Ford Truck Enthusiasts Forums - extended warranty question

caman24,

I just went through this in July so heres some info that will help you out.

1st a little history. As of July 1st 2004 any company that sells extended warranties in the state of California has to be licensed by the State Insurance Commissioner including the sales reps that sell the policies. When this took effect about 99% of the companies selling policies in California Packed up and left.

This all stemmed from the fall back from a company called Warranty Gold that had millions in $ in policies in California. From my understanding about two years ago they filed BK. Two things occured. 1. the cars that were in shops in California were the owner could not pony up the repair money, had mechanic liens filed on them and the repair shops sold them to recover there costs. 2) 1000's of people who had paid money for Warranty Gold were out there policy money, because the majority of policies have to be paid up front. (This happened across the country, California was one of the hardest hit)

The State stepped up to the plate and inacted emergency legislation to protect consumers.

Here is the State's guide on buying extended warranties.

http://www.insurance.ca.gov/CSD/Broc...ceContract.htm

Dealers who sell extended warranties do not have to be licensed by the state, because they are controlled by the Department of Automotive Repair.

Ok, now on to 3rd party warranties vs. Fords warranty.

The first thing I did check into my local Ford dealers. I have a diesal. It turns out that very few dealers here in California actually have Ford trained diesal mechanics, because not a lot of diesals are sold out here. I have about three dealers within my comfort zone.

I then contacted the service manager and accounts recievable departments at the dealerships and started asking them questions on what extended warranty companies they felt comfortable working with.

I was surprised to find out that a lot of dealers will not work with 3rd party extended warranty companies because its a hassle to get paid.

I then contacted the extended warranty companies that I had found that were licensed in the state and asked them to tell me what dealers they had worked with in my area and how often. I then verified that with the dealers to confirm that the company had actually worked with them.

A couple of notes about extended warranties. Read the contract, every single word of it, and then re-read it two more times.

When your done doing that re-read the California Insurance paper on extended warranties and then compare the states info against the extended warranty. Thats when the awaking takes place.

There are so many loop holes in policies to protect them from paying. For example wear and tear. A lot of policies exclude that. Or lets say your doing some off roading and you modified your truck by putting a lift kit on it and you blow your tranny. Good chance its not covered because you modified the drive train.

Also remember that with 3rd party warranties, you have to have authorization before you bring it to a dealer. That could be as quick as an hour or a couple of days. Once its at the dealer if its a major tear down, the repair cannot be done until the warranty company has a field rep go out to the dealer to review the torn down parts. Its up to the field persons descretion what gets repaired and what does not. This is were the dealership gets ****ed off, because they have invested 10 hours pulling an engine apart because of a thrown rod bearing only to have the insurance adjuster deny the claim because he thought the oil was a little burnt, which according to him ment you did not do a regular oil change. (and yes that actually happened to a dealer I spoke with. Turned into a huge ****ing match with everyone involved and ended up taking up the dealers service bay for about three weeks while everyone argued the finer points)

Dealers that sell extended warranties other then Fords. Again read the fine print. Also heres an interesting thing I learned about megga dealers. For example Tuttle-Click corporation. I ended up finding out that this orginization is a mega billion dollar national car dealership company. They ended up creating there own extended warranty company because of the mega money involved, and in the Tuttle Click ford dealerships they are instructed to push this warranty as opposed to Fords. The whole theory works because most people will bring there vehicles back to the dealership they bought them for warranty repair. The problem arises when they take it to a Ford dealership that is not part of the Tuttle Click orginization.

Also remember that only about 30% of the policy cost goes back to the underwriter the rest stays in the pocket of the company that sold the policy, so theres a lot of wiggle room for negotiations.

The same thing applies to Ford Direct policies. Dealerships have a lot of wiggle room on pricing and you don't have to buy the policy from the dealership you bought the vehicle from, and you can let them know that up front. You can feasible call up every dealership in the United States and have them bid on your warranty program.

The one thing nice about Fords Warranty is its honored at every Ford Dealership with no questions asked. If you do have a problem with the dealership Ford will step up to the plate.

Hope this info helps.