Ford Protect Extended Service Plans

[Rkbrumbelow]

After a lot of thinking, I believe I'll pass on the Extended Warranty. But I am considering the Maintenance Program. At 67 (will be when truck arrives) I don't climb under things too good anymore. And I know zero about electronics and how to fix them when they break. So I'm considering the maintenance plan for sure.

Maintenance programs are a whole other story and I tend to support them.

they allow for budgeting considerations that are effectively known before and can be used as part of vehicle depreciation calls if you use the Maverick for business (as we will be) because you can factor in the maintenance into the federal depreciation deduction.
The other bonus is that it helps incentivize warranty protection as Ford will be doing all of the early maintenance on schedule with trained techs, not guys who don’t know how many spark plugs you have (Thompson’s auto repair in Rome GA I am looking at you )

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[ace1642]

Extended warranties are a 'love it or hate it' topic. But it's generally accepted that a Ford plan is the way to go. And if you decide to do so, prices are negotiable, and don't have to be bought from the selling dealer. They can also be bought online, and Flood Ford is a good place to start when the time comes.

I bought one for my current vehicle and most of the time they (warranty people )make excuses not to cover thing even thought my extended package covers every except brakes and shocks. IMO set that money aside for later repairs. This time I’m not buying one.

 

[oljackfrost]

I bought one for my current vehicle and most of the time they (warranty people )make excuses not to cover thing even thought my extended package covers every except brakes and shocks. IMO set that money aside for later repairs. This time I’m not buying one.

Did you buy manufacturer warranty or second party?

 

[russross]

I wish there was better information about warranties available to help make a decision. The problem with most discussions about extended warranties is that the analysis is based on numbers averaged across many customers, but I only care about the risks that I face individually.

For example, let's say an extended warranty plan costs the dealer $900 and they sell it to me for $1100 (the approximate numbers from my last vehicle). The company sells tons of these and knows that on average each customer will get a payout of $600, so they win, the dealer wins, and the average customer loses. Simple, right? And all true, statistically speaking.

The problem is that I am not the average of thousands of customers. I am one dart thrown at the dartboard. I might be one of the many who need nothing, but I could be one of the unlucky ones who need half the electronics replaced. Hidden in that $600 average payout is that most customers will have $0 in repairs, some will need $500, and some will need $5000. Which one will I be?

This is why we buy health insurance. Every year I lose money on health insurance. Buy I buy it anyway because I know that an emergency could bankrupt my family if I don't have it, and so I buy insurance to turn that risk of a catastrophic cost into a yearly expense.

What I would like to see is an expected distribution of extended warranty payouts. What % will never use it (this you can find from Consumer Reports and others), what % will get $1000 in payout, what % will get $3000 in payout, etc. Because that's why I would consider an extended warranty. If almost all payouts are 0x to 2x the cost of the plan, then saving that money and self insuring is absolutely the right approach. There's not much risk. However, if the distribution is more like 90% get nothing from it but the other 10% have $9000 repairs, then an $1100 warranty might be worth it. Insurance is worthwhile when it trades a manageable fee for the elimination of a low-probability but high-impact risk.

So yeah, I wish there was better data available. What does that distribution look like for other Ford vehicles?

 

[Rkbrumbelow]

I wish there was better information about warranties available to help make a decision. The problem with most discussions about extended warranties is that the analysis is based on numbers averaged across many customers, but I only care about the risks that I face individually.

For example, let's say an extended warranty plan costs the dealer $900 and they sell it to me for $1100 (the approximate numbers from my last vehicle). The company sells tons of these and knows that on average each customer will get a payout of $600, so they win, the dealer wins, and the average customer loses. Simple, right? And all true, statistically speaking.

The problem is that I am not the average of thousands of customers. I am one dart thrown at the dartboard. I might be one of the many who need nothing, but I could be one of the unlucky ones who need half the electronics replaced. Hidden in that $600 average payout is that most customers will have $0 in repairs, some will need $500, and some will need $5000. Which one will I be?

This is why we buy health insurance. Every year I lose money on health insurance. Buy I buy it anyway because I know that an emergency could bankrupt my family if I don't have it, and so I buy insurance to turn that risk of a catastrophic cost into a yearly expense.

What I would like to see is an expected distribution of extended warranty payouts. What % will never use it (this you can find from Consumer Reports and others), what % will get $1000 in payout, what % will get $3000 in payout, etc. Because that's why I would consider an extended warranty. If almost all payouts are 0x to 2x the cost of the plan, then saving that money and self insuring is absolutely the right approach. There's not much risk. However, if the distribution is more like 90% get nothing from it but the other 10% have $9000 repairs, then an $1100 warranty might be worth it. Insurance is worthwhile when it trades a manageable fee for the elimination of a low-probability but high-impact risk.

So yeah, I wish there was better data available. What does that distribution look like for other Ford vehicles?

Now we get into mean, median and mode plus the difference between anecdote and actual statistics.

personally, I am a deontological Calvinist that does not believe in anything random (even though I have taught quantum labs in physics and chemistry so I grok uncertainty).

mist a personal choice, but as you have pointed out, if you are aware of your risk considerations you are a more informed consumer and better able to optimize for your circumstances. A first year vehicle with hard use is going to see more failures, but probably handled with recalls and unseen service (another reason for maintenance packages -still say don’t finance them) insurance companies are there to make money, and they do. (Well except in TX when oil prices collapsed etc but that an investment situation not a price vs outflow one)
All in all good post

 

[Down]

https://www.floodfordesp.com/

I think the rates are great... I'm looking at this truck as a long-term buy , but I only put on about 5-6,000 miles a year on a vehicle. So the length of the warranty means more to me These plans go up to 8 years in 8 years I might put on 50,000 so me its peace of mind for 8 years or until I'm 72 years old......... I should know if this will be reliable after that 8 years or I dump it for an all Elec truck ?
No I am going to spend the $800 for the peace of mind

Ford's ESP (which you linked to) and their Maintenance Plans are different things. The former is an extended warranty and the latter is basically prepayment for maintenance. With that said tho, I agree. It's the only car warranty I've ever considered or bought, so I agree. Decent value.

 

[Down]

I wish there was better information about warranties available to help make a decision. The problem with most discussions about extended warranties is that the analysis is based on numbers averaged across many customers, but I only care about the risks that I face individually.

For example, let's say an extended warranty plan costs the dealer $900 and they sell it to me for $1100 (the approximate numbers from my last vehicle). The company sells tons of these and knows that on average each customer will get a payout of $600, so they win, the dealer wins, and the average customer loses. Simple, right? And all true, statistically speaking.

The problem is that I am not the average of thousands of customers. I am one dart thrown at the dartboard. I might be one of the many who need nothing, but I could be one of the unlucky ones who need half the electronics replaced. Hidden in that $600 average payout is that most customers will have $0 in repairs, some will need $500, and some will need $5000. Which one will I be?

This is why we buy health insurance. Every year I lose money on health insurance. Buy I buy it anyway because I know that an emergency could bankrupt my family if I don't have it, and so I buy insurance to turn that risk of a catastrophic cost into a yearly expense.

What I would like to see is an expected distribution of extended warranty payouts. What % will never use it (this you can find from Consumer Reports and others), what % will get $1000 in payout, what % will get $3000 in payout, etc. Because that's why I would consider an extended warranty. If almost all payouts are 0x to 2x the cost of the plan, then saving that money and self insuring is absolutely the right approach. There's not much risk. However, if the distribution is more like 90% get nothing from it but the other 10% have $9000 repairs, then an $1100 warranty might be worth it. Insurance is worthwhile when it trades a manageable fee for the elimination of a low-probability but high-impact risk.

So yeah, I wish there was better data available. What does that distribution look like for other Ford vehicles?

That's a valuable piece of context but I think it's far better to just review, area by area, your personal risk aversion. For me?
Powertrain: Very expensive to fix but good base warranty, so ESP not worth it.
Paint failures: Not covered anyway, ESP not worth it.
Suspension: Unlikely to fail, typically tolerable repair cost. ESP not worth it.
Electronics: VERY complicated, very expensive to fix/replace and (IME), VERY prone to failure in Fords. ESP probably worth it.

 

[ace1642]

Did you buy manufacturer warranty or second party?

I bought a second party from the dealer because it offered to cover more parts. However, after being in the service department many techs have told me almost all non manufacturer warranty will try to deny claims. If you buy factory warranty they are a little better but they always cost a lot more.
my warranty cost me $2,100 manufacturers warranty cost $3,400 and would not lower their price.

 

[CASD57]

I bought a second party from the dealer because it offered to cover more parts. However, after being in the service department many techs have told me almost all non manufacturer warranty will try to deny claims. If you buy factory warranty they are a little better but they always cost a lot more.
my warranty cost me $2,100 manufacturers warranty cost $3,400 and would not lower their price.

I thought the manufactures warranty was expensive as well...Until I saw the flood plans...
And if I can get a Maintenance Plan that makes sense I'll buy that... Like I'm not going 10,000 between oil changes and avg. full synthetic oil changes run about $45 here..so I'll do the math on that one too when I see the price to see if it's deal or not

 

[Red Ryder]

As far as I can tell, the best way to avoid all of this is to a.) pay cash for the extended warranty as a separate transaction and b.) get the gap insurance through your regular insurance company.

Or c.), Pay enough down as to not require gap insurance, and forgo the extended warranty. Assuming some of the risk and investing it properly will pay off in spades over a lifetime of vehicle purchases. Especially with the hybrid's MZR-based engine. I had one in a Ford that went 300K without issue. The cost of ownership (per mile driven) was the lowest of any vehicle I've owned, foreign or domestic.

 

[Rkbrumbelow]

Or c.), Pay enough down as to not require gap insurance, and forgo the extended warranty. Assuming some of the risk and investing it properly will pay off in spades over a lifetime of vehicle purchases. Especially with the hybrid's MZR-based engine. I had one in a Ford that went 300K without issue. The cost of ownership (per mile driven) was the lowest of any vehicle I've owned, foreign or domestic.

Self insurance is the way to go via investing, only thing I would add is this: figure out what you can pay, pay less than that, and keep making payments into an investment when you pay off your vehicle so you keep making bigger and bigger down payments till you can buy outright.

many people forget you only need full coverage insurance till you have no loan, then you can shift that money into investing/self insurance as well. Over a lifetime it definitely will pay off

 

[Red Ryder]

Self insurance is the way to go via investing, only thing I would add is this: figure out what you can pay, pay less than that, and keep making payments into an investment when you pay off your vehicle so you keep making bigger and bigger down payments till you can buy outright.

many people forget you only need full coverage insurance till you have no loan, then you can shift that money into investing/self insurance as well. Over a lifetime it definitely will pay off

I wasn't going to self-disclose this much, but your post inspired me. It sounds like we're on the same page.

Many years back, I sold a motorcycle (approximately $4500) and segregated that money into a "vehicle/hobby fund" to pay for repairs, and serve as a down-payment for the next vehicle. I would occasionally add a little to it (any tax return, bonus, or other unallocated income). It grew, and between that and being somewhat restrained on which vehicle I bought, I can now buy outright and have for some time. That method has paid off in spades.

The savings between paying interest vs. earning interest + removing the burden of Gap/Extended warranty costs adds up very quickly!

 

[SgtLip]

many people forget you only need full coverage insurance till you have no loan, then you can shift that money into investing/self insurance as well. Over a lifetime it definitely will pay off

Agree to a certain extent. What do you do then if and when you have an accident? The total repair costs are on your shoulders at that point. With all the plastic it gets damaged beyond repair most of the time which means replacement body parts. If you are self insuring or socking money away for comprehensive or collision damage it could put you in a financial bind.

Asking for a friend.

 

[Rkbrumbelow]

Agree to a certain extent. What do you do then if and when you have an accident? The total repair costs are on your shoulders at that point. With all the plastic it gets damaged beyond repair most of the time which means replacement body parts. If you are self insuring or socking money away for comprehensive or collision damage it could put you in a financial bind.

Asking for a friend.

That is why you have been saving money for self insurance. You use those funds to repair your vehicle. You are going to pay for it either way. 3 options cash from dutiful savings, higher premiums financed at a higher rate by paying insurance, or a small personal loan which is still probably less than what you would be paying in increased insurance.

it’s a long term plan, it may not be an option for those without the discipline to stick with it. My, sorry for the abruptness of the response but since you asked, is that if you cannot afford a loss, maybe a less valuable vehicle is in order that you can afford the loss on until you get net positive again.
Think of it this way, even at 0 return saving 500 a month takes how long to recover 20k? 40 months, aka 3.5 years. What does a car payment plus comp insurance cost you disregarding depreciation?
See how it works out?

sorry if I sound rude, it is not my intention to do so, merely direct.

 

[SgtLip]

That is why you have been saving money for self insurance. You use those funds to repair your vehicle. You are going to pay for it either way. 3 options cash from dutiful savings, higher premiums financed at a higher rate by paying insurance, or a small personal loan which is still probably less than what you would be paying in increased insurance.

it’s a long term plan, it may not be an option for those without the discipline to stick with it. My, sorry for the abruptness of the response but since you asked, is that if you cannot afford a loss, maybe a less valuable vehicle is in order that you can afford the loss on until you get net positive again.
Think of it this way, even at 0 return saving 500 a month takes how long to recover 20k? 40 months, aka 3.5 years. What does a car payment plus comp insurance cost you disregarding depreciation?
See how it works out?

sorry if I sound rude, it is not my intention to do so, merely direct.

No, I'm good.

I have the funds, that's not the real question. It's the accident that bothers me. There is minimal metal and chrome on vehicles today that can be straightened. It's ALL plastics and electronics. When involved in an accident there is typically a lot of damage.

Case in point, we had a Lexus and our grandson was learning to drive. He turned left into the driveway at his house after returning from his final driving lesson. It was a typical 2 lane residential street. He made the turn and instead of hitting the brake he hit the gas. Drove the Lexus into the ass end of a pick-up. No damage to the trucks rear bumper. The insurance company totaled the Lexus. The amount they gave us was peanuts on the dollar to replace the vehicle. So in this case the insurance did me no good as for repairs but they did give is a third of the price of a car. Had there not been any collision insurance, we wouldn't have received a dime. Not really sure what it would take to repair the car if it was even repairable. Without the insurance it would have been a hard pill or should I say bill to swallow.

Not sure if my savings would have covered a repair or paid for a new car. That was why the question. I have the discipline, that was never the question. It's the accident that bothers me. They don't occur on purpose or are they ever planned, thus they are accidents. I pay $41.50 per month for both Comprehensive and Collision w/$1,000 deductible. Had I not had the insurance and socked the $41.50 away, it would take awhile to accumulate enough to replace or repair a totaled vehicle. That is all I'm saying.

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