Extended warranties — to buy or not to buy? That is the question.
Although our Airstream has no motor, our tow vehicle has an enormous diesel monster of a heart beating in its chest. We’ve repeatedly been told two truths about diesels: (1) they are wonderfully durable and rarely encounter mechanical problems; (2) if something does happen to go wrong, they are horribly expensive to repair.
We received a notice in the mail from Ford with a helpful, albeit somewhat frightening, reminder: “WARNING! YOUR WARRANTY EXPIRES AT 36,000 MILES!”
Yes, the mileage on SEEMORE’s odometer read an ominous 35,500. We were facing that inevitable decision of whether to buy Ford’s $2000 Extended Service Plan, which would grant us an additional four years of “bumper to bumper” coverage up to 100,000 miles.
“Get the warranty,” a friend advised. “It will pay for itself.”
But other friends had drawn the exact opposite conclusion.
“Those extended warranty plans are always in the favor of the factory,” one friend countered. “I’ve never bought one in my life.”
At first glance, I was convinced we should purchase the warranty. How much is one’s peace of mind worth? (To Ford, it’s worth $2000.) But then I started reading the fine print. It turns out that our truck is actually covered by THREE warranties, only ONE of which expires at the 36,000 mile mark.
While the “bumper to bumper” coverage expires at 36,000 miles, the powertrain (transmission, etc.) is covered for 60,000 miles. And the diesel engine? It’s covered by warranty for a reassuring 100,000 miles.
To confuse matters further, there are different “extended service plans” available for purchase from Ford. The cheaper plans allow for a higher per visit deductible. The more expensive plans have a lower deductible, with the lowest being $50. It’s a veritable smorgasbord of warranty choices. But in the end, you may decide that the best choice is no warranty whatsoever.
After all, with an extended warranty, you’re not only betting that something will go wrong, but that whatever goes wrong will cost more than the warranty cost. If the warranty was $200 it would be a no brainer. But’s it’s $2000, and that will buy an awful lot of parts and service from independent mechanics.
Yes, when considering a diesel engine and accompanying powertrain, it’s not hard to imagine repair bills that extend into the thousands of dollars. But for the “bumper to bumper” items like air-conditioning and the radio? Usually those can be handled independently on a cost effective basis. There’s no shortage of Ford truck mechanics across this great land, and those guys specialize in finding cost efficient solutions to typical problems. So far (knock on wood!) our truck has been a model of reliability.
So what did we decide? As our odometer clicked past 36,000 miles, we waved a fond farewell to our “bumper to bumper” warranty. While we were sorry to see it go, we were also comforted by the continuing presence of the powertrain and engine warranties.
When SEEMORE reaches 60,000 and 100,000 miles we will probably have these discussions about extended warranties again — perhaps with a different result.
Did we make the right decision? Only time will tell.
What about you? Do you buy extended service plans? If so, why? If not, why not?
Hmmm, I don’t know what we would do as we haven’t quite purchased our Ford yet 😉 The talk about town I’ve always heard is that extended warranties are not worth it, however, I’ve never had an explanation for why they are not 🙂
Please write an update when you decide. I’m interested in all things “Ford” these days as a diesel Super Duty will soon be finding it’s way to us!
It was a tough call for us, and we changed our minds at least a dozen times.
For starters, we received this postcard from Ford stating, “At 36,000 miles, your warranty expires!” So we shopped our “ESP – Extended Service Plan” options. We were concerned about driving with no warranty coverage, mainly because people have warned us about the expense of diesel repairs.
But when we read the fine print of our truck paperwork, we learned we actually have THREE warranties on the truck: the 36,000 mile “bumper to bumper” coverage; the 60,000 mile powertrain coverage; and the 100,000 mile diesel engine coverage. So we’re really just losing the “bumper to bumper” portion that covers items like A/C.
Our decision? For $2000… we passed on the “bumper to bumper” ESP. Our powertrain and engine are covered, so we’ll just pay for the small stuff (A/C etc.) out of pocket.
Was this wise? Only time will tell!
Sean —
Everything that I have ever read on extended warranty plans says that they aren’t worth the added cost in the long run. If you take that approach EVERY time, overall, the money you save will pay for any repairs you have to pay for out of pocket.
That said, what I personally do is look at the maturity of the technology in the product itself. When I bought a hybrid car, I took the additional service plan. There was simply too much stuff in there that was “new” technology.
With a conventional car or truck (or home appliance), I would decline the added coverage.
Just my 2 cents….
Thanks Wayne, I appreciate the input, and agree with you about conventional / proven technology vis-a-vis the new stuff.
Our truck is an ’07, which was the last year this engine & body style was built after what I think was a 6-year production run. So I figure that Ford had several years to work out the bugs! Sure enough, the new ’08 models had all sorts of new problems to go along with the new technology and design.
And by the way, I never, ever, EVER buy the extended warranty on electronic items like TVs. They are usually warrantied for 1-year anyway, and if something’s gonna go REALLY wrong with electronics it usually happens in the first few months. And that stuff depreciates so fast, paying for a pricey warranty just doesn’t make sense to me.
I think you made the right decision Sean. The only thing that would have made me sign that extended plan would have been if the transmission wasn’t already covered. The F250 and that engine are a well proven and extremely reliable combination. As for the transmission, anything can happen particularly when towing but, as you have mentioned, you are already covered for that.
I’m sure you can find something else to spend the $2000 on … 🙂 …. (New camera perhaps!!)
lol – yes, there’s always a more entertaining way to spend $2000. I’ve already told Kristy that I’m looking forward to visiting B&H Photo Video (huge professional video store) when we are in Manhattan. Video equipment is my indulgence! Hey, it’s cheaper than a lot of other addictions.
With regard to the transmission… The one compelling selling point of Ford’s “bumper to bumper” extended warranty was that it promised to increase coverage of the transmission from 60,000 to 100,000 miles. As things stand today, our tranny coverage expires at 60k, and I’m not sure that there’s any way for us to extend it. But as Scarlet O’Hara said, I’ll worry about that tomorrow… Tomorrow is another day. 😉
Unfortunately for me, I have many addictions (all legal BTW) and Michele says I am not allowed anymore. I have to make do with a Panasonic SDR-S26 and some “used” Pinnacle software I bought from a friend who didn’t like it. Have fun at B&H!!
I’ve heard good things about your Panasonic camera. I’ve got a small fortune invested in various cameras and filmmaking gadgets, but really I think the most valuable component is always the camera operator. In other words, it’s nice to have the fancy stuff, but you really don’t “need” it to do the job. It has been said that ALL cameras are “professional cameras” in the hands of a professional. These days, even the most basic SD video cameras and editing software are powerful filmmaking tools.
Hi Sean,
Thank you for your awesome blog. I love it!
Do you think it is advisable to get an extended warranty on a new trailer? Similar to what Sams Club offer?
Thanks zuyzuy!
With regard to the extended warranty, we decided against it. If you have a NEW trailer, it should be under a manufacturer’s warranty anyway.
Basically, with an extended warranty, you are betting that repairing whatever goes wrong will cost more than the warranty costs. You’re also buying some peace of mind.
I try to keep our vehicles well maintained, so as to minimize the need for an extended warranty. With our truck I decided to simply pay for repairs out of pocket when the need arises. Ultimately it’s a personal decision, but I’m comfortable with what we chose.
Take the $2000.00 put in a savings account and it is available for repairs and you collect the interest… Even if it is less than 1% 🙂
Yep, that’s basically what we did — we decided not to extend the “bumper-to-bumper” warranty. Our truck SEEMORE now has 46,000 miles. So far, so good!