Although this thread is to help drive sales, I will give you guys at Granger Ford credit for a very well written and informative post. You’re in the business of making money through selling of vehicles and services, so everyone should understand the context of the post.It is not breaking news that prices are up on everything. Inflation has run high, and the federal reserve doesn’t think the battle is over yet to get inflation back down to 2%. One of the areas that has seen some of the biggest price increases is the automotive repair industry. The Federal Reserve Bank goes in detail to explain the reasons why, but it boils down to a tight workforce that is in high demand as well as a parts shortage.
I was curious to see how much that has affected our service department, so I pulled all our repair orders that were paid by an extended warranty company for 2 time periods (Jan-Apr 2020 and Jan-Apr 2024) to see how it has changed at our shop. Through the first 4 months of 2020 our average repair order covered by an extended warranty was $776, and in 2024? An eye-popping $1841! That is a 237% increase in 4 years. Admittedly we have a small sample size being only one dealership. But for the last 3 years, the federal reserve has registered a 5%, 13% and 8% rate of inflation for motor vehicle repair, well out-pacing overall CPI.
So what can be done to minimize the effects of repair inflation? One of the lesser talked about benefits of an extended warranty is that you are locking in tomorrow’s repairs at today’s repair prices. We work with both Mopar and Ford extended warranties and both of them have many actuaries that determine our cost for their plans. The feedback I’ve received from both manufacturers suggests prices will continue to rise in the future, because repair cost increases are well outpacing the reserves set up to cover them. Ford has scheduled a price increase in August of this year and Mopar just increased its prices in February and is considering doing it again.
I again was interested in seeing what increases we’ve seen over the last 2 years of selling service contracts and our average service contract price has increased 14%, much less than the 23% the CPI repair costs have increased at the same time. None of us can predict the future, but in the past inflation has proven to be sticky and takes longer than anticipated to get fully under control.
Another tool we’ve added to our websites is the ability to pay monthly. We realize increased prices have eaten away at monthly budgets and spending over $2000 on extended warranty coverage can be hard to budget for. So, we added a monthly payment option that allows our customers to pay for their warranty over an 18-month term. Our average monthly payment is taken automatically and comes out to less than $100/month.
You can find our coverage options for both Mopar and Ford on our websites.
www.buymoparwarranty.com
www.grangerfordextendedwarranty.com
..Ford has too many outstanding shares for their stock to go up like other stocks..I first bought Ford stock when it was 40 a share...never going to see that price again..
Good point, but that's how the bouncing ball bounced on a l
I've seen it between $5 and $25, the latter when I bought my Bronco.
Damn, during COVID I bought ford stock for below $5/share iirc.
How about this one..Dec 31,2008....Ford stock was ..1.32 cents,down 60 something percent..
Thank you for the kind words.
Maybe we'll start taking gratuities.
I agree, definitely positives to investing as well. However, when I started full-time in 2011 our master certified technicians were paid $25/hr, that pay rate 13 years later is well over double that. Granted, we are a small sample size, but I don't see a rush of young people entering the skilled trades yet, so the demand greatly outstrips the supply in this area, and I believe will for the forseeable future.Im sorry but tying those numbers solely to inflation is disingenuous - at best. My anecdotal evidence regarding cost to repair/maintain is that prices are up a little over the past few years, but not a ton.
There are many decent reasons to get extended warranties (I get them on most of my ICE cars). But, this takes it a bit too far. After all, if you invested $2k in 2020 in an S&P index fund after the downturn, you would have $4k+ in 2024. This post assumes you just let your money deflate.
So......I wouldn't go there with this
I agree on this, if you are keeping your vehicle long-term, the people that do trade out help pay the actuarial costs of the people that keep the vehicle through the life of the contract.Ironically, over 40% over buy coverage and trade/sell their vehicle before the warranty ends. That is an actuarial helper too.
I anticipate warranty costs to go up next year. With the drop in the available capital market, domestic reindustrialization, and oil market instability, economists are predicting steady 4% inflation over next 3-5 years. Now would be a good time to get a long-term warranty contract for those that are really keeping their Bronco (or other vehicles).
Dang Bronco owners keep buying stuff and driving up demand
[Don't go political on this. It's a global economic issue. Keep your 2 cents in your pocket.]
Yes, that was changed in October of 2023 I believe. I could be getting my years off, but they added another 2 years and 25,000 miles for avaialble coverage.
Thanks for the response, Zach. I tried to wait to purchase my ESP from Granger (because you guys are the best Ford dealer) but I ran up against the 12k mileage before your plans were in place. If I buy another Ford in the future, it’ll definitely be at Granger. Thanks again for everything you guys do for the Bronco community.
