djoneill

I was just told this weekend that they way the dealership/manufacturer calculated price was to figure out what the warranty would cost them and multiply it by 10.

JRC702

There is a lot of profit built into the price of an extended warranty.

Is it a Ford ESP warranty? (probably is)
You can shop ESP pricing on line. You should price check it and make sure you didn't pay too much. If you did, cancel it and give them the chance to give you a better deal.

IMO the only benefit to buying the warranty in the finance office is that they can roll it into your car loan. Ford ESP is a good warranty, but you have until your regular warranty is ready to run out to decide.

If you wait, beware: there are a lot of crappy warranties out there.
Ford ESP or EasyCare are the way to go.

wcgman

We bought one once and it came in handy on an explorer and it came in handy. It was nice to drop it off, get a rental, and it was fixed when I came back no problem. Its some peace of mind and I guess other than modding, I'm done fixing cars unless there's a huge savings. Drop it off and let someone else do it. I guess it depends on your plans for the car and how much of an inconvenience it is to do the work yourself or find a mechanic and deal with their BS.

NaplesFL11GT

The dealer suckered me into buying it as well. Is it worth it to me? Heck no. In fact I am going back to the dealer here within the next week and I am going to cancel it. They will prorate it for me or take some months off my loan. The 3/36 and 5/60 mile warranty should be enough for these cars.

donutsdemise

Thanks for the feedback. Going back to dealer to cancel the ESP this weekend.

In an effort to get me to take it, the financial guy offered a 2.79%/75 month financing, down from 2.99%/72 months. Not being a math/financing whiz, I dunno how much if any that benefits me.

He also said if cancelled, it comes off the 'back end' of the loan.

dmhines

I cancelled the ESP on my 2010 when I discovered I could get a better plan for half of what they charged me at the dealer. Ford credited the refund to my principal balance on the loan ... it did not change my monthly payment amount.

JIM5.0

That's right, when they say "it comes off the back end of the loan" it does not reduce your payments at all. But it does take off several payments off the tail end of your loan term.

For example, you have a 5year (60mo) loan term which is of course 60 payments. You initially purchased ESP but cancelled it. Let's say your payments are $500 per mo, and the ESP you purchased is $2000 (just examples, not reflective or real prices).
You cancel the $2000 ESP and what happens is knock off the last 4 payments of your 60 payment term. You wind up with a 54 payment term instead.

As far as pricing goes, the dealership Financial Guy ESP plans are in my opinion WAY too expensive. If they were much cheaper, I might actually purchase one.

SoCalGT08

I have a friend who sells extended warrantys....its all about making
More Money for the dealership.......

JIM5.0

True that. And after thinking about it more, it really looks like a way to try to get back money lost for normal warranty work.
For example: Ford only pays 80% of the actual repair cost for a warranty job. So if a repair normally costs $1000, and it is done under warranty, the dealership has to eat $200 because Ford will only reimburse the dealer $800.
The ESP looks like to me a way to recover that cost difference.

Edit: The ESP sold to new customers might be intended to recover warranty job cost differences. That is what I meant to say

donutsdemise

What if you refinance the loan? Is the cancelled ESP money on the back end going to be moved up to the 'front end' or how does it affect refinancing?

I know the dealers need to make money what with the Costco or Truecar pricing stuff they have to honor with a customer but to not have told me that there were 'stages' of ESP, and pushed the most expensive ESP plan on me from the get-go is annoying.