controlled the display of formerly manual button functions on its 8-inch central display. As a result, I had no heat, no A/C, no radio and I couldn't control the TOU electric charging time in that Energi.

Extended warranties paid for both electronic repairs on both cars.

I had two other Priuses in between these two cars - one got hit by lightning while parked at the house and was insurance-totaled early in its life, and my final Prius was fine until it just started to fall apart with age and hard use.

So, that's 2 for four.

Prior to that 1st Prius, I used to laugh at the concept.

Even in this extremely unlucky use case scenario, $1300 not spent on just four extended warranties with compounded interest over the years totaling $5,200 plus compound interest, so maybe $6-$8,000, would have lots of money still left in a self insured maintenance fund earning interest, rather than lining the pockets of dealers.

 

[MacherAWD]

Ok, let me understand. Let’s say I cancel my Triton ESP but buy an ESP from Granger. They go out of business. My MME has an electrical issue and I take the car into a Ford dealer. How does that dealer call Granger with my Contract number to verify coverage? My Ford dealer told me that the service provider would call the phone number on the ESP to verify coverage. If Granger is out of business or they don’t answer the phone to verify coverage, how do I get warranty service from a mechanic?

Just asking because I usually don’t buy extended warranties but a newish model, a newish industry, snd essentially a gorgeous computer on wheels leads me to think this might be a prudent purchase. Yes?

The granger warranty showed on Ford. Com for my profile within minutes. It's a Ford warranty on a Ford car

 

[generaltso]

Ok, let me understand. Let’s say I cancel my Triton ESP but buy an ESP from Granger. They go out of business. My MME has an electrical issue and I take the car into a Ford dealer. How does that dealer call Granger with my Contract number to verify coverage? My Ford dealer told me that the service provider would call the phone number on the ESP to verify coverage. If Granger is out of business or they don’t answer the phone to verify coverage, how do I get warranty service from a mechanic?

They don't. When you buy a Ford ESP from ANY dealer, it gets tied to your VIN and any Ford dealer can see that and service the car. Your dealer is lying to you because they don't want you to cancel the 3rd party service plan.

 

[Ev Blau]

The granger warranty showed on Ford. Com for my profile within minutes. It's a Ford warranty on a Ford car

Aha! Thanks for your patience. I’ll now check Ford.com to see if my Triton warranty shows up there. My initial concern was this Triton ESP was a third party plan, not affiliated with Ford, and that gave me pause.

If it only costs $100 to cancel but I save $1000 with Granger, that’s a no-brainer!
Thanks again for offering such good advice.

 

[generaltso]

Aha! Thanks for your patience. I’ll now check Ford.com to see if my Triton warranty shows up there. My initial concern was this Triton ESP was a third party plan, not affiliated with Ford, and that gave me pause.

It won't. Triton is 3rd party, not Ford.

 

[EVandSolar]

Can we stop being condescending? Ice warranties cost much more. This car has numerous issues that can cost thousands, one modem, what if your car stops taking OTAs, screen craps out.

I make very smart financial decisions, I have never made a car payment, I evaluated this situation and decided a year later to buy. Do not lump this into "all warranties are a mistake". We should put a pin in this thread and all report back in 10 years how it all worked out for us.

We either believe the repair costs will exceed what we spend on the warranty, which means the warranty company goes out of business because they are dumb and then we don't have warranty coverage anyways even though we spent money on it, or they are smart enough to know they are charging far more than needed on average to cover out of warranty repairs. In this much more likely scenario, self insuring is smarter and comes out way ahead. Perhaps this is the only item you have purchased an extended warranty for, but for many, they are buying them on everything they purchase, which really adds up and improves the likelihood that self insuring comes out ahead.

Insurance is for catastrophic losses that the vast majority of people cannot easily self insure for, such as life, home owners insurance or health insurance where losses can easily be hundreds of thousands. However, these insurances often tend to be rather affordable in the grand scheme of things.

CBS news:
https://www.cbsnews.com/news/not-just-the-scams-all-extended-auto-warranties-are-a-bad-deal/

 

[agdad]

Exactly. You have no idea how many items I purchase and have shipped to friends in Colorado then they ship here. Garage door openers, plumbing fixtures, many many aftermarket car parts…. Looks like I’ll be purchasing my next vehicle out of state.

Or just come to Texas !

 

[MacherAWD]

We either believe the repair costs will exceed what we spend on the warranty, which means the warranty company goes out of business because they are dumb and then we don't have warranty coverage anyways even though we spent money on it, or they are smart enough to know they are charging far more than needed on average to cover out of warranty repairs. In this much more likely scenario, self insuring is smarter and comes out way ahead. Perhaps this is the only item you have purchased an extended warranty for, but for many, they are buying them on everything they purchase, which really adds up and improves the likelihood that self insuring comes out ahead.

Insurance is for catastrophic losses that the vast majority of people cannot easily self insure for, such as life, home owners insurance or health insurance where losses can easily be hundreds of thousands. However, these insurances often tend to be rather affordable in the grand scheme of things.

I think the repair costs of this car will exceed the warranty costs. This is my 3rd EV, I didnt even consider a warranty on a Leaf or Bolt, and I didnt have to make a single repair on either. That said, Ford and whoever is backing their warranty have no clue how well this car will hold up over time. Ford has never built anything like this.

So yes, I have never purchased an extended warranty on anything, but I also evaluate each situation. I fully intend to keep this car for 8-10 years, and as much as I love it, and love EVs I do not think this particular one will be very reliable. Again, GM has a battery warranty and is replacing EVERY Bolt battery from 2017-2022, clearly they (LG) are loosing money on that warranty.

 

[snowdoggie]

If you ever have to replace the center console alone, you're going to pay more than you would for the warranty. It's practically a no-brainer for cars that are all electronic components.

That's exactly what the finance person said... do you work for ford?

 

[Fins160]

I think the repair costs of this car will exceed the warranty costs. This is my 3rd EV, I didnt even consider a warranty on a Leaf or Bolt, and I didnt have to make a single repair on either. That said, Ford and whoever is backing their warranty have no clue how well this car will hold up over time. Ford has never built anything like this.

It's definitely possible that the repair costs could exceed the extended warranty costs on an individual vehicle. It's an individual individual decision on how and how much to mitigate the risk of failure (warranty and/or savings).

On the balance, it is highly unlikely that the extended warranty will be a loss for Ford. An extended warranty covers failures in the flattest part of the bathtub curve, where there is the lowest risk of failure. Every component put into the MachE (just like the Leaf or Bolt) has a lifetime failure analysis done, whether it's mechanical, electrical or electronic. They know with pretty high certainty how each component will perform on average. That's also why different parts of the car have different time and miles of coverage.

The factory warranty covers "Early" mortality, to ensure customer satisfaction and deal with uncertainty, especially in newer technologies. An extended warranty covers "constant" (random) failures, where likelihood of failure is at it's lowest. Wear-out failures happen after a typical extended warranty, and is only covered by very pricey warranty plans.

Again, GM has a battery warranty and is replacing EVERY Bolt battery from 2017-2022, clearly they (LG) are loosing money on that warranty.

Just to be clear, the Chevy Bolt battery issue this is a recall, not a warranty replacement. Even vehicles outside of warranty are subject to free repair for recall. Think of the Takata Airbags. Even if it was warranty, this type of replacement would be covered under the Ford Factory Warranty (8 years, 100,000 miles).

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