Ford Warranty Costs: What Happened in 2008?

Michael Karesh
by Michael Karesh

Automotive News [sub] reports that Ford has reduced its global warranty costs by a not inconsequential $1.2b during the past two years. My initial thought: fewer sales, fewer warranties to honor. But the per-vehicle warranty repair rate has dropped by 50 percent for U.S. Ford, Lincoln and Mercury vehicles since 2004. “Ford’s biggest quality gains have been on newly launched vehicles compared with the vehicles they replaced,” pronounceth Curt Yun, Ford’s director of global warranty. “The last 24 months have revealed some of our best quality results.” Yes, BUT while the results may have been revealed in the last two years, the headline numbers don’t strictly apply to cars built in the last two years. Ford made its largest reliability gains in the 2005 and (especially) the 2006 model years. Recently the rate of improvement has slowed: savings in 2008 only account for $100m of the $1.2b total. Why didn’t FoMoCo save more in ’08? This suggests that the low-hanging fruit has been picked. Of course, the factory warranty is only three years on Fords and four on Lincolns. How will these new models hold up after the warranty expires, as has recently been the case for the 2005s?

[To view Ford’s performance in TrueDelta’s Car Reliability Survey, click here]

Michael Karesh
Michael Karesh

Michael Karesh lives in West Bloomfield, Michigan, with his wife and three children. In 2003 he received a Ph.D. from the University of Chicago. While in Chicago he worked at the National Opinion Research Center, a leader in the field of survey research. For his doctoral thesis, he spent a year-and-a-half inside an automaker studying how and how well it understood consumers when developing new products. While pursuing the degree he taught consumer behavior and product development at Oakland University. Since 1999, he has contributed auto reviews to Epinions, where he is currently one of two people in charge of the autos section. Since earning the degree he has continued to care for his children (school, gymnastics, tae-kwan-do...) and write reviews for Epinions and, more recently, The Truth About Cars while developing TrueDelta, a vehicle reliability and price comparison site.

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  • Speedlaw Speedlaw on Feb 01, 2009

    My only warranty issues with any new car were with BMW. The dealer and the home office worked to fix my blooey Satnav system. I was treated well at all times (and I was always civil and cordial). Upgraded parts were provided, and the issue was, I was informed, fixed at the production side. Thank you BMW. This is why you are an 'aspirational' brand.

  • Psarhjinian Psarhjinian on Feb 01, 2009
    he factory then to pay dealer foIt’s a lot cheaper to make quality product at tr warranty work. Or you could do what Volkswagen does: make a car that gives the impression of quality and screw the dealer out of warranty work.
  • Nick Nick on Feb 01, 2009
    make a car that gives the impression of quality and screw the dealer out of warranty work. psarhjinian, that's ALL the German manufacturers!
  • Patrickj Patrickj on Feb 01, 2009

    The 60K mile extended warranty on my 2006 Freestyle passed entirely unused on Friday night. Total warranty repairs were a set of rear brake pads and rotors (Ford paid for second replacement in warranty period), flashing the computer because of intermittent airbag light turn-on, and un-jamming the fold-down second seat once. My biggest complaint is the chintzy carpet on this SEL model. Wouldn't surprise me to have to replace it during my ownership.

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