Car extended warranty?

[cos]

Ford is offering me an extended warranty to pick up when my initial warranty ends, 5 years after purchase - which is next month. With a $100 deductible, it comes out to about $1300 over the three years of the plan; with a $250 deductible, it comes out to $972.

In the 5 years we've had this car so far, we've only had one repair that would be covered by warranty, $600. So it seems to me the odds are low that it'll need as much warranty-covered work in the next three years, as either plan costs. There is a chance it'll need something more expensive, but... that seems like a pretty low chance, doesn't it?

Also, they cover towing, and rental car in case the car is out of service for a short time. But we have AAA+ which covers towing, and my regular car insurance has rental car coverage.

Seems to me that it's not worth getting the extended warranty. Opinions?

Comments

[forgotten_aria]

My opinion is it is someone's job to figure out how much they have to charge you to make a profit, so unless you can't afford it if something happens, extended warranties are never a good plan.

[jered]

That is their intent, but there are two wrinkles:

1) It's a little like insurance -- they don't have to make money on every customer, just across the population of customers. Sometimes your house does burn down, and the insurance company pays you. Sometimes a major part fails, and the warranty fixes it.

2) Sometimes there are design flaws that cause major failures across many vehicles at a later point in time. This is one area where I've found that the manufacturer's extended warranty is the best choice because they have the most familiarity with the vehicle.

For cos, I'd suggest investigating the general reputation for reliability and common failures for his particular vehicle, and also the general cost of repairs. There are some vehicles (expensive, flaky) that I would never want to own without a manufacturer's extended warranty. With our Audi, we always got the manufacturer's extended warranty; with a Ford, this may not as sensible.

[macthud]

I was quite happy that I had my bumper-to-bumper Vue warranty extended until I paid off the financing (5 years), as it replaced a few things (and kept me driving a similar SUV loaner for three weeks, while they awaited delivery of parts) that went south right near the end of it.

I was sad that I hadn't extended it further, when the transmission bought it another 5 years later (which cost me about $1k more than the extra extended warranty which would have covered it was priced when I inquired). Cover for a rental/loaner while it was in the shop would have added another $500-1000 to my out-of-pocket (or zero, under warranty).

Three years for $972 (net $1222) seems to me a reasonable price (I wouldn't go for the net $1400), but it depends a lot on the mileage allowance and your current patterns. (If you burn through the miles in a year, ending the coverage, it's probably not worth it. On the other hand, if you'll be within the limit after the 3 years, I'd get it.)