We have an ’06 Ford Focus with 45,000 miles on it. Extremely low miles, especially given this was our only car for several years. My parents bought the car new and paid for it for awhile when I was in college and had no means to pay (thank you, Mom & Dad!). Shane and I bought it from them in 2007, and we were able to transfer the extended warranty they had purchased. At the time, the warranty was a little less than $600 and was a 6-year, 60k mile comprehensive warranty.
In the time we’ve owned the car, we’ve had four instances where we’ve filed a warranty claim. The first happened while it was under the original 3-year, 36m factory warranty: shocks. The second was an alternator. The third was a do-hickey computer component for the transmission, and the fourth was for a power train computer component and also the mechanics of the transmission.
This time has been a little nuts since it took awhile to get the part (weird, long story) and we almost picked it up on Friday, but when the mechanic took it for a test drive he noticed it was skipping gears. He’s rebuilding part of the transmission right now.
This would have been an expensive repair bill and we no doubt would have had to tap our emergency fund to cover it.
In addition, we are using a rental car (an ’11 Focus…way different!) and the warranty is covering this use. Our regular auto insurance also covers the insurance for this rental, so I didn’t have to pay Enterprise thankfully.
Our warranty is expiring in May because the car will be six years old. Shirley’s birthday is Cinco de Mayo and we’ll have to have a fiesta for her.
It has been a good lil car to us so far, and I guess it’s starting to show its age a little. Shane uses it for work and it gets decent mileage. We also figure a paid-for car is cheaper to maintain and keep than getting another car. We’ll probably add 8,000 miles or less per year, since it’s just used for his commute and I also drive it when I’m by myself running errands instead of our van. So, if we can get it to 200,000 miles, that’ll be like 19 years from now. In theory, I should be able to teach Johnny how to drive my first car.
Because we intend to keep it for so long, we thought we’d look into extending the extended warranty to see if that would be worth paying for, as opposed to just using our emergency fund. After all, we can’t know if the car will need another expensive repair any time soon. What if the van needs something instead? Or the house? Or anything else?
If we do get a warranty, I’d want the same warranty offered by Ford that we have now, not a third-party warranty. Even so, I’ve found the prices vary by a lot for the same thing. It pays to shop around.
My quote from Ford directly:
36 months, 36k miles: $1,738
36m, 24k miles: $1,535
48m, 36k miles: $1,920
From the Ford dealership where my car is being repaired:
36m, 36k miles: $2,338 – $400 discount for paying in full: $1,938
48m, 50k miles: $2,072 with paid in full discount
ai yai yai. That’s expensive, especially since our car is worth maybe $7,500.
I found another nationwide company that sells this same warranty for a lot less. I asked how they can do that, and he said because they do a big volume of sales in all 50 states. Their quotes:
36m, 24k miles: $1,070
36m, 36k miles: $1,175
48m, 36k miles: $1,260
48m, 48k miles: $1,390
60m, 60k miles: $1,765
Their longest-term, highest mileage plan is comparable price-wise to a 3-year, lower mile term from Ford. Wow. This last company’s prices are a lot easier to even consider.
We’ll mull this one over. We’ve got until April or so to make up our minds on extending it further. I’m thinking it would be a good thing to do, given that we want to keep the car for a long time and given its history. It could pay for itself in one repair, after all. I’ll also keep shopping around to see what else I can find. Maybe I can get the local dealership to match or beat the best price I can find.
I think we could save up for it between now and then and not have to take any emergency fund money for it. The money might otherwise go to general savings.
What would you do? Extend the warranty or self-insure and hope for the best?