Great idea except for a couple of flaws:

1. The markup from the vendor to the dealer is very high.
2. The markup the dealer requires is still there.
3. The best price is still too high.

I say live a little and gamble a little. Put that money in the bank and let it grow. You will have more than if you buy insurance with it most of the time--Bet on taking good care of your truck and it will take good care of you.

 

That's exactly how I feel about extra insurance. Over the long run you'll be money ahead if you take care of your vehicle hope nothing major goes wrong. On my 2012 the insurance may have been a break even since I had to replace my IWE actuators.

 

Skinner, I forget, do you agree with me that there shouldn't be any factory warranty or do you think they should include it out to 10 years on powertrain? As you know Ford makes money on including the factory warranty too. Factory warranties are really nothing more than forced extended warranties, and few people seem to think they are a bad idea.

 

It will be a while before he's back, Frantz.

 

Oh well... He was amusing.

 

Having made it 56 years without buying an extended warranty on anything I've purchased...and thankfully never needing one, I've got to be on the plus side....hopefully to stay.

 

I can't remember the last time there was someone on FTE that had so little respect for other people's opinion as Mr. Skinner. If he has a family, I can only imagine what life is like for them...

 

Frantz,
Do you know anything about extended warranties from Warrantech? Local dealer tried to sell me one with my truck last week. All my googling turns up a lot of negative reviews, very few if any good reviews.

 

I am really sorry if I offended anyone. I do tend to look down on people who buy warranties. I know they are very expensive and I consider them a gouge. Then, people will compare them to health insurance or car insurance to make a pointless attempt at justification. Without going into that, I see many attempts to justify many things using flawed logic. I think frants asked something above as to whether I agreed with him on an either or question. It didn't make any sense to me. What I do say is that the factory warranty is plenty sufficient for me.

 

Here it is. "do you agree that there shouldn't be any factory warranty..." No. I never said that. Then he continues "or do you think they should include it out to 10 years."

This is known as the Either or false argument. Then he goes on to claim "As you know Ford makes money on including the factory warranty too." Really! How does Ford make money on the warranty?

He goes on with a claim that factory warranties are forced extended warranties; apparently not realizing that warranties cost the companies money to honor and are part of the purchase price. They typical reason that companies offer longer warranties is to compensate for their reliability problems.

It is really hard for me to respect nonsense, but I am sorry for expressing it inappropriately.

 

I don't know them. Not that they are bad, I just don't know them. We use a pretty big company called Resource Automotive.

Skinner, It is a sliding scale. I've never heard anyone say "The factory warranty is perfect as it is", so I did make an assumption that you either wanted less warranty, or more warranty. If that's false, then lucky you, the factory nailed your needs!

They are forced warranties because I have to get it when I buy a new car. Ford, Chevy, and every company has figures to determine how much they will likely spend on warranties. If you think that isn't included in the price of the car, you're being pretty naive. If you think the companies don't error on the side of caution with those numbers which in term generates profit, once again.... Typically when a company extends a warranty beyond the industry norm it's for marketing, either to have a perceived edge over the competition, or to cover up for past sins. Every car that Ford makes has a profit margin. Manufacturing, marketing, warranty repairs, transportation, etc. Ford makes money selling each car. I really don't care if you consider a warranty a set part of the purchase price (as I do), or if you say it's part of marketing only, it still has an avg cost per unit, and we the consumers pay more than that cost when we buy the car.

I'm sure the reason they are forced is because people wouldn't be willing to fork over $40k for a pickup that might have a computer go bad a mile down the road. In this way the warranty would be calculated as part of marketing. A vehicle people don't have to worry about expenses on is value adding. Because many people don't want to pay more for more coverage, but are perfectly content to accept the factory warranty that may or may not fit their lifestyle very well, they simply balance the marketing value with the actual cost. They find a positive position and that's how we ended up with 3/36 and 5/60 as an industry norm. So some of the cost of the factory warranty is absorbed by the marketing value, I'd argue that the MSRP would have to be significantly less in order to justify an higher risk purchase. Ford has simply found a way to justify us paying more for a vehicle because they are assuming risks after the purchase. Hence, more profit, higher purchase price, and my point.

At the end Skinner, it's not that you disagree that gets annoying, it's that you sound like Eric Cartman making fun of Sean Hanity in the dances with smurfs episode of South park. You attack my specific statements (which is fine and healthy), but you do so without substance. Tossing a few phrases you learned in philosophy class doesn't win an argument. Even if I'm wrong about some of it, I'm genuine in my intend, as I'm sure you are. I try to fully explain my understanding to both prove my point but to allow for group refinement of an idea that does affect us all. I do buy cars too, quite a few actually. I don't have the figures of how much profit Ford makes when factoring its warranty compared to when you buy an aftermarket. I do know that the company we deal with offers the same coverage for less than when I price out a Ford backed warranty. There is obviously a profit motive with warranties, but that doesn't mean it's a gouge... you know, unless you're being forced to get one and you don't want it like the built in factory warranty.

 

The factory warranty is treated as an expense, not a source of income. As far as the business is concerned warranty dollars reduces operating profits. On the flip side of that coin the product pricing does include an assumed warranty expense per vehicle. The amount is slim but it does exist. So, yes, you are paying for factory warranty but it is a much better deal than extended warranty.

 

Do you have figures to back that up? Do you have figures that shows the profit Ford makes selling the extended? (not dealer, as that is dealer set).

I'm not disputing the statement at all, but in order to have a value based discussion, we have to know the values. Regardless of the amount of profit, your statement would confirm it IS an expense, and therefore, something I'm being forced to buy, be it a "great deal" or not.

 

The largest profit center of the dealership I worked at was finance. We made more money slinging loans & selling insurance than selling the vehicle. When people came into finance we said they were in yes mode so our mission was to sell them the extras. The dealership probably couldn't support itself off the profits from new car sales alone.

 

Correct. It is not a "forced" warranty in any way. It is included in the price and Ford has a very accurate accounting for what it will cost, which is managed.