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What are you guys paying for extended warranties?

Mr. Nice

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I generally pass on extended warranties. Initially I did on the Bronco as well (glad I did, hard to make an informed decision in the F&I box).

However, with the FE Bronco:
  1. First year of totally new model
  2. Intend to keep long term
  3. Limited driving (not a daily driver)
  4. Numerous electronic modules
Could easily burn through $2700, which is what one might have from a typical $2k investment over 5 years, likely less given current interest rates.
Do people not understand extended warranties are one of the most profitable add-ons? Why do dealers/companies sell them?
There're not for you, there for them. You may as well just go to the Casino. I'll bet some folks will argue they also are a good deal.

Adding insult to injury people choose to finance these warranties.
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LSTLAF

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Do people not understand extended warranties are one of the most profitable add-ons? Why do dealers/companies sell them?
There're not for you, there for them. You may as well just go to the Casino. I'll bet some folks will argue they also are a good deal.

Adding insult to injury people choose to finance these warranties.
While you might be right about the profitability of the add-on to the dealership:

1) Most people can't afford the repairs that might come without additional coverage.

2)Many people without coverage will otherwise 'finance' their repairs on their 24.99% interest credit cards (or higher) and pay them off on a minimum monthly payment.

3) A lot of these same people already drop a portion of their monthly income in a casino in one form or another...adding real "insult to injury"

As someone who has never needed it (knock on wood), auto insurance is compulsory in most States and has not provided any value other than piece of mind....much like an extended warranty.
 
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BennyBronco69

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Neither is a car (well outside of these shortage days lol).

It's all relative to what you can afford as possible throw away $ vs your piece of mind and "what ifs".

I'm only speaking for myself here. But if I'm worried about ROI I would spend 20k on a Honda to take me from A to B.
But since I like, and can afford, more expensive vehicles I'll take the warranty.

What's 1,800 more on a 60k vehicle? If you turn veh in early you also get a prorated amount back.
 

LSTLAF

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Extended warranty? No Thank You!

Want peace of mind? Put the cost of the extended warranty ~$2k into your investment of choice and don't touch it. If you have a problem 5 years down the road, use the investment to fix it. If you don't have a problem, you have a little extra cash you didn't flush down the toilet.

A few important factors you're overlooking:

1) 6% (or more in reality) year over year inflation. (it's not going down anytime soon)

2) Poor / low return on most 'Average Joe' investments (unless you're a big time crypto miner). You MIGHT get 8% on a S&P index fund. (less inflation nets you 2%) Then in '5 years' when you need the cash you have early withdrawal penalty (if in an IRA) and other taxes on top of that ....

3) Most people are more likely to spend than invest. So your $2,000 would already be spent elsewhere....like Bronco accessories.

4) 65.6% of Americans do not have a $2,000 emergency fund. 1 in 3 cannot afford a $500 car repair bill without incurring debt.

I'm financing in an $1,100 'no questions asked' bumper-to-bumper extended warranty with a $50 deductible, that suits my low low mileage needs at well below 2% over 4 years. I'd consider that a good investment...even if I never need to use it.

If the first extended warranty repair after 3 years cost $1,264.48 (or more) I've made the right decision.

With regard to 'peace of mind' See my auto insurance analogy in a previous post.
 

Mr. Nice

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Neither is a car (well outside of these shortage days lol).

It's all relative to what you can afford as possible throw away $ vs your piece of mind and "what ifs".

I'm only speaking for myself here. But if I'm worried about ROI I would spend 20k on a Honda to take me from A to B.
But since I like, and can afford, more expensive vehicles I'll take the warranty.

What's 1,800 more on a 60k vehicle? If you turn veh in early you also get a prorated amount back.
First of all I'll bet half the folks that buy a 60K Bronco have no business doing so. THIS VEHICLE IS A TOY not a necessity. To spend an extra 1-3K (that will be most likely financed) is money most of them can't afford. These contracts also carry deductibles and exemptions. Fear sells.

It's a paradox. If you really have the money to afford the vehicle you probably can afford to self-insure and you will be ahead in the long run. If you don't you should be looking a cheaper alternative rather than adding to the problem.

"Google" car warranties see what the experts say. It's your money.

BTW I have never ever bought extended warranty for anything, much less one for a car, and do you know I have never ever NEEDED one.

That's my "piece of mind"...
 

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I paid $1100 for a 7 year extended warranty. One of the forum threads mentioned Flood Ford (floodford.com) as heavily discounting the Ford ESP contracts, which they do. My dealer matched their price after initially quoting me $2300 for the same thing.
This is good info.
I had no idea this company sold Ford warranties. My build date is Jan 3 so I will definitely use this to try to get the dealer to price match flood. Thanks.
 

Mr. Nice

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Neither is a car (well outside of these shortage days lol).

It's all relative to what you can afford as possible throw away $ vs your piece of mind and "what ifs".

I'm only speaking for myself here. But if I'm worried about ROI I would spend 20k on a Honda to take me from A to B.
But since I like, and can afford, more expensive vehicles I'll take the warranty.

What's 1,800 more on a 60k vehicle? If you turn veh in early you also get a prorated amount back.
Ok, how about spending the 1800 plus (many have deductibles) on preventive maintenance vs the extended warranty? Then you can argumently enhance the vehicles longevity. Now your adding value rather than spending money on something that the odds are greater it will never be used.
 

rugbysecondrow

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First of all I'll bet half the folks that buy a 60K Bronco have no business doing so. THIS VEHICLE IS A TOY not a necessity. To spend an extra 1-3K (that will be most likely financed) is money most of them can't afford. These contracts also carry deductibles and exemptions. Fear sells.

It's a paradox. If you really have the money to afford the vehicle you probably can afford to self-insure and you will be ahead in the long run. If you don't you should be looking a cheaper alternative rather than adding to the problem.

"Google" car warranties see what the experts say. It's your money.

BTW I have never ever bought extended warranty for anything, much less one for a car, and do you know I have never ever NEEDED one.

That's my "piece of mind"...
Funny enough, I have never needed life insurance nor home owners ins. 😉

Need is a strong word though.

Here are fair assumptions I used:
-cost of labor is rising
-cost of parts is rising
-this newly launched model has a greater likelihood for needed repairs.
-there is a high likelihood of a repair, or multiple repairs, that will exceed $2,500
-depreciation hasn't occurred for this new vehicle, and value will likely hold well (relative to other vehicles) in the out years.
-If I am wrong, and doubt I am catastrophically wrong...there will be some repairs even if not the full value of the warranty
-if I am right, then I think it will blow past the $2,500 value of the warranty.
-i understand the "invest the money" argument, but that assumes high return, low inflation, few repairs...these were not my assumptions.

ymmv
 

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I don’t usually get the extended warranty but it saved my ass on a VW TDI that was smoking turbos. I plan to keep the Bronco awhile so $2k will give me piece of mind if I need it, and if I don’t need it, even better.
 

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Reading this thread has my boggled my mind.

Firstly, I want to know what you're investing in that $2,000 can turn into enough to cover a real warranty issue in 5 years. I'll buy that stock.

Secondly, the cost of repairs has gone up so much in the last ten years I'd feel like a fool if I didn't have some sort of warranty coverage on a vehicle I planned to keep more than three years or drive more than 36,000 miles.

Especially on a first year model like the Ford Bronco or the Bronco Sports.
 

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Extended warranty? No Thank You!

Want peace of mind? Put the cost of the extended warranty ~$2k into your investment of choice and don't touch it. If you have a problem 5 years down the road, use the investment to fix it. If you don't have a problem, you have a little extra cash you didn't flush down the toilet.
As others have said, this isn't reality. Sure a couple grand may cover something, but with the electronics, turbos, weaker transmission, etc, a repair can easily go over 2K.

In order to invest that money and make any sort of decent return to cover major repair, you'd be looking at some investment that returns 200%+

Now they may be out there. Hell I made 80% in 2 years with Amazon... But thinking only 2k has the ability to grow to the point to cover any major repairs is not realistic.

Best case, even today's over inflated market, you might get around a $400 return per year. I doubt that's going to cover much on our shitty built Broncos.
 

BennyBronco69

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First of all I'll bet half the folks that buy a 60K Bronco have no business doing so. THIS VEHICLE IS A TOY not a necessity. To spend an extra 1-3K (that will be most likely financed) is money most of them can't afford. These contracts also carry deductibles and exemptions. Fear sells.

It's a paradox. If you really have the money to afford the vehicle you probably can afford to self-insure and you will be ahead in the long run. If you don't you should be looking a cheaper alternative rather than adding to the problem.

"Google" car warranties see what the experts say. It's your money.

BTW I have never ever bought extended warranty for anything, much less one for a car, and do you know I have never ever NEEDED one.

That's my "piece of mind"...
I'm glad you've had good luck.

The only time I added an extended warranty it was on my M4. It paid for itself after one 2,600 repair and then saved me 3k on another.

I get your point. Often it may not pay for itself. But IMO, on cars now a days where a lot of things that can go wrong are not cheap to fix, it's worth the gamble.

If I'm dropping 60k on a toy I'd rather throw away another 2k over 6 yrs than get nailed with 5 to 6k in repairs.

Over a span of 6 yrs that 2k is nothing for someone that can afford a 60k vehicle.

In your counter of people buying a 60k vehicle they can't afford I'd still say it's worth it. If they can't afford a 60k toy but still get one... I bet they'd rather toss $30 a month out the window then get a 5k repair bill post warranty.
 

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As others have said, this isn't reality. Sure a couple grand may cover something, but with the electronics, turbos, weaker transmission, etc, a repair can easily go over 2K.

In order to invest that money and make any sort of decent return to cover major repair, you'd be looking at some investment that returns 200%+

Now they may be out there. Hell I made 80% in 2 years with Amazon... But thinking only 2k has the ability to grow to the point to cover any major repairs is not realistic.

Best case, even today's over inflated market, you might get around a $400 return per year. I doubt that's going to cover much on our shitty built Broncos.
You are missing the main issue that one must consider regarding buying an extended warranty....

What is the PROBABILITY that you will experience a major defect after the standard warranty expires? .05 (5%), .01 (1%)? Let's say there's a 2.5% chance you'll have a $10,000 repair bill covered by a $2000 warranty with a $500 deductible.

Case A - no warranty
.975*0 + .025*10,000 = $250

Case B - warranty
$2000 + .025*500 = $2012.50

In this case, you are 8 times better off with no warranty. (2012.5/250=8.05)

Rational people should use probability weighted scenarios when making these types of decisions. Believe me, the folks that are selling warranties are very good at estimating potential future repair costs and the probability they will occur. Their pricing reflects this plus a substantial profit for them. Product defects will generally make themselves known during the factory warranty period (3yrs, 36,000 mi ?). Once the vehicle has made it his far, the probability that a defect hasn't shown itself is low. Personally, I'd never buy an extended warranty, but that's me.
 
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Mr. Nice

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You are missing the main issue that one must consider regarding buying an extended warranty....

What is the PROBABILITY that you will experience a major defect after the standard warranty expires? .05 (5%), .01 (1%)? Let's say there's a 2.5% chance you'll have a $10,000 repair bill covered by a $2000 warranty with a $500 deductible.

Case A - no warranty
.975*0 + .025*10,000 = $250

Case B - warranty
$2000 + .025*500 = $2012.50

In this case, you are 8 times better off with no warranty. (2012.5/250=8.05)

Rational people should use probability weighted scenarios when making these types of decisions. Believe me, the folks that are selling warranties are very good at estimating potential future repair costs and the probability they will occur. There pricing reflects this plus a substantial profit for them. Product defects will generally make themselves know during the factory warranty period (3yrs, 36,000 mi ?). Once the vehicle has made it his far, the probability that a defect hasn't shown itself is low. Personally, I'd never buy an extended warranty, but that's me.
I agree. It's obvious that these companies take in way more than they dish out. But, I think some peoples minds are running on fear not rationale. They over insure themselves in almost every area. Agents, advisors, salesmen and attorneys are treated as their assets, not liabilities.
Everyone has the right to make bad decisions, but the folks that make the fewest typically end up with a lot more money.
Luck has a smaller part of this equation. The other part is simply being savvy.
 
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dgorsett

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First of all I'll bet half the folks that buy a 60K Bronco have no business doing so. THIS VEHICLE IS A TOY not a necessity. To spend an extra 1-3K (that will be most likely financed) is money most of them can't afford. These contracts also carry deductibles and exemptions. Fear sells.

It's a paradox. If you really have the money to afford the vehicle you probably can afford to self-insure and you will be ahead in the long run. If you don't you should be looking a cheaper alternative rather than adding to the problem.

"Google" car warranties see what the experts say. It's your money.

BTW I have never ever bought extended warranty for anything, much less one for a car, and do you know I have never ever NEEDED one.

That's my "piece of mind"...
I agree 100 %...However, the tech on this thing scares the crap out of me, so I may shop for a Ford sponsored warranty in the future.
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