Now that we know our truck has shipped, have changed to an auto insurance with comprehensive insurance that will cover contaminated fuel and have been pre-approved for our loan, we are looking into extended warranties. Normally we would not get an extended warranty as all our cars, except the Honda, didn't need enough repairs to break even on the extended warranty. However, with the redesign and new technology on the Ford Super Duty we are planning on getting an extended warranty for ours.

So far we have looked at the Ford ESP, Geico MBI, Progressive Mechanical Repair Plan (MRP) and Good Sam ESP. These are my concerns with each:

Ford ESP - 8 yr/150k. We are planning on replacing everything in the stereo system except the head unit (Sync 3) and antenna. With Ford ESP's history, we are concerned that if the head unit goes bad, they will blame the mods we made and refuse to cover the head unit.

Geico MBI - 7 yr/100k . Relatively inexpensive. Must stay with Geico for 7 yrs. You loose it if they cancel you. Many good reviews.

Progressive MRP - 7 yr/100k. More expensive than Ford ESP.

Good Sam ESP - 7 yr/150k renewable until 18 yrs or 150k. $1,200 cheaper than Ford but 1 yr less. Can only find reviews related RVs (motorhomes and trailers) and they are overall good.

I would appreciate feedback on these options and other options I have not explored.

 

When I was looking at other warranties, not all covered everything on the truck the Ford esp did, One item that was regularly left off is the PCM. Most will require pre approval befroe any work is done and may not pay for diagnosis. The others may have the same issue with your radio mod as well since they are not oem equipment.

 

I bought the Ford ESP from Flood Ford. I would not buy an aftermarket as I suspect you would have way less trouble getting your dealer to honor the Ford one. I bought the 8yr/125k premium care with $100 deductible and paid $2960

 

Fuel contamination would be my biggest concern, if that's covered by insurance then statistically the extended warranty is a loss for you. Just think if you pay 3k for a warranty that covers you to 125k then the actuaries know that they have a greater than 50 % chance of not paying out.

 

Depends how lucky you are. It wouldn't take but one or two injectors or a HPFP and you are even. With all of the electronics on these new trucks- and probably all Chinese junk I can about bet that the chance is better than 50% that some of it breaks. Think of the guys with the destroyed valves or bad radiator. Do you want to pay out of your pocket?

 

I've had good experiences with the Ford ESP warranties not only for Fords but non Ford vehicles also.

 

Repairs are expensive and bad things can happen. People just need to realize these things are sold for profit, so if it sells for 3k chances are you wont need 3k in repairs.

 

Ford ESP specifically excludes contaminated fuel. Geico MBI requires you to also have comprehensive and contaminated fuel is covered under their comprehensive plan. I did not check if contaminated fuel was excluded from the other plans I looked at because I had already switched to Geico.

In most cases I agree that an extended warranty is a loss for the buyer. Two of four of our vehicles have had extended warranties (back in the 90s when they could be bought for hundreds of dollars rather than thousands). With one of the warranties we lost money on and the other we "made" enough money to make up for what we lost on the first one. With the vehicles that didn't have extended warranties, one had a two repairs that would have been covered by the extended warranty, but were not enough to break even on an extended warranty and the other had no repairs that would have been covered by the extended warranty. However, all our other vehicles had proven technology and the Ford SD has significant new technology that has not been proven over years.

 

I purchased the 8 year, 125k Ford ESP and plan to possibly sell the truck at 100k miles and transfer the remaining warranty to the buyer. I think 1 to 2 years and 25k miles of warranty will be worth at least half the cost of the warranty when I sell it.

So if you could buy a 8 year 125k mile warranty for $1,500 would you do it? You bet, that's my math.

In the mean time if anything does go wrong after the standard warranty expires I'm covered to 100k miles.

 

My issue with the extended warranties is that in reality, they don't go into effect until your basic new vehicle warranty has expired. Therefore, the money you spend today is not doing any work for you but is certainly earning interest for the seller.

For sake of argument, we'll use 3yr/36,000 miles for a factory warrant. (I know the power train has longer period, but that only further supports my math below).

If I buy a new F250, 350, 450 diesel today, Flood Ford will charge $2610 for a Premium Care 125K mile/8year plan with a $100 deductible.

Now, I can wait 35 months (1 month before factory warranty expires) and purchase this same plan for $2710...a $100 difference. I researched a 2014 model with 36,000 miles to get this number for comparative purposes. I admit, I am making an assumption that in three years the price difference will stay the same.

If I wait to purchase the extended warranty and take the $2610 and invest at 7% ROI, compounded quarterly, I will earn $604.xx interest in three years.

Using this interest to help purchase the extended plan just prior to the factory warranty expiring saves me $604.xx and I am still covered from day one with no gaps.

As an added bonus, I get three years of factory warranty time to assess the maintenance history/reliabiliy of the new (2017) model trucks across the board and can make a better informed decision as to risk/reward of purchasing an extended warranty.

If I'm missing any variable here, please let me know.

 

Very well put. I never understood why people spend money to "bet" on their choice of vehicle will break down or have a catastrophic failure. All insurance policies are a gamble, your betting you will have a dark cloud and their betting you won't.

Another point is accumulated mileage. 8 Years and 125,000? That's 300 miles a week, less than 43 miles a day. Depending on how many vehicles you have I would expect one would drive out of the warranty long before the 8 years. My 2009 is 7 MY old and has just under 200,000 on it and I split my total driving between 6 vehicles.

Lastly after the factory warranty is up, there is no reason to take your vehicle to the dealer for repairs. A reputable local repair shop will always be cheaper. And by the time you are out of the warranty, any shop who wants to will have 100% access to any information needed to make quality repairs.

 

We will put 36,000 miles on our truck in 24 - 26 months. So we would be looking at buying the insurance at 23 - 25 months out.

Knowing that I will need the money in 23 - 25 months, I would not invest it in anything risky enough to make 7% compounded quarterly. I would be looking at putting it in my credit union money market account which earns 0.2% compounded monthly or a 18 month CD which earns 0.35% compounded monthly. In today's environment I would probably go with the money market because I expect the fed to start increasing interest rates, so I don't want to lock into 0.35%.

By waiting you are taking the chance Ford will change the game rules for their ESP, such as requirement vehicles be under a specific age or mileage to buy the ESP and your vehicle will be over the age and mileage they when the change the rules.

Yes, the power train warranty is longer than the bumper-to-bumper warranty, but I have never had a vehicle with a power train repair. With the exception of of a charcoal canister replaced under the PZEV warranty (15 yr/150k), all our major repairs after the bumper-to-bumper warranty expired were things like AC, radiator, throttle body, power locks, starter, fuel injector, etc.

 

I'm sure we'd all be interested to here where you can get a guaranteed 7% risk free return, I'm calling BS on this.

 

Good point on the accumulated mileage. We are looking at the 8 yr/150k mile $200 deductible warranty. Our challenge with calculating mileage is we don't know how much my husband will drive the truck after he retires in 1-2 yrs, we do not know how much camping we will do with the truck either now, after my husband retires and after I retire in 5 1/2 yrs.

 

You are correct...there is no guarantee when investing and I never used that word, you did. Since you called BS, here is the synopsis in which you should reply to with an apology:

I always use 7% as a ROI planning tool. Long term investing. I'm 47, started investing when I was 22. Over the last 25 years, I've earned an average of 11%. I'm fully retired now. Own a home on 10 acres, have put two boys through college with no debt and next year will begin traveling 6-months out of the year in our new 5ver. Hence the need for the new Super Duty.

No, I didn't have family money when I started, I was dirt poor. I enlisted in the USAF at age 19 and have worked my way up in life. When my 25 year old friends were getting into debt up to their eyeballs because they had to have a new Mustang or Camaro or BMW, I was putting around in a 10 yr old Honda, investing and not throwing away money.

Call BS if you want...but it's smart placement of your money and there is no simple, "single sentence strategy". Been a mix of real estate, stocks, bonds, precious metals, foreign opportunities and IMO the best move I ever made was using a wealth management advisor. They work for a flat fee and have no ties to the individual investments they recommend. The more your portfolio grows, the more they earn.

For all other...I apologize up front for the derailment, but because my life is centered around integrity and honesty, I will take anyone to the mat that calls and unfounded "BS" on what I say.