Warranty cost for a dealer?

[Nc211]

I’m curious, for a dealership to issue the extended warranty on a new car sale, what’s the typical cost incurred by the dealer to do so? Or perhaps an easier way of asking, what’s the typical profit margin for a dealer to sell the extended warranty? I curious because I’m at MSRP and haven’t taken delivery yet, and starting to see the drops in my market now of a few to several thousand below MSRP for new 2024’s, and I also saw my first Bronco TV commercial last night ever, signaling a “Summer SUV” sales pitch. Have to assume incentives and holdbacks coming soon too to help move the inventory. Wondering if negotiating for an extended warranty is perhaps a good idea now to justify the MSRP. I don’t want to screw over the dealership, I like these guys and want a good relationship with them.

Sponsored

 

[BigFootie]

I’m curious, for a dealership to issue the extended warranty on a new car sale, what’s the typical cost incurred by the dealer to do so? Or perhaps an easier way of asking, what’s the typical profit margin for a dealer to sell the extended warranty? I curious because I’m at MSRP and haven’t taken delivery yet, and starting to see the drops in my market now of a few to several thousand below MSRP for new 2024’s, and I also saw my first Bronco TV commercial last night ever, signaling a “Summer SUV” sales pitch. Have to assume incentives and holdbacks coming soon too to help move the inventory. Wondering if negotiating for an extended warranty is perhaps a good idea now to justify the MSRP. I don’t want to screw over the dealership, I like these guys and want a good relationship with them.

Look at the Granger $25 over cost deal for the Ford ESP plan

https://www.bronco6g.com/forum/thre...t-granger-ford-payment-plans-available.37719/

 

[flip]

I'm confident you aren't going to screw your dealer over. If you do get a warranty, verify what they're selling you is what it is. Lots of places have an in-house plant that has tons of conditions, try to pass off plans that aren't Ford Protect and/or try to tag on a bunch of additional coverages that you likely don't need.

We sell both Ford and Zurich but mostly Zurich because they pay retail parts and door labor where Ford pays at low warranty rates. Most dealers and outside shops accept Zurich so you aren't tied exclusively to Ford dealers for repairs. Regardless of the brand, I suggest getting the premium/comprehensive which generally gives you the most coverage. If the finance office is truly doing their job, they'll ask you a bunch of questions to determine the plan and coverage time/miles that fits your criteria. No need to get an ESP if you trade every 3 years and generally don't over 12K miles per year.

There are a ton of really shitty warranties out there, we actually keep a list of those we don't accept but can't find a black ball sheet but the one I hate the most is The Mechanic. Pricing will depend on the plan, type and length of coverage, deductible but biggest factor is the dealer's business model and how the finance person is paid. Granger is probably the best deal on-line and transparent so if you want a Ford plan, either price them against your dealer (roll it into your financing when you purchase the vehicle) and if they won't try to get close, get from Granger.

 

[JohnnyBronco]

The dealer won't throw in an extended warranty as they buy that separate from the car. Or if they do the cost comes put of their margin.

There are programs that some dealers participate in and tack on for "free" on every new car they sell. Local Subaru (who also sells VW and BMW) includes Warranty Forever on all new Subies. They are buying and "reselling" a much higher volume of these warranties so I imagine their cost could even be half of average

Latest ads I have seen for vehicle discounts are $1000 off full size Broncos and $2000 off Sports. This is thd first time the 6g Bronco has had any factory incentive. So yeah, buy at msrp and dealer can apply your $1000 against a $500 warranty and they will smile all the way to the bank.

 

[MtnTopComms]

I am considering going the granger route but my concern is that it doesn't cover everything (in the premium plan). I want something that literally covers everything.

 

[BlueBronco]

I am considering going the granger route but my concern is that it doesn't cover everything (in the premium plan). I want something that literally covers everything.

What does the premium Ford plan that Granger sells not cover that you are concerned about? I would be very wary of a 3rd party plan that says they "cover everything." There will be lots of fine print, stipulations and loop holes to sift through.

I don’t want to screw over the dealership, I like these guys and want a good relationship with them.

OP, are you sure your dealer feels the same way about you? I doubt you will get them to throw in an extended warranty Your salesman probably isn't authorized to do so as it is the finance guys product to sell. And the finance guy has no motivation to do so because by the time you see him the dealership already has the sale. Your best bet is to find a similarly equipped Bronco at an advertised discount (or go to another dealer and negotiate a price) and use that as leverage.

 

[Nc211]

Thanks all! This is a cash buy, no financing incentives for the dealer to earn. I am literally bringing them the check in full when it arrives. I'm ok with paying the MSRP even though the prices are starting to move downward under it now in my area, roughly around $2k-$3k is what I am seeing online/advertised. Granted might be a shell game with countered fees tacked on elsewhere.

I plan on keeping this car for at least 10 years. Will be my primary for the next couple of years, then likely shift to a 3rd car position for when weather or mood dictates its use. I'll likely put about 15k on it a year in primary mode.

Looking at the Grainger site (thank you), doesn't seem to make much sense to buy one now if the clock starts when I buy the car initially. Seems like double coverage during the main warranty period, so I would only really go after the 10-year 100k option. I want coverage on the big ticket items, like transmission or those pesky cam phasers and engine related. She's no Toyota Corolla, and I don't expect it to be. But if the engine takes a dirt nap or the transmission goes on permanent vacation in year 6, I'd like for it to be covered by Ford (minus my $200).

My bronco seems to be unique now with the modular bumper and brush guard, 4.27 rear lock, tow package, dual-top for a non-sas OBX, otherwise I would have gone the lot inventory route instead of order/wait route.

 

[BigFootie]

Thanks all! This is a cash buy, no financing incentives for the dealer to earn. I am literally bringing them the check in full when it arrives. I'm ok with paying the MSRP even though the prices are starting to move downward under it now in my area, roughly around $2k-$3k is what I am seeing online/advertised. Granted might be a shell game with countered fees tacked on elsewhere.

I plan on keeping this car for at least 10 years. Will be my primary for the next couple of years, then likely shift to a 3rd car position for when weather or mood dictates its use. I'll likely put about 15k on it a year in primary mode.

Looking at the Grainger site (thank you), doesn't seem to make much sense to buy one now if the clock starts when I buy the car initially. Seems like double coverage during the main warranty period, so I would only really go after the 10-year 100k option. I want coverage on the big ticket items, like transmission or those pesky cam phasers and engine related. She's no Toyota Corolla, and I don't expect it to be. But if the engine takes a dirt nap or the transmission goes on permanent vacation in year 6, I'd like for it to be covered by Ford (minus my $200).

My bronco seems to be unique now with the modular bumper and brush guard, 4.27 rear lock, tow package, dual-top for a non-sas OBX, otherwise I would have gone the lot inventory route instead of order/wait route.

I think the only issue with waiting is besides the price going up each year, I don’t think you get the same price at 3yrs/36k miles as you do when it’s less than 1 yr/12k miles. I’m sure @Zach@Granger can chime in here with a more intelligent answer than I can provide.

 

[HoosierDaddy]

I think the only issue with waiting is besides the price going up each year, I don’t think you get the same price at 3yrs/36k miles as you do when it’s less than 1 yr/12k miles. I’m sure @Zach@Granger can chime in here with a more intelligent answer than I can provide.

That sounds correct, the longer you wait, the more it is.
Consider also that the extended warranties still start from the day the vehicle was sold or put into service.

Also note, for those reading along, you can still get Ford's ESP even after the original 3/36 expires.
Yes, there are mileage/time limits, but they are beyond the 3/36.
Zach actually commented on that before.

This can all be learned from a Google search if you're so inclined.

 

[Zach@Granger]

I think the only issue with waiting is besides the price going up each year, I don’t think you get the same price at 3yrs/36k miles as you do when it’s less than 1 yr/12k miles. I’m sure @Zach@Granger can chime in here with a more intelligent answer than I can provide.

Thanks for the tag.

There is a price increase at either 12 months or 12,000 miles (whichever comes first). There is another increase at 36 months and 36,000 miles. There are also at a minimum annual increases based upon inflation. This traditional happens in October, although this year I believe it is going to happen in August. These adjustments have been higher lately to try to keep pace with inflation. I believe it was a 5% bump last year in price.

 

[Zach@Granger]

I’m curious, for a dealership to issue the extended warranty on a new car sale, what’s the typical cost incurred by the dealer to do so? Or perhaps an easier way of asking, what’s the typical profit margin for a dealer to sell the extended warranty? I curious because I’m at MSRP and haven’t taken delivery yet, and starting to see the drops in my market now of a few to several thousand below MSRP for new 2024’s, and I also saw my first Bronco TV commercial last night ever, signaling a “Summer SUV” sales pitch. Have to assume incentives and holdbacks coming soon too to help move the inventory. Wondering if negotiating for an extended warranty is perhaps a good idea now to justify the MSRP. I don’t want to screw over the dealership, I like these guys and want a good relationship with them.

$1500-2000 is the average markup on an extended warranty. Of course that depends on terms, etc.

 

[flip]

Here's the '24 Premium Care ESP brochure. Make sure to look at the bottom for what is generally excluded. Unless you purchase additional coverage, it doesn't include stuff like wheels, tires, brakes, body panels, exterior trim, glass, interior trim, seat covers, carpet, trim panels, battery, remotes, steering wheel, hard top, soft top, etc. Base warranty will cover some of these items but I've yet to see a stand alone plan, Ford or other, that mirrors the base factory coverage.

 

[Zach@Granger]

Thanks all! This is a cash buy, no financing incentives for the dealer to earn. I am literally bringing them the check in full when it arrives. I'm ok with paying the MSRP even though the prices are starting to move downward under it now in my area, roughly around $2k-$3k is what I am seeing online/advertised. Granted might be a shell game with countered fees tacked on elsewhere.

I plan on keeping this car for at least 10 years. Will be my primary for the next couple of years, then likely shift to a 3rd car position for when weather or mood dictates its use. I'll likely put about 15k on it a year in primary mode.

Looking at the Grainger site (thank you), doesn't seem to make much sense to buy one now if the clock starts when I buy the car initially. Seems like double coverage during the main warranty period, so I would only really go after the 10-year 100k option. I want coverage on the big ticket items, like transmission or those pesky cam phasers and engine related. She's no Toyota Corolla, and I don't expect it to be. But if the engine takes a dirt nap or the transmission goes on permanent vacation in year 6, I'd like for it to be covered by Ford (minus my $200).

My bronco seems to be unique now with the modular bumper and brush guard, 4.27 rear lock, tow package, dual-top for a non-sas OBX, otherwise I would have gone the lot inventory route instead of order/wait route.

If you buy a brand new vehicle and the factory warranty runs out, the warranty then would be a used vehicle warranty an that starts when you purchase it, but there are requirements. If the factory warranty is still on the vehicle, then the warranty would add extra years to it counting the factory warranty. Now waiting, prices can increase for sure!

Is this what you are meaning?

Sponsored