Gimme Shelter

Extended warranties can cover road service, towing, parts and labor. Expenses saved from one roadside breakdown can make up for the cost of the warranty.

Buy a heavy-duty engine, and you won’t see much difference in one company’s standard warranty versus another’s. They protect against defects in materials and workmanship for two years or a quarter million miles, whichever comes first, with a few variations between manufacturers. But with the dealer’s help and a close look at your operation, you can decide whether an extended warranty is a good idea and, if so, which terms are most suitable.

Determining your precise needs can get complicated. All standard warranties include either 60-month or 500,000-mile “major components” coverage, so is an extended warranty necessary? Original equipment manufacturers don’t define most engine parts – injectors, turbochargers, oil and water pumps, starter motors, etc. – as major components. Extended warranties can cover non-major components with 60-month/500,000-mile protection, or even more. Dealers can show buyers what kind of warranty protection will be best.

Shane Taylor, who handles sales and finance at Northern Alabama Peterbilt in Tuscaloosa, asks prospective buyers three main questions: what the truck’s annual mileage will be, how long until it’s resold, and what it will be used for. Extended warranty terms are also based on truck make and model, and how it’s spec’d.

“The cost of extended coverage varies depending on its duration and content,” says Cummins spokeswoman Cyndi Nigh. Taylor says costs for extended warranty coverage on Cummins ISX and ISM engines run from about $1,600 to about $3,200. Spokesman Rick Dziadzio says Detroit Diesel’s new P-3 warranty, which he says is “basically coverage for all components,” costs about $2,500.

“There are dozens of different ways to put together a warranty, and dealers love to talk with drivers about this,” says Caterpillar spokesman Jason Phelps.

Taylor says an engine used for over-the-road application needs a higher-mileage, lower-duration warranty, while local and vocational engines need lower-mileage, higher-duration. Dealers can adjust extended engine warranty terms – more or less mileage or duration – without big cost changes. For example, Taylor has a three-year/500,000-mile warranty for $800 and a five-year/100,000 mile warranty for $750.

“Costs can get out of whack,” says Taylor, who often sees ill-advised warranties on trade-ins. “A guy will have five years or 500,000 miles on his warranty. He’ll have the truck five years and he hasn’t put 200,000 miles on it. That warranty could’ve been better tailored to fit his needs.”

Taylor says a dealer normally has one or two good warranty packages in mind for the buyer. “But he can customize the warranty down to a lot of detail” if the buyer requests it, he says.

Engines used for extra heavy-duty service “require a customized warranty that takes into account the severe nature of the application,” says Volvo spokesman Jim McNamara. “The warranty coverage would also be reviewed by Volvo to ensure the suitability of the truck for the job it is intended to do.”

It’s critical that a truck not only be comprehensively warranted, but also spec’d for any demanding application. “One problem we run into is drivers who underspec their trucks,” says Detroit’s Dziadzio. An engine maker might not honor coverage for certain problems if the engine is not designed for its job.

“To get the best performance from the Caterpillar engine and from the truck in general, drivers need to talk with the dealer and have an honest discussion about the work they’re going to be doing,” Phelps says. “Dealers will counsel drivers to look at the most suitable spec.”

OEMs will also not cover damage caused by abuse, says Danny Hembree, service manager at Northern Alabama Peterbilt. “If a driver hears his engine knocking, and he keeps running it until it throws a rod out the side, then they’re not going to cover that,” he says. “It’s a way of putting some responsibility back on the driver.”

Hembree says the newer engines electronically record whether they’ve been over-revved or otherwise abused. In such cases, OEMs generally rely on advice from the mechanic. “We’re their eyes and ears,” Hembree says.

In addition to improper operation, substandard parts and labor can be grounds for denying warranty coverage. For example, Caterpillar’s warranty says damage from “attachments, accessory items and parts not sold or approved by Caterpillar” is not covered, and neither are damages from improper use and unauthorized repairs.

The owner’s warranty responsibilities also extend to proper maintenance and documentation. Volvo’s warranty, for example, requires the owner to “adhere to preventive maintenance records as outlined.” It also requires owners to keep accurate and complete service records.

“If a customer did not follow the oil drain interval recommendations and had a failure related to dirty oil, that failure would not be covered,” Nigh says.

“The number one problem we run into is drivers who don’t have records that they’ve had the oil changed or other service completed,” Phelps says. Service performed on Cat engines at Cat-affiliated repair shops is recorded in a database, so there are complete records. Furthermore, Phelps adds, “Any time you can show a good trail of documentation for service, you’re going to help your resale.”

Sometimes truckers coordinate their extended warranties with the life cycle of ownership so they can sell or trade the truck with a year of engine warranty left. Remaining warranty makes a pre-owned truck more valuable and easier to sell or trade because the buyer is sheltered from significant repair expenses while the warranty lasts.

Even apart from resale, an extended warranty can mean extended peace of mind for you, as well as more stability in planning your maintenance costs during the term of the warranty


BAIT FOR 2007?
So far, engine makers have not revealed any plans for beefed-up warranties to calm buyers’ doubts and boost initial sales of emission-compliant engines for 2007. Instead, they are relying on plenty of testing to ensure the 2007 engine rollouts will avoid the sales spike and decline that accompanied the 2002 engine debuts.

Caterpillar did not alter its warranty for its 2002 engine when it introduced ACERT technology. And the company “currently has no plans to change the warranty for 2007 heavy-duty highway engines,” says spokesman Jason Phelps.

At Detroit Diesel, spokesman Rick Dziadzio says any warranty changes probably wouldn’t be announced until just before the new engines come out. “It wouldn’t surprise me if there was some type of incentive package in order to help provide confidence in the new technology so we don’t see a dip in production volumes.”

“It’s still a little early to say whether Cummins is going to have a program for its 2007 heavy-duty products that’s similar to the 2002 Uptime Guarantee,” says spokeswoman Cyndi Nigh.

Cummins used its Uptime Guarantee to build buyer confidence in its ’02 emission-compliant ISX and ISM engines. In the Uptime program, Cummins agreed to pay for a temporary replacement truck if an ISX or ISM failed. With less than one claim per 1,000 engines, Uptime saw limited use, but it soothed buyer doubts about the new engines and was “a huge success,” Nigh says. The Uptime Guarantee program expired Dec. 31.

Unlike Cummins, “We did not specifically support EPA ’02 compliant engines with an enhanced warranty program,” says David McKenna, Mack product and marketing manager. Mack has no plans to enhance warranty protection for 2007, he says.

“Volvo did not change its engine warranty for the 2002 engines, other than to add the EGR system to the warranty coverage,” spokesman Jim McNamara says. “2007 engine warranties have not been decided.”


RESOURCES
CATERPILLAR
www.cat.com
(800) 447-4986

CUMMINS
www.cummins.com
(800) 343-7357

DETROIT DIESEL
www.detroitdiesel.com
(313) 592-5800

MACK
www.macktrucks.com
(800) 866-1177

VOLVO
www.volvo.com
(800) 528-6586

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