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Granger Ford

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It is not breaking news that prices are up on everything. Inflation has run high, and the federal reserve doesn’t think the battle is over yet to get inflation back down to 2%. One of the areas that has seen some of the biggest price increases is the automotive repair industry. The Federal Reserve Bank goes in detail to explain the reasons why, but it boils down to a tight workforce that is in high demand as well as a parts shortage.


I was curious to see how much that has affected our service department, so I pulled all our repair orders that were paid by an extended warranty company for 2 time periods (Jan-Apr 2020 and Jan-Apr 2024) to see how it has changed at our shop. Through the first 4 months of 2020 our average repair order covered by an extended warranty was $776, and in 2024? An eye-popping $1841! That is a 237% increase in 4 years. Admittedly we have a small sample size being only one dealership. But for the last 3 years, the federal reserve has registered a 5%, 13% and 8% rate of inflation for motor vehicle repair, well out-pacing overall CPI.

Ford F-150 Lightning Can a Ford Protect Extended Warranty Help You Beat Inflation? 1716401135288-k8


So what can be done to minimize the effects of repair inflation? One of the lesser talked about benefits of an extended warranty is that you are locking in tomorrow’s repairs at today’s repair prices. We work with both Mopar and Ford extended warranties and both of them have many actuaries that determine our cost for their plans. The feedback I’ve received from both manufacturers suggests prices will continue to rise in the future, because repair cost increases are well outpacing the reserves set up to cover them. Ford has scheduled a price increase in August of this year and Mopar just increased its prices in February and is considering doing it again.


I again was interested in seeing what increases we’ve seen over the last 2 years of selling service contracts and our average service contract price has increased 14%, much less than the 23% the CPI repair costs have increased at the same time. None of us can predict the future, but in the past inflation has proven to be sticky and takes longer than anticipated to get fully under control.


Another tool we’ve added to our websites is the ability to pay monthly. We realize increased prices have eaten away at monthly budgets and spending over $2000 on extended warranty coverage can be hard to budget for. So, we added a monthly payment option that allows our customers to pay for their warranty over an 18-month term. Our average monthly payment is taken automatically and comes out to less than $100/month.


You can find our coverage options for both Mopar and Ford on our websites.

www.buymoparwarranty.com
www.grangerfordextendedwarranty.com
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RocketGhost

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Can you use FordPass points towards the purchase of a warranty? What is the redemption rate? I have 22k points from the purchase of my truck.
 

fvineyard

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Yes. 22k FordPass points is worth $110 towards the purchase of an extended warranty as I recall.
 

GunRack

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I'd be curious if the avg warranty repairs are any higher or lower for Ford's EVs vs non EVs.

I did 6yrs \ 100k miles for $900 ish before prices jumped up in 22. Pretty happy I did the warranty even though I haven't yet gotten to my warranty period yet. Feeling pretty confident I'll see that value back before 100k. I'm not sure what all can go wrong with the EV side but I'm a supporter of locking in repair costs.
 

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Granger Ford

Granger Ford

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Can you use FordPass points towards the purchase of a warranty? What is the redemption rate? I have 22k points from the purchase of my truck.
Yes, I believe 200 points is $1.
 
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Granger Ford

Granger Ford

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I'd be curious if the avg warranty repairs are any higher or lower for Ford's EVs vs non EVs.

I did 6yrs \ 100k miles for $900 ish before prices jumped up in 22. Pretty happy I did the warranty even though I haven't yet gotten to my warranty period yet. Feeling pretty confident I'll see that value back before 100k. I'm not sure what all can go wrong with the EV side but I'm a supporter of locking in repair costs.
That is a good question. I don't think we have enough data yet to have a good number on this. I know they anticipate having lower costs, because the cost of a contract on a Lightning is less than a comparable F-150.
 
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Granger Ford

Granger Ford

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Jajar1124

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Buy two of these instead of the puck lift that RoughCountry sells. This will give you both lift and stability!
https://eibach.com/product/E60-35-061-01-10?epsid=3316
These go right inside your stock springs.
great option for a true leveling by lifting the front end, but that rough country kit I linked actually drops the bed in order to level. Saw that someone actually didn’t install the front at all and just the rear for an even stance. Since I don’t tow or haul much figured I’d just drop the rear for the level look.
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