Is an Extended warranty (ESP) worth it?

JEden8 · July 30, 2014

So our 2013 Limited is coming up on 30k miles. With only 6k miles left on the warranty we have been considering trading it in once it reaches that 36k miles or just purchasing the extended warranty as it was under $3k. Just looking for other opinions on this matter and what everyone else has done when their warranty is up.

peterk9 · July 30, 2014

I bought mine at the time I took possession of the vehicle. Keep in mind that any ESP starts on the day your Explorer was put into service. This means that is you buy a 48 month ESP, it is only good for 12 months from the time your factory bumper to bumper warranty expires. If looking to buy, check out post 28 in this thread;
http://www.explorerforum.com/forums/showthread.php?t=306553&highlight=ESP

I only keep my vehicles 3 - 4 years and don't put on a lot of mileage. My last 6 have all been leases and I will lease my next one as well. That way I'm not paying the entire vehicle cost.

Peter

182RG · July 30, 2014

JEden8 said:
Just looking for other opinions on this matter and what everyone else has done when their warranty is up.

Kept driving. What's magical about the 36K warranty expiration? Unless you are leasing, have you looked at the hit you will take on trade-in or private sale? It's pretty painful. If you need peace of mind, put an extended warranty on it.

peterk9 · July 30, 2014

If an extended warranty is put on after the 36k it will cost quite a bit more since the vehicle will be classified as a 'used vehicle'.

Peter

binaryman3 · July 30, 2014

I have researched the extended warranty since I have a special order 2015 explorer sport that will be ready for pickup Aug 5. The dealer uses Landcar Extended Warranty based out of Salt Lake City Utah and it is used by several dealers in the Denver Colorado Metro Area. It is around $2800 for a 6 year 72 thousand miles complete coverage with a $100 deductible that only applies after the factory warranty expires but they can use generic parts if available. I checked out the Ford ESP and it is about $3000 for the same 6 years and 72k miles and $100 deductible but includes genuine Ford parts and rental car coverage for same day or multi day service. You don't have to buy Ford ESP from the dealer but can buy it for the same price before you get to 12 months or 12k miles on your car from Ford or there is a 33% surcharge after that for the same coverage. Ford also allows you to pay monthly installments over time without interest if you buy it from them. Something to think about if you finance and add the warranty cost to your vehicle loan. I plan on buying and paying over 72 months so interest rates in the Denver area are 3.5% to 4.9% for 2015 models for 72 months. The Ford ESP is also transferable to another party if you sell the vehicle before the warranty runs out. Depends on how long you plan to keep the vehicle. You can wait until the 3 years are about up to buy an ESP but rates are always higher or have less coverage or generic parts at that point. Other ESP to consider is AAA in the US.

TerryVanpool · July 30, 2014

JEden8 said:
So our 2013 Limited is coming up on 30k miles. With only 6k miles left on the warranty we have been considering trading it in once it reaches that 36k miles or just purchasing the extended warranty as it was under $3k. Just looking for other opinions on this matter and what everyone else has done when their warranty is up.

First off I will say I never buy extended warranties.
If at the end of your new car warranty you do not have reason to think a major failure is immanent just set that $3k aside and keep on keeping on.
With proper maintenance your car will provide good service for several times that 36k miles. You can't judge the reliability of your car based on internet chatter. The only folks that you hear from on the internet are the few that have had problems, the people without problems never say anything.
I usually drive my car 3 or 4 years or 75 to 90 thousand miles. In 50 years I have never had a major issue after warranty.
Think about it, when you buy the extended warranty you are betting you will need it, Ford is betting you won't.
But if it gives you peace of mind maybe it is worth it to you.

tmg19103 · July 30, 2014

Everybody has their own preferences. I bought a 2011 some months back with 31k on it. It's a loaded XLT and I got a great deal and saved significantly over buying new.

My Ex had 4 months and 5k miles left on the factory warranty. I like to buy used with at least 3 months left on the factory warranty in case there is an unknown problem when buying used.

Otherwise I intend to keep this used vehicle for as long as I can (thinking about 8 years) as one of two cars I primarily rotate between, with the Ex getting fewer miles (will replace by Saab in 3 years or so having gotten 12 years total life and 9 years of ownership out if having bought used).

Didn't even consider the extended warranty for the Ex. I have powertrain for 5 years and will take my chances after that. If well maintained, vehicles will last a while without having major probs these days unless you get a lemon.

If it were me, I'd hold on to your Ex and not bother with an extended warranty, but everybody has there views on these things and I don't see right or wrong with personal preference.

Lewisra · July 31, 2014

binaryman3 said:
I have researched the extended warranty since I have a special order 2015 explorer sport that will be ready for pickup Aug 5. The dealer uses Landcar Extended Warranty based out of Salt Lake City Utah and it is used by several dealers in the Denver Colorado Metro Area. It is around $2800 for a 6 year 72 thousand miles complete coverage with a $100 deductible that only applies after the factory warranty expires but they can use generic parts if available. I checked out the Ford ESP and it is about $3000 for the same 6 years and 72k miles and $100 deductible but includes genuine Ford parts and rental car coverage for same day or multi day service. You don't have to buy Ford ESP from the dealer but can buy it for the same price before you get to 12 months or 12k miles on your car from Ford or there is a 33% surcharge after that for the same coverage. Ford also allows you to pay monthly installments over time without interest if you buy it from them. Something to think about if you finance and add the warranty cost to your vehicle loan. I plan on buying and paying over 72 months so interest rates in the Denver area are 3.5% to 4.9% for 2015 models for 72 months. The Ford ESP is also transferable to another party if you sell the vehicle before the warranty runs out. Depends on how long you plan to keep the vehicle. You can wait until the 3 years are about up to buy an ESP but rates are always higher or have less coverage or generic parts at that point. Other ESP to consider is AAA in the US.

Those are way over priced, look online for a Ford Premium Care. Try http://andersonandkoch-ford-warranty.com/, also there is a coupon code that I can't remember that will save over another $100. I got my 5 year 75,000 mile $50 deductible for less than $1100. Got a quote from that website then my dealer matched it.

peterk9 · July 31, 2014

See post #2 and the link.

Peter

Halwg · July 31, 2014

Who really thinks they are going to need a $3000 extended warranty within 72,000 miles? The last Explorer I had, a 2010, didn't even need brakes at 72,000. It's just a gimmick to get more money from the consumer. If you feel that the vehicle you are buying is that poorly designed and built that you are going to need those kinds of major repairs within 6 years, 72,000 miles, I would seriously consider another vehicle. You have added a significant cost to the price of your new vehicle.

JEden8 · July 31, 2014

Thanks for all of the replies and information! I'm going through the links that were provided. A lot of you have said not to purchase one. The only reason that I was looking at the extended warranty was because of all of the electronics that are involved. That is my main concern. My wife loves the car and has said she'll drive it till the wheels fall off so as long as she's happy then I'm happy. Happy wife = happy life am I right? I was looking at other's opinions regarding the warranties and all. Thanks again for everything! Lots of good info/opinons!

binaryman3 · July 31, 2014

Lewisra said:
Those are way over priced, look online for a Ford Premium Care. Try http://andersonandkoch-ford-warranty.com/, also there is a coupon code that I can't remember that will save over another $100. I got my 5 year 75,000 mile $50 deductible for less than $1100. Got a quote from that website then my dealer matched it.

Yeah I know since I have been looking at other options. I am not going with the dealer ESP since they have about $1k in for their commission but if I do decide to go with an ESP I will look into buying Ford premium Care directly from Ford in the next year before the price goes up.

I have rarely used ESP warranties except when I had an 97 expedition that I put 130k miles on it and it was in twice under the ESP for a rear diff seal leaking and a bad oxygen sensor. My only concern for an ESP now is all of the electronics in the vehicle. Right now I just want to go with the factory warranty since I am averaging about 3-4 years between vehicles.

peterk9 · July 31, 2014

I've had extended warranties on the last 5 vehicles I've leased. Would I be money ahead if I had not? Certainly. Will I get an extended warranty on my next one? Definitely, if the lease term goes beyond the factory warranty. I look at it as an insurance policy. I have one on my car and on my house and hope I don't have to use them. But it's good to know that they are there in case I do. :thumbsup:

Peter

Halwg · July 31, 2014

peterk9 said:
I've had extended warranties on the last 5 vehicles I've leased. Would I be money ahead if I had not? Certainly. Will I get an extended warranty on my next one? Definitely, if the lease term goes beyond the factory warranty. I look at it as an insurance policy. I have one on my car and on my house and hope I don't have to use them. But it's good to know that they are there in case I do.

Peter

You shouldn't look at it AS an insurance policy. It IS an insurance policy. You are betting that something will go wrong, and the company issuing the policy is betting that it doesn't. They have several things in their favor. Most of the time things don't go wrong, they have your money UP FRONT, and they have that money from a lot of people.

To me it's a bad bet. Kind of like me going to a casino. Will I win occasionally, probably. Will the house come out ahead, DEFINITELY!

Some people need this peace of mind and are willing to front these companies thousands of dollars to get it. Me, I have a lot better uses for that several thousand dollars than to front it to some insurance company.

Caveat Emptor!

peterk9 · July 31, 2014

Not everyone pays it up front. I had the option to add it to my monthly lease payments. I have the same option with the vehicle and house insurance payments although I haven't had a mortgage for 14 years.

Peter

tmg19103 · July 31, 2014

peterk9 said:
Not everyone pays it up front. I had the option to add it to my monthly lease payments. I have the same option with the vehicle and house insurance payments although I haven't had a mortgage for 14 years.

Peter

Can't speak for extended car warranties as I never get them, but you do get a reduced rate on auto and home insurance for paying your premium up front.

peterk9 · July 31, 2014

The only thing you save here is the interest charges. My yearly cost for insurance is $502 for full coverage on my 2014 Lincoln. With interest the total monthly deductions come to $517.06. As far as I know there is no 'discount' for paying your ESP up front.

Peter

TexasExplorer3 · August 3, 2014

Extended Warranty Scam

Here's my take on the extended warranty scam. I bought one ($2k) and they paid $1.5k on a $6k failure (not Ford). I had to do a lot of work with the dealer to get this!
If you think you can get a 5:1 return on your "investment" in an extended warranty then it might be something to consider, otherwise pass and pay the repairs yourself.

tmg19103 · August 4, 2014

My girlfriend sold for a Jeep dealer back when she was in college.

The biggest thing they pushed was the extended warranty. It was their biggest money maker. Much better margins than selling the cars at invoice.

According to Consumer Reports, 55% of people who bought an extended warranty never used it. Of the 45% who did use it, on average, they spent more on the warranty than it paid for repairs.

Dealer/manufacturer wins in the majority of cases. Many of the things that tend to go from wear are not covered under and extended warranty.

AZmom · August 4, 2014

TMG, you are correct. I have found people pay MSRP for extended warranties after negotiating their purchase price. A lot of people are unaware you can purchase these outside of your dealer. (Yes, a Ford ESP). Once Ford refunds my Limited Explorers ESP, then I can purchase one for my Sport. Premium care 6/100 with $50 deduct $1270. The 7 year is $1400. I have been quoted $2500 for the same warranty. So if you wanted to buy that additional layer of protection- shop around.

The Finance department sells the ESP, LoJack, along with additional extras. My personal experience these folks are more pushy than salespeople.

Is an Extended warranty (ESP) worth it?

Carmax Maxcare warranty worth it?

Yes

Not at all

JEden8

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peterk9

182RG

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peterk9

binaryman3

TerryVanpool

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Lewisra

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JEden8

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