3rd party extended warranty...?

[Mark S.]

Think long and hard about those odds before you ever buy any third party extended warranty.

Most people are really bad at that kind of probability math. I'm old enough to remember the arguments made against wearing seatbelts. The most common was a person had heard about someone getting thrown clear of a vehicle during an accident, which was deemed preferrable to being "trapped" inside a burning wreck. It was rare for anyone to take the time to find out how many people thrown clear of a car survived the experience, or how many cars actually burst into flames following an accident. Anyone who watches movie and television knows, of course, that you have exactly three seconds to get out of a car after a collision, because that's how long it takes for them to explode.

For an interesting thought experiment, look into the Monty Hall paradox. It's a true mind bender for anyone not familiar with the science of probability.

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[Granger Ford]

Thanks!

Were you able to get help regarding your friend and warranty questions/concerns?

 

[coopny]

For people talking about first party vs third party extended warranties, talking about sheer probability or payout rates is absolutely useless.

Ford charges over $1100 for a single front headlight on a Bronco Sport. I can guarantee you that Ford is making a hefty profit on that. Beyond that, Ford's labor rates are far lower than mine. Some labor operations that are expensive if you're paying out of pocket like paying for a Copilot 360 windshield camera retraining are as close to "free money" as it gets for Ford.

I get the point that Ford would not sell extended warranties if they did not make money on them. Where I take issue is where first party warranties are considered equal. The first party warranty has the benefit of requiring the dealer network to accept the warranty universally while benefitting from the lower labor rates and at-cost part rates that are not passed on to you if you have a third party warranty or pay out of pocket.

The other aspect of a manufacturer warranty is that the claims process is streamlined - the dealer has to accept it and submits their costs directly to the automaker. Go third party, they mail paperwork, you're lucky if it gets through without your intervention... claims headaches contribute greatly to breakage (people have eligible claims and don't claim them). Ford Protect is flagged on your VIN on Ford's dealer systems, so if your vehicle is covered, it's submitted instantly as eligible.

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