Ford Extended Service
Senior User
Joined: Apr 2005
Posts: 231
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From: Arkansas
Here are my thoughts on the matter,
When a dealership sells you an extended warranty at close to cost it may be true that in the near term they are not making much money on the transaction. But think about who pays the dealer for warranty work after the standard 3 year 36,000 factory warranty. Ford pays the dealership and that's money in their pocket. So, in the long term it pays for the dealership to sell extended warranty's even if they don't make a nice profit on the price. They need to think long term when it comes to extended warranty's.
Now, what if I buy a Ford warranty over the internet from one dealer but take my truck to my local dealership for extended warranty work? Well, my local dealership makes the $$$ not the dealership that sold me the warranty. So in this case it's within EVERY Ford dealerships interest to sell as many Ford extended warranty's as possible. It helps ALL the dealerships collectively.
I guess what I am trying to say is the profit from the initial sale of the extended warranty insn't all of the profit that's left for a dealership. In the long term they'll make money from Ford on extended warranty work.
When a dealership sells you an extended warranty at close to cost it may be true that in the near term they are not making much money on the transaction. But think about who pays the dealer for warranty work after the standard 3 year 36,000 factory warranty. Ford pays the dealership and that's money in their pocket. So, in the long term it pays for the dealership to sell extended warranty's even if they don't make a nice profit on the price. They need to think long term when it comes to extended warranty's.
Now, what if I buy a Ford warranty over the internet from one dealer but take my truck to my local dealership for extended warranty work? Well, my local dealership makes the $$$ not the dealership that sold me the warranty. So in this case it's within EVERY Ford dealerships interest to sell as many Ford extended warranty's as possible. It helps ALL the dealerships collectively.
I guess what I am trying to say is the profit from the initial sale of the extended warranty insn't all of the profit that's left for a dealership. In the long term they'll make money from Ford on extended warranty work.
Lead Driver
Joined: Apr 2002
Posts: 7,746
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From: Tampa Bay, FL USA
Originally Posted by Forrest_F150
...But think about who pays the dealer for warranty work after the standard 3 year 36,000 factory warranty. Ford pays the dealership and that's money in their pocket. So, in the long term it pays for the dealership to sell extended warranty's even if they don't make a nice profit on the price. They need to think long term when it comes to extended warranty's...In the long term they'll make money from Ford on extended warranty work...
New User
Joined: Aug 2005
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Mark is partially correct about warranty work. The manufacturer, whether it is Ford, GM or others, does not pay the same labor hours as a private customer would. Warranty work is about 20% less than "book" time which is charged to a customer. With that said, a tech is still making plenty of money on warranty work. Even at warranty time he is in almost all circumstances getting the job done in LESS time than he is paid. In all my years in the automotive industry I have rarely seen a good tech take more time to do a repair than what he was paid. A good service manager will always get more time for his techs on tough jobs. An example is on an alternator replacement; book time may be 1.6 hours while warranty pays 1.2 and the tech actually spends less than 45 minutes on the car. He still gets paid by Ford as if it took him 1.2 hours.
When techs work 38 to 45 hours a week but get paid for 75 to 90 hours of work, which is very common, I don't think they are being treated unfairly.
When techs work 38 to 45 hours a week but get paid for 75 to 90 hours of work, which is very common, I don't think they are being treated unfairly.
