Ford ESP cost vs risk

[haedgy]

yeah sorry guess I didn't explain the package I got very well the first time around.

 

I just hope the Edge lives up to my expectations. i truly felt that this was a better vehicle than others in it's class.

Even the Acura MDX was not as nice (to me anyway).

[2008explorer]

I like the peace of mind that I get with an Ford Extended Warranty. I figure that these vehicles today are very high tech and very costly to repair. I bought a 6 year warranty ( which is actually only 3) after the original warranty expires. I purchased my warranty online from an Authorized Ford Dealer that sells factory ESP warranties a lot cheaper than most local dealers. I got the Premium Care with O deductible and I also got the lighting option which includes repair/replacement of LED & HID lamp assemblies and all bulbs. I just got 60,000 mile coverage which is fine for me, I average about 8,500 miles a year ( I'm retired ). My total cost was $870.00. If your interested, go online for a free quote from Lombard Ford. I found them to be the cheapest around, I bought a 6 year for my wife's 2010 Escape 6+ years ago from them.

[akirby]

I figure that these vehicles today are very high tech and very costly to repair.

 

Not trying to argue here but I think it's important that you understand the situation.

 

Who knows the average repair cost on an Edge better than Ford?

 

If Ford was losing money on these ESPs they would either raise the prices or stop selling them.

 

If Ford is not losing money then that means on average the cost of repairs is less than the cost of ther warranty. Maybe not on an individual vehicle or two or more, but certainly over several vehicles.

 

I understand rolling it into the cost of the vehicle and making small monthly payments rather than paying out of pocket for a big repair. But if you're strictly looking at cost and you can afford to pay for a repair out of pocket sometimes you can save a lot of money over the long run.

[2008explorer]

Not trying to argue here but I think it's important that you understand the situation.

 

Who knows the average repair cost on an Edge better than Ford?

 

If Ford was losing money on these ESPs they would either raise the prices or stop selling them.

 

If Ford is not losing money then that means on average the cost of repairs is less than the cost of ther warranty. Maybe not on an individual vehicle or two or more, but certainly over several vehicles.

 

I understand rolling it into the cost of the vehicle and making small monthly payments rather than paying out of pocket for a big repair. But if you're strictly looking at cost and you can afford to pay for a repair out of pocket sometimes you can save a lot of money over the long run.

I fully agree that Ford does not sell these warranties to lose money, this is no different than any other type of insurance we buy. All of the companies that sell insurance do so only to make money for them. That being said I enjoy the fact that for the next 3 years after my original factory warrant expires, that I am fully covered for just about anything (except normal wear items) including all lighting ( which the original warranty does not cover). This will only cost me $290.00 a year for the last 3 years. This to me is well worth it on a vehicle that cost me $37,000.00 (using Ford X plan).

[haedgy]

Hey 2008explorer. I hear you on the insurance aspect of it. My hope is i don't have to use it but I sleep better at night knowing I have it.

I looked at it the same way you did. Knowing it's there and the deductible is zero makes it that much better. Though I paid a little more than you did I do have the maintenance and repairs included.

 

Ford is taking the risk you purchased the car that went through production and was put together so well it won't breakdown. Just want to make sure I am covered in case I get that car that has a part that happens to fail a year outside of warranty and not get hit with a big repair bill. With all the tech in the Edge what seems like a small repair can cost a lot of money. What costs $500 today could cost $900 next year, you just never know.

 

Just look at how much it costs to repair or replace the water pump, a relatively cheap part in the duratech 35 engine. The water pump is built into the engine, and basically run via the timing chain, to replace it because of a leak is around $1500 to $2500. They do not typically fail but if you end up being one of the lucky ones, you're hosed (no pun intended). One guy said it the best water pumps eventually fail just hope it doesn't when you own the car.

 

Honestly for the 2015 and 2016 Edges can Ford even predict how much maintenance or repairs will cost? It's like anything else these type of insurance plans do, keep a record of past costs and repair issues then plug it into a formula. I am actually hoping I don't even need it because if I don't that means I had a nice reliable car, and Ford just happened to get a bonus for selling me such a great vehicle.

 

I will more than likely keep my Edge the full 7 years or until the warranty runs out, and if I happen to get another car, my daughter will probably get the car along with the warranty, so she won't have to worry about those costs.

 

I think if I leased or kept cars for only a 2 or 3 years then I would opt not to get the ESP, as the factory warranty would still be good for the time I own the car. It's all about where you are in life as to what decisions you make. If something makes sense to you at that time then by all means go with your gut.

[WingNut]

Agree. Like I said before...for me it was worth the peace of mind. I never worried about my last vehicle the entire time I was making payments on it.

[akirby]

Depends on what gives you peace of mind. For me it's knowing that I've saved $7500 on my last 5 vehicles by not buying the ESP. I would willingly pay for a $3K repair and not think twice because I'm still $4500 ahead. For me it's the total cost and I don't mind having to pay for a large repair bill every once in a while - although that hasn't happened in the last 20 years. And I've kept all of those vehicles at least 2-3 years beyond the factory warranty. Maybe I've been lucky but even a couple of large repairs would still be less than I've saved.

 

I think it makes a lot of sense to finance the ESP in with the vehicle and pay a little extra per month if you're not capable of paying a large repair bill.

[WWWPerfA_ZN0W]

It is also more likely that one will get a large repair done when having warranty coverage, rather than stretch it out and trade it in prior to having to do the repair. Definitely all time horizon dependent, what you want to do with the vehicle past the B2B warranty.

[haedgy]

So you wouldn't think twice about a $3000 mechanics bill? Can I be your mechanic?....lol joking.

 

Honestly, I have purchased a plan for only 1 of my last 6 vehicles back then it cost even less. The car I did purchase it for I ended up using and then some. So that paid for itself. The big sell for me from Ford was the cost of maintenance AND repairs all of which add up over 7 years even for a decent car. If the avg cost to repair and maintain a vehicle (minus gas and tires) equates to even $260 a year I am break even. If the national average holds true and it's $400 then I am way ahead. Granted I am looking at the cost of 1 car not 5.

 

To me buying a new car is not an investment, keeping it running and properly maintained is.

 

We can look at dollar costs and numbers and statistics all day, this vs that, etc. Sometimes it's not a matter of money alone but of preference and convenience as well. It just depends on what angle you want to approach it.

 

Was getting the plan a good idea? For me...yes, I will have other things to spend money on down the road. Spending a little of the money that I have now for piece of mind and knowing I won't bare the brunt of a cost for a huge repair (hopefully not) will help me plan future purchases and savings in the long run.

 

Plus, I just love the fact that i can drive into a dealer tell them xyz is wrong hand them the key. Come back sign my name and drive off.... as my deductible is zero.

 

I agree it's a gamble, Ford is gambling I won't need anything major done to the car in 7 years and I am gambling that I will need it. If something does go wrong I will be glad I purchased it. If it doesn't I am still glad because that means I have had a reliable car and Ford got a little bonus for doing so. To be honest the cost was not so great that I can't feed the kids.....

Edited October 27, 2016 by haedgy

[doji_nj]

Is the ESP worth it? Depends on individual circumstances, and the propensity to stomach risk in the short term.

 

Almost like investing in the stock market in the short term, vs cash under the mattress. In the long term, stocks come out ahead and cash is actually more risky. Same with ESPs - always having an ESP for each car over 10-15 years, you will likely lose in the long run.

[akirby]

It's akin to waking into a Casino with $1500 - at the end of the day you might go home with nothing, break even or win a few thousand. You might get lucky on one or two vehicles but in the long run, just like a casino, the house always wins because they set the odds (or in this case the price).

 

It makes sense if you're on a fixed income and can't afford to pay out of pocket for a repair to finance the ESP with the vehicle - that way you're guaranteed only a small monthly payment.

 

However, if you're purchasing it outright for $1200-$2400 then you should also be able to pay for an out of pocket repair, even a large one. And the chances of needing a high cost repair (>$3K) is lessened by the 5 yr/60K mile powertrain warranty. Then it's simply a gamble - are you willing to lose $1500 for the chance to save a few thousand?

 

I never buy ESPs - I self-insure. On our last 5 vehicles which were kept 5-7 years each I saved at least $7500 by not buying the ESP and I only have a few hundred out of pocket in repairs total. If I had to replace an engine tomorrow I'm still thousands ahead in total cost. But you have to be willing to look at the total cost and not worry about a $2K-$3K repair bill.

 

For me the thought of paying $1500 and potentially getting nothing in return kills me so I self-insure. If you want to gamble at least know the odds.