Winning and Losing at the Extended Warranty Game

[Wotan]

From my experience those German cars are money pits, best to avoid,

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[Ernest T]

From my experience those German cars are money pits, best to avoid,

Yeah, I learned my lesson on that one. It was a sweet driving car when everything was right. Some failures were just odd. Mrs. T ran over a piece of metal and dinged the aluminum oil pan. Lucky it was a small leak because she continued to drive the 30 miles to the house. I found one used for $300 1990 dollars and paid to have it shipped. It was easy to replace, but while I had it up on jack stands, the AC evaporator gave up the ghost and I had to replace it and have the AC serviced. The oil pan wasn't the car's fault, but I never could figure out why the evaporator failed.

My one Japanese car happened to be one of the less reliable Japanese brands, but that 2000 Mitsubishi Eclipse with the 2.4 liter 4-cylinder engine was like a smooth go cart. That one also had some weird failures. The right headlight wiring harness shorted to the point it melted the light housing!

 

[Ernest T]

I'd say your post answers your question. You've owned a LOT of vehicles and you only would have benefitted from an extended warranty on the BMW.

Go with your head. Be self-insured.

Actually, my advice would be the same regardless of your experience. There are others who would have benefitted from an extended warranty on several vehicles. Anecdotal experiences are irrelevant. The facts are:

* Like all insurance, extended warranties are gambling, betting against the house.

* It doesn't matter if newer cars are more complex; less reliable; parts & labor are expensive, etc., etc. The underwriter has all of that data. They know the average repair cost per vehicle and charge some multiple of that.

* It's not as if we have some knowledge that they are not aware of -- with rare exceptions like a BS owner who regularly tows at full GCWR, in the mountains and/or off-road, in the summer. Right at the edge of allowable use.

* There are always "winners" and " losers." The winners are much more likely to tell anyone who will listen about how smart they were to get an extended warranty. 'Lucky' is more accurate. Meanwhile, we rarely hear from the losers, so the impression is that extended warranties almost always pay off -- when in fact, the opposite is true.

* Being self-insured makes the most sense, which is why many corporations and organizations are self-insured. Needless to say, most of us have no choice but to pay for homeowner's, health, and auto insurance.

* That said, there are a couple good reasons to buy an extended warranty:
1) Piece of mind -- regardless of ability to pay, knowing potential repair expenses are limited to the cost of the warranty, plus any deductibles, plus the forgone interest on the money spent.
2) Financial -- if money is tight and the only way to cover a large repair bill is with a warranty.

The bottom line is that most people who buy extended warranties will lose money.

I suspect you are right. I'm way ahead by mostly not paying for the extended warranty on new vehicles.

 

[DesertRat19]

Consumer reports predicts the 2025 Bronco Sport to be more reliable than the past models and this makes sense. There were lots of issues sourcing parts and raw materials during the 2021-2023. Things seem to have gotten better but of course, that may change again as supply chains are yet again experiencing a shock.

I'm going to purchase one. I've just had my compressor fail. I've had 3 seat belt buckles fail. I plan to keep the vehicle close to 100k miles, putting on 15k per year easy right now. I suspect I'll have a few more big ticket items fail over time.

 

[DesertRat19]

here's the 21-24 ratings....

 

[sajohnson]

here's the 21-24 ratings....

Thanks for posting that. I remember that when we first started looking at the BS BL, I checked CR and they listed the reliability for 2021 as being "Good" (4/5).

Above, I see that they now have "Overall Reliability" listed as "Poor." I imagine they upgrade the ratings as time goes on.

CR does not differentiate between trims. The BS BL has done pretty well, it's the other models that have had most of the recalls.

Speaking of which, obviously no failures is best, but if a problem is the subject of a recall and can be permanently corrected, that's much better than random intermittent failures that can leave a person stranded with no warning.

Anyway, it's good to see that the overall trend in reliability has been positive. The 2024 ratings are alll equal to or better than the 2021 ratings.

 

[Ernest T]

reliability is trending in the right direction!

We keep vehicles a long time. Besides the Corvette and BMW, the shortest ownership period has been 7 years and that was a single rear wheel diesel pickup that wouldn’t pull the new 5th wheel we bought. We’d have kept it longer if we hadn’t needed a dually. The dually was the next shortest ownership period. We traded it for the F150 when we bought a motorhome. No reason to have a huge truck with nothing to tow.

 

[DesertRat19]

Thanks for posting that. I remember that when we first started looking at the BS BL, I checked CR and they listed the reliability for 2021 as being "Good" (4/5).

Above, I see that they now have "Overall Reliability" listed as "Poor." I imagine they upgrade the ratings as time goes on.

CR does not differentiate between trims. The BS BL has done pretty well, it's the other models that have had most of the recalls.

Speaking of which, obviously no failures is best, but if a problem is the subject of a recall and can be permanently corrected, that's much better than random intermittent failures that can leave a person stranded with no warning.

Anyway, it's good to see that the overall trend in reliability has been positive. The 2024 ratings are alll equal to or better than the 2021 ratings.

Great point about the different trim levels. There's enough differences that I wouldn't be surprised by different reliability. The key thing is that reliability is a relative term and that you could very likely purchase a vehicle that over performs these ratings.

 

[Lefty Lorenzo]

I have a checkered history with extended warranties. At first, I never purchased them, then I got burned by a 1988 BMW 325i which spent many days at the BMW dealer. I probably spent $5000 for repairs over the 5 years I owned that car.

Next I bought a 1992 Oldsmobile 88 Royale and bought an extended warranty through Geico for $500. I never used it before it expired.

My next new car was a 1997 F150 and I passed on the warranty and didn’t have a major repair until well after a warranty would have expired.

Next up was a 2000 Mitsubishi Eclipse and I purchased a warranty for that one because it had a spotty reliability rating. I came out slightly ahead with about $1000 in repairs vs the $900 cost of the warranty.

I passed on the warranty on my next five new vehicles and would have lost money on an extended warranty on all five. We bought a 2003 Dodge Ram, 2010 Ram Dually, 2014 Jeep Trailhawk, 2015 Corvette and a 2017 F150. By this time the cost of a warranty had skyrocketed, it was over $3000 if I had purchased it for the Corvette.

The two Ram trucks were diesels and never had a repair outside the factory warranty. We traded or sold them well past 100,000 miles.

We still have the Cherokee and F150. I’ve spent less than $400 on repairs over the 11 years we’ve owned the Cherokee. It currently has 102,000 miles on it. We spent $1500 for a new intake manifold for the 150, but that was past 100,000 miles so probably after an extended warranty would have expired.

The Corvette had no repairs outside the factory warranty while we owned it, but it moved on with lower than normal mileage on it.

My head tells me to forgo the extended warranty and stick the cost of the warranty into an account just for the Bronco, but tales of $12K transmission replacements give me pause.

I’d be interested in knowing what percentage of Bronco owners purchase extended warranties and how many lost money on the purchase, but that data likely isn’t available.

I have a checkered history with extended warranties. At first, I never purchased them, then I got burned by a 1988 BMW 325i which spent many days at the BMW dealer. I probably spent $5000 for repairs over the 5 years I owned that car.

Next I bought a 1992 Oldsmobile 88 Royale and bought an extended warranty through Geico for $500. I never used it before it expired.

My next new car was a 1997 F150 and I passed on the warranty and didn’t have a major repair until well after a warranty would have expired.

Next up was a 2000 Mitsubishi Eclipse and I purchased a warranty for that one because it had a spotty reliability rating. I came out slightly ahead with about $1000 in repairs vs the $900 cost of the warranty.

I passed on the warranty on my next five new vehicles and would have lost money on an extended warranty on all five. We bought a 2003 Dodge Ram, 2010 Ram Dually, 2014 Jeep Trailhawk, 2015 Corvette and a 2017 F150. By this time the cost of a warranty had skyrocketed, it was over $3000 if I had purchased it for the Corvette.

The two Ram trucks were diesels and never had a repair outside the factory warranty. We traded or sold them well past 100,000 miles.

We still have the Cherokee and F150. I’ve spent less than $400 on repairs over the 11 years we’ve owned the Cherokee. It currently has 102,000 miles on it. We spent $1500 for a new intake manifold for the 150, but that was past 100,000 miles so probably after an extended warranty would have expired.

The Corvette had no repairs outside the factory warranty while we owned it, but it moved on with lower than normal mileage on it.

My head tells me to forgo the extended warranty and stick the cost of the warranty into an account just for the Bronco, but tales of $12K transmission replacements give me pause.

I’d be interested in knowing what percentage of Bronco owners purchase extended warranties and how many lost money on the purchase, but that data likely isn’t available.

I have found that this dealership offers the best price on Ford Extended Warranty. It is where I purchased mine. https://www.grangerfordextendedwarranty.com/ford/bronco-sport/#/step/1

 

[Lefty Lorenzo]

I have found that this dealership offers the best price on Ford Extended Warranty. It is where I purchased mine. https://www.grangerfordextendedwarranty.com/ford/bronco-sport/#/step/1

 

[Jim Bow]

I bought an extended warranty on a 2020 Ford Fusion Hybrid from Flood Ford. It appears they have the same prices as Granger. I just traded it in for a 2025 BS and submitted my request to get a refund on the unused portion of the warranty. You can either have a check sent to you or receive a credit toward a new vehicle plan. I only put 26000 miles on the Fusion as my daily driver in 5 years (bought new), and I'm sure I'll roll the refunded amount into a warranty for the BS.

 

[Escape2Bronco]

I bought an extended warranty on a 2020 Ford Fusion Hybrid from Flood Ford. It appears they have the same prices as Granger. I just traded it in for a 2025 BS and submitted my request to get a refund on the unused portion of the warranty. You can either have a check sent to you or receive a credit toward a new vehicle plan. I only put 26000 miles on the Fusion as my daily driver in 5 years (bought new), and I'm sure I'll roll the refunded amount into a warranty for the BS.

Flood is one of the know good ones as well. There’s one more but that escapes me right now. (Like most things do)

 

[DWG]

I like Zeigler but you have to use a discount code to get the best price. I am sure if you call them you can get the code. I had an Escape that Ford bought back after 6 months and Zeigler was great with processing my ESP refund within a couple of days of requesting the refund.

 

[Escape2Bronco]

I like Zeigler but you have to use a discount code to get the best price. I am sure if you call them you can get the code. I had an Escape that Ford bought back after 6 months and Zeigler was great with processing my ESP refund within a couple of days of requesting the refund.

Yup, that’s the other one!

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