How Much Does An Extended Warranty Add To The Resale Value?

As Jalopnik’s resident car buying expert and professional car shopper, I get emails. Lots of emails. I’ve decided to pick a few questions and try to help out. This week we are discussing selling a car with an extended warranty, avoiding markups with employee pricing, and buying a high mileage hot hatchback.

First up, if you are selling a car with an extended warranty can you get more for it?

“I have a 2016 Focus 1.0 Ecoboost, 50k miles, manual, that I’m not sure I wish to keep.

Fortunately, according to KBB, the trade value is only slightly behind what I owe; private sale value is pretty much break-even. My soul is prepared to lose a little bit of cash if the right replacement came along.

The car was bought certified pre-owned and I bought every warranty Ford offered. The car is covered bumper-to-bumper, maintenance and consumables included (sans tires, of course) until 100,000 miles. These warranties (as I understand it) are transferable to a new owner.”

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Before I get into the warranty piece I will say that KBB tends to be on the higher side of trade-in evaluations and it’s rare that a dealer will give the full KBB price, so be prepared for a lower offer in the real world.

As for the warranty, while it is transferable and that may have some value to a private buyer, a dealer isn’t really going to care all that much and likely won’t give you anything more for it. If you had a high-end or specialty car like a Range Rover or a Ferrari that warranty balance could make a big difference when it comes time to sell it, but even a private buyer isn’t likely to pay a significant premium for a warranty balance on a Ford Focus.

Next up, can Ford’s X-plan pricing help me avoid markups?

“I think I’m in the market for a 2020 Ford Tremor. I realize these may sell like Raptors with a mark-up, but I’m hoping not. My wife just started a new job and has access to the Ford X-Plan through her employer. My question is two-fold: First, does the X-Plan guarantee me the best price possible? Second, should I assume I’ll still be subject to an ADM using the X-plan, or does the plan exempt me from mark-ups? I appreciate any input you have here.”

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Ford’s X-plan pricing and other similar partner or friends and family-based programs can often make things a lot easier when it comes to haggling for the price of a car. However, on a specialty car like a Tremor, Raptor, or GT350, the dealers are under no obligation to honor the X-plan and if they want to sell their Tremors for over MSRP there is no real mechanism in place to guarantee your X-plan price. In fact, Ford will often exclude those specialty cars from the X-plan program.

Finally, how much of a gamble is buying a Golf R with almost 100,000 miles.

“I don’t drive a lot, maybe 5k miles a year. But when I do drive, I want it to be fun! I’ve had my eye on a 2016 Golf R with 89k miles for under $22k with a full-service history.

On the one hand, I figure it’s a bargain that won’t depreciate too much further in a few years since I will barely increase the mileage. On the other hand, it seems nuts to pay $22k for an economy-based car that’s already seen nearly a century. Is this an insane idea?”

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On the one hand, you have a German-engineered hot-hatchback that is pushing 100,000 miles, but on the other, you have a pretty-excellent hot-hatchback that is about $18,000 cheaper than when it was brand new. The full-service history is a good thing, and I’m going to assume that most of those 89,000 miles are highway based, which tends not to put as much wear on a car. While this is somewhat of a risky purchase, a good inspection can reveal any serious issues that are pending. If the car was well cared for and you have some buffer money for maintenance, this could be a solid opportunity to get a Golf R for a decent price.

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About the author

Tom McParland

Tom is a contributing writer for Jalopnik and runs AutomatchConsulting.com. He saves people money and takes the hassle out of buying or leasing a car. (Facebook.com/AutomatchConsulting)