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Granger Ford

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Zach
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Granger, IA
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www.grangerford.com
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Principal at Granger Motors
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 Can a Ford Protect Extended Warranty Help You Beat Inflation? 1716401012363-94


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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Kodiak

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Thanks for posting this data.
 

Papa Tiger

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Ford F-150 Can a Ford Protect Extended Warranty Help You Beat Inflation? 1716777454394-m2


A Warranty repair of a Lightening Battery failed module. Labor would have been around $3000.
One cell in the stack of Module 7 was out of whack. Truck would not charge.
 
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lrb_35128

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...and this is why, at a minimum, I carry an extended warranty over the term of any car or truck loan.
 

ks54703

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Retired IBEW Local 14 inside wireman
Have a 22 302a XLT 2.7EB payload package 5.5' box F150. Ford no longer has this configuration in the XLT, nor is a Lariat ever again going to get a 2.7 Engine..

Going into year 3 with this truck and in early 2025 will be purchasing a Ford ESP out to 10 years just because of the above fact.

Just put a little over 1300 miles with the AC on over 4 days and hand calculated a MPG return of 23.5 mpg. With (4) 200 # guys and a 5.5' bed loaded full with (3) 32 gt coolers and fishing gear. This includes traveling twice through Chicago before this weekend. Only to be stopped just into Wisconsin for 1.5hrs by a 3 car rear ender.

2.7EB with 3.73 gearing.
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