Truck Topics
Extended Truck Warranties
A recent survey in a popular trucking magazine for owner-operators shows that close to 50 percent of those who bought a new truck also paid for an extended warranty.
This type of protection makes sense, especially for expedited trucking owner-operators, for whom downtime means too much financial loss and, when it occurs while on the road, inconvenience.
Whether buying a new or used truck, owner-operators need to pay special attention to the warranty coverage that either comes with the vehicle (base warranty) or the extra protection (extended warranties) that can purchased for it. The reason is simple - warranties offer a safety net for the independent business people of expedited trucking.
The experts tell us that for owner-operators and small fleets, it's a smart move to buy the extended warranty package. It’s the business people operating one to five trucks who have less capacity for risk and need those warranties.
The purpose of a warranty after all, is to protect the owner in case of a catastrophic failure. For example, injector repairs can be very expensive and a total diesel engine replacement can be devastating to an operation that is already operating on a thin margin.
"You can think of extended warranty plans as a sort of cheap insurance," says Heath Wood, Sales Manager of Middle Georgia Freightliner-Isuzu in Macon, Georgia.
Wood says that an increasing number of his expedited truck customers choose at least some level of extended coverage for their new truck purchases. He credits his sales force for educating the buyers: "Our salesmen are good about bringing the available warranties to the customers' attention."
For new trucks, warranties cover most things that can go wrong due to hidden defects for 12 months or 100,000 miles. A warranty on powertrain components, such as the transmission and engine, can be much longer, in some cases up to 60 months or 750,000. Also, most new truck warranties offer provisions for towing and/or roadside assistance.
Some owner-operators feel that any hidden defects would be exposed during base warranty period, so they feel comfortable taking their chances after that. Others, however, like the security of knowing that they are protected.
Jon Mosier of Freightliner of Knoxville says, "Extended warranties on new equipment are a good idea for the fact that it gives you a little peace of mind beyond the normal coverage. It's important to know when purchasing those coverages just what they cover."
"With an expediter with an MBE engine, I will usually offer 3 year/250,000 mile package because the miles will surpass the years very quickly."
Mosier says that he strongly recommends to his customers that they purchase the extended coverage for the MBE engines. "It gives them peace of mind, knowing that they're covered against a catastrophic breakdown."
Heath Wood: "The MBE warranties are good, the Cat C9 warranties are absolutely good. The Cat warranties are based on hours of operation."
"If a customer purchases the extended warranty called ESC Extended Service Coverage, it then is based on miles not hours which is what the expediter needs and I strongly recommend it."
He continues, "Cat's ESC can be purchased for their C9 through C18 engines in increments of 50,000miles/120 months up to 700,000 miles/120 months. What many people opt for is the 300,000 mile/3 year or the 500,000 mile/5 year programs. I personally like the 5 year option, it's a good plan."
"On the Mercedes engines, it operates on strictly a mileage basis. You can buy a warranty for up to 250,000 miles coverage and like I said, it's cheap insurance."
"MBE offers a base warranty of 2 years/unlimited mileage and the Cat C9 offers the same coverage if the engine is in the Freightliner M2."
"We offer standard 3 year/300,000 mile coverage as part of the purchase price. That has a retail value of $810.00. The 5 year/500,000 coverage is $1,620.00. We also give a 4 year/unlimited towing coverage with our package."
Wood says that coverage is available for various components like injectors and water pumps as well as extended warranties Freightliner systems such as the ir conditioning, cab, axles and steering components, to name a few.
For transmission protection, Allison offers add-on extended coverage. The base warranty for the 3000HS transmission in an M2 is a 2 year/unlimited mileage package, but a buyer can also purchase 3 year, 4 year and 5 year add-on packages, all with unlimited miles.
"Quite often, people will think about extended coverage for the engine," says Heath Wood, "but they don't consider the same protection for the transmission. We've only written 7 seven extended coverage's for the Allisons this year, possibly because people aren't aware of the pricing. You can get a 5 year Extended Transmission Coverage (ETC) for $800.00 and that's very reasonable."
Jon Mosier believes that most of the new truck extended warranties available from OEM's are very reasonable; but that's not always the case with extended warranties for used trucks.
While owner-operators can purchase used truck extended warranty protection plans from a variety of third parties, the experts caution that the buyer should sure the company dealt with will outlive the coverage bought. There are not many regulations on who can sell extended warranty plans. Recently, some third parties defaulted on their extended warranty offerings or declared bankruptcy.
Mosier says, "I'm not a big fan of the third-party protection plans for used trucks because of the cost. For a 2 year/200,000 mile plan, it can run from $2,500-$3,500. The companies also make the buyer jump through to many hoops to get the coverage and they will sometimes fight the warranty claims."
If you’re not sure what warranties apply to your engine vs. other components, check your papers.
If you have warranty questions, check with your dealer. That’s always the best source for interpreting current coverage or exploring options.