Ford Warranty Deductibles

My husband and I are considering buying a 2008 Ford Taurus X. The car as 33K miles on it with a 36K/3 yr. warranty plan. We are going to purchase an extended warranty plan for the car - 3 yr/85K. But, with this warranty, there is a $100 deductible. Our other car is a volvo and their warranty is nothing like this. Is this the norm? Should we have to pay a $100 deductible everytime we bring our car in?

It appears many extended warranties are written that way. As well, there are many exclusions. As a result, most of us do not recommend these plans since you will not likey collect your cost over the term of the plan.

Any good car will have no major problems before 121,000 miles (36+85K), so you will not likey collect on the big items. I don’t know what is in your Volvo warranty, but Volvos can develop expensive problems randomly (not mileage related), so that extended warranty might be more justified.

The warranties also do not cover wear items like brake jobs, cooling system service, timing belt replacements, etc.

Going back to 1965, I am hard-pressed to come up with an out-of warranty failure (not a wearout repair) that would have been covered by such a plan. The only ones I can think of were: rear end bearings for a Caprice, $450, Transmission repair on a Ford Comet $185, leaky engine seal on a Nissan $550. We are covering 9 vehicles here over a 44 year period.

An extended warranty is really an insurance policy and an overpriced insurance policy at that. An insurance claim has a cost to process. Collision insurance has a deductible so that for a minor ding, the insurance company doesn’t have to process a claim and you either live with the ding or you stand the cost of the repair. I would guess that the same holds for an extended warranty–for a minor problem less that $100, you stand the cost and the warranty company doesn’t have to stand the cost of the repair or the processing of the claim.

I bought the Ford ESP extended warranty for a 91 Taurus in 1993 for ~$680 because the car had a noisy PS pump at the time. I had the pump and both outer tie rods replaced under warranty so I think I broke even. My dad got an Ford ESP warranty for his 2004 Taurus that has paid for itself several times over. Just last week the AC compressor was replaced for a $50 deductible. My Dad is clueless about cars so the extended warranty works for him.

On the other hand, the GM dealer wanted $2500 for a 5/60 warranty on my 2.5 year old certified 2000 Blazer. It had numerous repairs but the extended warranty would not have paid for itself. Quite a few repairs were in the 60-75k range and would have been out of warranty anyway. My Dad’s Taurus is the exception to the rule, most extended warranties will not pay for themselves.

Ford did offer a 7/75 warranty on their Certified vehicles the last time I was in the market, but I would check that first. Also check if the new car powertrain warranty is longer than 3/36. I’ve been satisfied with the Ford ESP plan, but I would avoid any third party warranties offered by the dealer.

Ed B.

Extended warranties are normally a waste of money except in a few rare cases so consider the purchase of an ext. warranty nothing more than Vegas gambling.

The 100 dollar deductible is normal on a Ford extended warranty plan and many other plans also do the same thing. It’s not proprietary to Ford.

 Well any car can have major expensive repairs.  

The profit to the salesman and company is usually over 50%. So for every $1,000 you spend the insurance company has less than $500 to pay for repairs or they will loose money, something insurance companies do not do. Some people will get nothing back and some will get a lot more than they pay.  Most will get far less. In addition you need to keep in mind that the insurer has worded it to eliminate as many expensive things as they can.

Remember that the seller is out to make money and they get to write the rules and set the price.  They are not going to sell them at a loss so one way or another they are going to have you pay more than they will pay out.  

Would you gamble with a car dealer who gets to set all the rules and knows all the odds?   

Your decision has to do with the value of the piece of mind it gives you. If that is worth the cost then buy it. Don't expect it to cover everything however, most are written to keep cost down and exempt what they know will cost them money. 

Good Luck