Extended warranty worth buying?

[alexgorod]

The Ford manager claimed the hoses were over-engineered - ie more expensive than necessary. That implies they should last longer than ones that will most likely replace them in the future.

I have hard time coming to the same conclusion.

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[Chuck]

Actually, the more important part of the warranty, IMO, is the Electric Vehicle Component Coverage of 8 years / 100,000 miles, with 70% of battery life guaranteed. Coupled with the Powertrain coverage of 5 years / 60,000 miles. The bumper to bumper warranty isn't really a concern of mine.

It will become a concern if the big screen goes out and it costs double what the warranty costs. My coworker has that issue with a 2014 Tesla. The screen went wonky last year and she forked out $4,500 to replace it..

 

[RickMachE]

People should understand that the difference between buying the warranty now vs. just before the 36 months / 36,000 miles expire is $100. And if you wait until until between 36 and 41 months, it's $150 more.

So, unless you care about (and are paying for that in your extended warranty) a free loaner on day 1 of a repair, waiting is probably better.

If you sell the vehicle and haven't used the extended warranty, you can get a prorated refund. If it's been used at all (like for that free loaner), you get bupkus. I can't imagine buying one (if I ever did) until just before the bumper to bumper warranty expired.

 

[Nklem]

For me it was $1612 for 8 years or 100k zero deductible for a brand new electric platform, in every way, from Ford.

I bought the premium care bumper to bumper with lighting. LED headlights are typically sealed and very expensive to replace. It also covers the screen, basically everything but wear items and cosmetics on the car (and hi voltage battery is already covered). For $200 per year, or $17/month, I feel a little better about this purchase and it was worth piece of mind.

 

[BBQ]

I think nowadays there are so many electronic components in the car and none of them can be a aftermarket parts found at local auto store. Plus only the factory trained tech knows how to work on them (not the mechanic at the gas station).

Going to the dealer twice already break even with the cost.

Back then I have a 2013 RAV4 EV (Tesla battery and powertrain). I had two motors replaced during my 4 years of ownership & 77k miles. Almost need to pay for the 2nd drive train as it just past 60k miles. That could have been a $14k parts alone.

My 2017 Bolt EV treat me well without an issue up to the date I had GM buyback @80k miles. I am not regretting spending extra few thousand upfront for the extended warranty as I don't want a repeat of "the nail biter" experience of the RAV4.

 

[Nklem]

That's a good question!

Yes. The premium care only lists exclusions since it covers so much! Hoses are not excluded. I agree the system is over-engineered and the risk is in the pumps(s).

 

[ARK]

In general, for any insurance (which is what an extended warranty is), if you can take the financial hit and be OK, it is better to skip the insurance/extended warranty. This is because the administrative costs just to run the program + the profit margin for the company make your average return terrible for insurance/extended warranties.

Yes, there are many people for whom it has saved a lot of money in the past. But there are far more for whom it ended up not being needed or did not pay for itself in the end.

This is true for a car, it's also true for the extended warranty you can buy on something like an iPad.

If you can afford to pay out of pocket if the item unexpectedly breaks without it being a big deal for you money-wise to repair it, the better financial move is to pass on the extended warranty/insurance.

Just to be clear, insurance makes sense for something like your home or your car, where in the event there is some disaster where your home is wiped out or you suffer (or cause) a major medical injury, most people can't deal with that simply with what is in their bank account (or even if they can, it would totally mess up retirement planning, etc). In this circumstance, insurance makes sense, even if it is 'inefficient'.

 

[generaltso]

If it's been used at all (like for that free loaner), you get bupkus.

That‘s not true. You can get a prorated refund even if you’ve used it. I’ve done it several times.

 

[ZuleMME]

I'd normally be firmly in the "don't get it" camp. But being what this car is and what Ford is known for... Coupled with the bumper to bumper parts being required on this car to manage/drive the powertrain/battery parts I decided it was well worth getting if the dealer would match the cheap Flood ford prices... And they did, financed in at my 0.9%. Can't complain much and if I don't need it I'll know better next time.

 

[MachTee]

Actually, the more important part of the warranty, IMO, is the Electric Vehicle Component Coverage of 8 years / 100,000 miles, with 70% of battery life guaranteed. Coupled with the Powertrain coverage of 5 years / 60,000 miles. The bumper to bumper warranty isn't really a concern of mine.

It's everything else though, such the B&O DSP which I had to get the dealer to update before it worked properly. Who knows if later on an OTA update (yeah funny) whacks it again. Plus the countless other electronics outside of the drivetrain. I have never purchased an extended warranty before, mostly because nearly every other car I owned had 4yr/50k bumper to bumper. Had Ford been 4yr/50k I might be less inclined to consider it.

I'm more worried about all of the electrical systems. Powertrain could be pretty limited to just the basic components. There's too many electronically controlled components these days for me to think that I will be okay with just a powertrain warranty. It's a small price to pay for piece of mind, in my opinion.

I'm with you.

People should understand that the difference between buying the warranty now vs. just before the 36 months / 36,000 miles expire is $100. And if you wait until until between 36 and 41 months, it's $150 more.

So, unless you care about (and are paying for that in your extended warranty) a free loaner on day 1 of a repair, waiting is probably better.

If you sell the vehicle and haven't used the extended warranty, you can get a prorated refund. If it's been used at all (like for that free loaner), you get bupkus. I can't imagine buying one (if I ever did) until just before the bumper to bumper warranty expired.

I wasn't aware that they let you add it up to 5 months after the factory warranty expires. Good to know.

For me it was $1612 for 8 years or 100k zero deductible for a brand new electric platform, in every way, from Ford.

I bought the premium care bumper to bumper with lighting. LED headlights are typically sealed and very expensive to replace. It also covers the screen, basically everything but wear items and cosmetics on the car (and hi voltage battery is already covered). For $200 per year I feel a little better about this purchase and it was worth price of mind.

Yes, when I went through the checkout process from Flood Ford, there was an option to add exterior lights for $70. Definitely will consider it, as you pointed out if/when these LED exterior lights fail, it'll likely be a costly whole unit replacement.

 

[EELinneman]

In general, for any insurance (which is what an extended warranty is), if you can take the financial hit and be OK, it is better to skip the insurance/extended warranty. This is because the administrative costs just to run the program + the profit margin for the company make your average return terrible for insurance/extended warranties.

Yes, there are many people for whom it has saved a lot of money in the past. But there are far more for whom it ended up not being needed or did not pay for itself in the end.

This is true for a car, it's also true for the extended warranty you can buy on something like an iPad.

If you can afford to pay out of pocket if the item unexpectedly breaks without it being a big deal for you money-wise to repair it, the better financial move is to pass on the extended warranty/insurance.

Just to be clear, insurance makes sense for something like your home or your car, where in the event there is some disaster where your home is wiped out or you suffer (or cause) a major medical injury, most people can't deal with that simply with what is in their bank account (or even if they can, it would totally mess up retirement planning, etc). In this circumstance, insurance makes sense, even if it is 'inefficient'.

Two things to consider: insurance on your house is required if you have a mortgage. It protects the lender and also protects you from the major costs provided the insurance company accepts the claim. The same may come into play for a car on lease or a loan, but I'm not familiar with the lending terms.

On the car, if it is used for business, then the warranty is almost a must as this is a revenue-producing item and you are amortizing the costs throughout the lifetime of the warranty. You can assume the cost risk yourself, but you will also have the loss of revenue or costs of a loaner for the outage. For most ICE vehicles a service plan falls into this too if you don't have a fleet.

For a first-generation BEV vehicle, the MME has been relatively reliable, but that is no guarantee going forward. It's a decision that people need to make of risk and cost early vs late.

 

[ARK]

Two things to consider: insurance on your house is required if you have a mortgage. It protects the lender and also protects you from the major costs provided the insurance company accepts the claim. The same may come into play for a car on lease or a loan, but I'm not familiar with the lending terms.

On the car, if it is used for business, then the warranty is almost a must as this is a revenue-producing item and you are amortizing the costs throughout the lifetime of the warranty. You can assume the cost risk yourself, but you will also have the loss of revenue or costs of a loaner for the outage. For most ICE vehicles a service plan falls into this too if you don't have a fleet.

For a first-generation BEV vehicle, the MME has been relatively reliable, but that is no guarantee going forward. It's a decision that people need to make of risk and cost early vs late.

I think the general principle still stands though. Us buyers know it's a first generation vehicle, but so did Ford's bean counters who were responsible for coming up with the numbers for this kind of program.

Is it possible Ford made a mistake and grossly underestimated how much they will have to pay out in claims? Sure. But that's unlikely and the house is very much stacked in their favor - they made the rules, after all.

To give an example, suppose 10 people paid $1,000 each for such a policy. Maybe the company anticipates paying out $8,000 in claims, $1,000 to administer the program, and $1,000 as their profit when all is said and done. The average policy holder would get back 80 cents for every dollar they put in here with this example.

Maybe that $8,000 is paid out in two claims to two people for $4,000 each. Those people who got back $4,000 for putting in $1,000 made a killing. The other eight people put in $1,000 got nothing.

You don't know which group you will end up in at the start, but you do know in the end, on average, buyers will lose money on the policy, even if some people come out ahead.

It's the same thing with Ford's extended warranty here. We don't know the exact numbers, but for sure they have not designed the extended warranty plan where they will have to divert money from elsewhere in the company to make up for a shortfall in premiums they collect.

I just think people should go into these plans eyes wide open about how they work, financially, from the company's perspective. Which goes back to the general point - if someone can handle an unanticipated car repair out of pocket, they are very likely to be better off passing on these plans, given that we can't tell what specific problems our vehicles will (or will not) experience in the future.

 

[zvez]

I've never bought an extended warranty before, but looking at the tech aspects (ie cost of replacing a sync 4 screen) combined with only 3 year original I went for the ford extended plan. The dealer knew I was very skeptical, so he gave me a pretty good deal, it was within a couple hundred dollars of the cheapest online quote I'd seen so I went with it.

 

[my2ndstang]

I bought the extended warranty. But not from my dealer at retail. They wanted over $3,000 for an 8 year 100,000 mile bumper to bumper warranty. I got mine online from Lombard Ford for about $1,600 which includes a free replacement fob once per year.

The key to extended warranty, if you get one, is to not pay retail.

How do you get the replacement keyfob? Do you just say you lost it and drive in with PAAK?

 

[Nklem]

I'd normally be firmly in the "don't get it" camp. But being what this car is and what Ford is known for... Coupled with the bumper to bumper parts being required on this car to manage/drive the powertrain/battery parts I decided it was well worth getting if the dealer would match the cheap Flood ford prices... And they did, financed in at my 0.9%. Can't complain much and if I don't need it I'll know better next time.

My dealer would not. They said buy it elsewhere. I gave them the last opportunity to match it. They wanted $700-$800 more for the same plan.

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