warranty
09-21-2010, 04:18 PM
#12
One last time....I'm not paying more for the warrantee than what it's worth by financing it over time within a vehicle loan. I might be financing 1K more on the truck, but I make sure the amount I pay/finance is the going price for the truck at the time of purchase/financing. My credit is good; I usually get 3 to 5 percent on used vehicles at my bank or credit union; The advantage of age and mantaining good credit for years.
I never buy new, as there is too much depreciation on a new vehicle the first three years.
In simple terms, If I pay 10K for the vehicle, put down 1K as a down payment, the truck better be worth 9K at the time of purchase. If I added in the 1K for the warantee, I'd be paying more for that warantee over the length of the loan. In most cases, almost twice it's value with all the interest.
I also don't buy warrantees anymore!
I won't hijack this thread anymore.
I never buy new, as there is too much depreciation on a new vehicle the first three years.
In simple terms, If I pay 10K for the vehicle, put down 1K as a down payment, the truck better be worth 9K at the time of purchase. If I added in the 1K for the warantee, I'd be paying more for that warantee over the length of the loan. In most cases, almost twice it's value with all the interest.
I also don't buy warrantees anymore!
I won't hijack this thread anymore.
Using down payment money to pay for warranty: 20k - 1k down payment (because other 1k was used on warranty) = 19K financed.
Financing warranty and using all 2k for downpayment: 20k - 2k dwnpymt + 1k warranty = 19k financed
It's the same amount, and will cost the same amount over the life of the loan.
The only way you finance any less is if you don't buy warranty and use all your dp money as such. But since that is not the scenario we are discussing it's not to be considered.
Bow out of this if you want. Tell yourself what you want to make you think you are not paying the difference. Whatever makes you feel like you got a better deal one way or the other.
This isn't OT from OP post anyhow. His money is tight and he's questioning the cost effectiveness of an additional warranty. Someone telling him it will be cheaper to not finance the warranty and use part of the down payment to fund it would make the truck cheaper is false. I'm showing that it won't matter.
Last edited by D94R; 09-21-2010 at 04:32 PM.
09-21-2010, 05:20 PM
#13
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Join Date: May 2010
Location: Palmer, Alaska
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Okay... So my 2 cents from the Sales side of the car business... 1st never buy a used car without a warranty... FORD does not offer an extended warranty... IT IS ILLEGAL to sell and "extended warranty" they are called service plans (meaning they do not guarantee that the vehicle will work properly only to pay the cost of repair after the factory warranty is expired and are ONLY sold by aftermarket companies. The dealership has a vendor for this... so when you are purchasing a service plan (not a maintenance plan, there is a difference) you are only buying milage or time after your facotry warranty... which typical is 3 year/36,000m bumper to bumper and 5 year/60,000m power-train (engine transmission and drive train) so if they offer you a 5 year 60,000 mile bumper to bumper you are only buying 2 years and 24,000 miles which ever comes first. Now since it is a used vehicle, unless it is a certified used vehicle (which Ford may offer a warranty which is included in the price of the vehicle) any service plan purchased is from an aftermarket company. Most companies are fairly decent but find out which company they offering plans through and do your research.. some banks offer plans also, and from my experience they are not as good as ones offered by the dealership but it's like anything else some are better then others and if you want to get the best you have to do the research on it... and yes if you are putting $2k down and add a $1k to the price for anything it is all the same it doesn't matter, it all goes towards the purchase of the vehicle as a whole, you still finance an extra $1K. Also never sell your service plan with your vehicle unless you are getting extra money for it... a dealership will not a care a woot about your service plan and will not give you extra money for it which a private party might... SOOOO if you trade your vehicle in cancel your plan and get a refund on the plan by calling the company.. everything at a dealership is negotiable including your APR... Dealerships bump your APR up when financing though an outside source, if you can walk in with financing in hand already, don't mention that you already have financing... Front end sales will lock up more if they know you are not financing with them because they know they won't make as much money on the back end (financing+service+maintenance+aftermarket..... this is where dealerships make their money, prices are usually jacked-up at least 75%)... get your price down and then tell the finance person you have your own financing.... your price is locked... also... if they offer you undercoating, paint protection, and stain guard... it only costs the dealership about 100 bucks 150 max... I've seen people pay up to $1500 for this... it's the biggest scam... the only thing really worth it is the undercoating and it's not worth $1500... the paint protection is a wax and the stain gaurd is like scotch guard that you can buy at Wal-Mart.. only it has a warranty.. so there it is... oh and buy gap insurance.. it's worth every cent if the vehicle is totaled...
that was alittle more then 2cents..
that was alittle more then 2cents..
Last edited by alaskatabby; 09-21-2010 at 05:25 PM.
09-21-2010, 05:36 PM
#14
Member
Had a buddy of mine buy a 200x saab 9-5, he bought a warranty that the dealship he bought it from was offering. a month or so down the road his turbo ended up blowing the oil line off and causing it to commit suicide. Went in to get it worked on and told the mechanic about the warratny plan he got. The mechanic called him back after talking with the warranty company and told him they werent going to cover it.
So he got pissed and called the company, ened up being that the plan they recommened for him didnt include turbocharged engines and wouldnt budge on anything. So he payed x-amount of money for the warranty and still had to pay like 2k for a new turbo for his car. He got ripped off twice haha.
So he got pissed and called the company, ened up being that the plan they recommened for him didnt include turbocharged engines and wouldnt budge on anything. So he payed x-amount of money for the warranty and still had to pay like 2k for a new turbo for his car. He got ripped off twice haha.
09-21-2010, 08:29 PM
#15
Senior Member
Either way, you are paying interest on that 1K, whether it's in the form of financing the 1k of waranty, or additional 1k towards the principle cause you didn't put that towards down payment. You pay the same interest (doesnt matter the rate, so your age and credit gloating don't matter) on that 1k no matter what the paper work says so you aren't saving anything. As well, value of the truck at the time you pay for it vs the cost you pay for the truck being equal(ish) is a given, but that's not what is being debated. In fact, if you pay 9k for a truck + 1k you put down (10k total as you stated), and its only worth 9k at the time you buy it you made the mistake of overpaying by 1k and instantly lost that money upon signature.
Using down payment money to pay for warranty: 20k - 1k down payment (because other 1k was used on warranty) = 19K financed.
Financing warranty and using all 2k for downpayment: 20k - 2k dwnpymt + 1k warranty = 19k financed
It's the same amount, and will cost the same amount over the life of the loan.
The only way you finance any less is if you don't buy warranty and use all your dp money as such. But since that is not the scenario we are discussing it's not to be considered.
Bow out of this if you want. Tell yourself what you want to make you think you are not paying the difference. Whatever makes you feel like you got a better deal one way or the other.
This isn't OT from OP post anyhow. His money is tight and he's questioning the cost effectiveness of an additional warranty. Someone telling him it will be cheaper to not finance the warranty and use part of the down payment to fund it would make the truck cheaper is false. I'm showing that it won't matter.
Using down payment money to pay for warranty: 20k - 1k down payment (because other 1k was used on warranty) = 19K financed.
Financing warranty and using all 2k for downpayment: 20k - 2k dwnpymt + 1k warranty = 19k financed
It's the same amount, and will cost the same amount over the life of the loan.
The only way you finance any less is if you don't buy warranty and use all your dp money as such. But since that is not the scenario we are discussing it's not to be considered.
Bow out of this if you want. Tell yourself what you want to make you think you are not paying the difference. Whatever makes you feel like you got a better deal one way or the other.
This isn't OT from OP post anyhow. His money is tight and he's questioning the cost effectiveness of an additional warranty. Someone telling him it will be cheaper to not finance the warranty and use part of the down payment to fund it would make the truck cheaper is false. I'm showing that it won't matter.
i think i paid like 1400 for a 8 year 100k mile warranty (or close to that) bumper to bumper (premium care) from ford. the ford ones work wierd, the deduct the age from the extended warranty so when i bought my lease out after 2 years, it will give me an additional 5 years coverage (until the loan is paid for) but again, you can always get the pro-rated amount back if you sell it