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Author Topic:   New Mercury Incentives

Jeff C posted 01-11-2006 12:14 PM ET (US)
In addition to to the incentives on Verado engines, Mercury [is believed to have] just posted these incentives on four-stroke and OptiMax enginess:
40 to 60-HP four-stroke, additional two years
75 to 115-HP four-stroke, additional two years or $200 cash rebate.
75 to 225-HP OptiMax, additonal two years. No rebate option.

sosmerc posted 01-11-2006 08:53 PM ET (US)
Keep in mind that these incentives will probably end after April 15.
LHG posted 01-11-2006 10:01 PM ET (US)
Incentive programs are revealing, and always tell a hidden story.
In the case of Mercury, on the 40-60 4-strokes, and all Optimax's, there is no cash, and the shortest extended warranty of any brand. That tells me they are only doing this to keep up with the others, and business for these products must be strong.
On the Merc-aha 75-115 4-strokes, also quite popular, only 5 years warranty is needed, plus a little kicker of $200 back. That indicates to me they want to be sure to clean out all inventory to make way for the new Verado platform engines, but that the engines are good sellers.
On the Verado, the 5 years, and $600 back indicates they need to get the price down a little on that machine, and this will help the boat dealers sell the pre-rigged Verado boats.
The six year warranties of the others indicates they are little hungrier than Mercury? Or just make more reliable products?
As for the 7 year warranty of Evinrude, well you decide. I guess there are three ways to look at it.
1. They have the MOST reliable product of any manufacturer, and hence can offer the longest warranty, or
2. They are the hungriest.
3. Both of above.
Benh posted 01-11-2006 10:06 PM ET (US)
Do the incentives apply when you buy a new Whaler that has a Merc motor?
cschorer1979 posted 01-11-2006 10:17 PM ET (US)
Ben,
Yes, the rebates do apply if you purchase a new Whaler. I just got a new 190 outrage and the rebates were put towards the new purchase.
However, as stated earlier, you must do it by 4/15

Craig
jimh posted 01-12-2006 11:48 PM ET (US)
For details of the promotions and their time periods, see the original annoucements from the manufacturer.
Hyperlinks to manufacturer information:
http://continuouswave.com/ubb/Forum1/HTML/011408.html
jimh posted 01-13-2006 12:08 AM ET (US)
I look at the OptiMax offer of an extended warranty at a MSRP of $2,200 and see that they must have experienced a lot of failures with that engine in those extra two years. Isn't that what the price, $2,200, is really saying? You should expect engine failures because if we have to cover it we'd charge you $2,200 extra to protect ourselves.
Attaching these MSRP "values" to the warranty extension but not offering the buyer the cash makes the real value of them even harder to figure.
And among the various brands, the discount which the engines usually sell from the MSRP also varies. So this makes it even harder to compare the "value" price of a warranty extension.
It is far beyond me to draw THE CORRECT inference from the various incentives. They are so complex that all they do for me is muddy the waters of the real engine price. Confusing the buyer is probably part of the intent. In the end you have to pay a certain price for the engine. If the manufacturer can disguise that price so it become harder to compare with another brand, it works in his favor.
LHG posted 01-13-2006 01:41 AM ET (US)
The only way one can determine any real value of an extended warranty is when they will give cash up front of lieu of same. The $4/horsepower offer of Evinrude tells what it's really worth, for instance, so even for a 250 and 4 extra years, it's only worth $1K. In Mercury's case, the fact that no cash is offered indicates the extended warranty isn't worth much, nor much of a risk to them.
Regarding the 3.0 liter Optimax's, as Buckley said of the 2003 and later models, they are FIXED. In spite of internet rumors, such as the one about some dealer rebuilding 40 a year (which would be NATIONAL boating news if true, and was actually posted on scream and fly.com by an E-tec guy) mechanics at Mercury's three largest dealerships in the COUNTRY have told me they are bulletproof now. Owners here of these models report zero problems also.
I have been told the biggest sellers in the Optimax line are the 200's, 225, and 250's. They have a reputation for being "best of breed" in fuel economy, and hot performers.
Incidentally, recently I ran into a guy who repowered his go-fast with a new pair of bracket mounted 250 Evinrudes, and although he REALLY likes them, he said they are fouling out spark plugs continuously. That was a problem the Fichts also had. I wonder if his problem is just unique to him?
swist posted 01-13-2006 07:37 AM ET (US)
Yep, getting hard facts on outboards, particularly on their *real* reliability stats, is nigh-on impossible. It all starts with the fact that in most cases we have no idea how many of any given motor were actually sold. As an example, we suspect that many many many Honda BF130s were sold, so if we hear of a few clunkers, it's insignificant. But if there were only a couple of hundred of another engine sold, hearing the same number of reports of problems might be a lot more telling...

rtk posted 01-13-2006 08:34 AM ET (US)
I really don't think you can equate the cash back incentive to the value of an extended warranty.
They are simply offering a sales incentive to move product.
If they "give" you an extended warranty at the time of purchase, it cost the manufacturer absolutely nothing in reduced profit on the sale. They may be creating a future liability, but that will not be a problem for the next three years.
The cash incentive is an immediate reduction in profit. I think that is why the cash offered is not equal to what Mercury may charge for the two year extended warranty.
I had the option of extending my already extended warranty on my 2003 250 EFI. (4 years to 6 years) The cost was around $2000 if I remember correctly. I said no thank you.
One way to look at choosing the extended warranty instead of the $600- an additional two years of factory warranty protection is only costing you $600. Cheap insurance if you ask me.
Rich
jimh posted 01-13-2006 09:32 AM ET (US)
As mentioned before, the warranty is a form of insurance. Apparently almost all outboard manufacturers believe that customers are risk-averse for expensive engine repairs, and customers will eagerly buy additional insurance to shelter them from that risk or eagerly accept it for "free."
The manufacturer can offer this insurance either by getting a third-party to underwrite the risk, or by assuming the risk themselves. How a company chooses to undertake the risk of extending the warranty on their products is probably a very complicated decision which is made after consideration of the true costs involved. The problem for the consumer is that only the manufacturer has the real data about the historical costs of assuming the risk of extended warranty coverage.
To try to infer something about the historical costs of extended coverage from the current offering seems to me to be impossible. It might very well be that a particular manufacturer is forced into offering an extended warranty on a product by the market pressure of all of this competitors doing so. As a result, that manufacturer may be assuming much more risk, so much risk in fact that no third party will insure it for a reasonable cost.
swist posted 01-14-2006 09:33 AM ET (US)
Jim H...
All well stated. However just as a point of reference, in some other industries where things are more in the open, extended warranties are very high profit items. As a matter of fact in things like consumer electronics where there is cutthroat competition, profit margins are so low on the actual goods that extended warranty sales are the only way the business stays afloat (parts and other kinds of services are the remaining pieces).
As you say it's like any other insurance - and thus the probability of you making out in the deal is very low.
Having said that, extended warranties do provide psychological comfort for the risk-averse. And people are willing to put a (big)price tag on that.
LHG posted 01-14-2006 11:25 AM ET (US)
One last word about warranties. Where do you live and use the engine? This matters.
If you are in South FL, and are an active boater, warranties are very valuable to you, especially in a tropical salt environment. Putting 300-500 hours a year on an engine is easy, so an extended 5 year warranty is insuring you for 1500-2500 hours of use! This can be valuable.
If you live in the frozen North, you may only put 50-75 hours a year on an engine, so your 5 year warranty is only covering you for 250-350 hours of operation. With the reliability of today's engines, I'd say THAT warranty is all but worthless. Take any cash you can get.
Auto manufacturers don't lose on this becasue they use a double measure of Miles or years, whichever comes first. But outboard engine manufacturers haven't yet started to use the ECM recorded engine hours as a warranty limiter. Maybe they will get smart one of these days.
It's also why you should buy your used outboard engine from way up North. Based on calendar year, they will likely have 1/3 the hours of a FL engine.
JoJo posted 01-15-2006 10:07 AM ET (US)
LHG:
Well said and well presented. Thank you. JoJo
jimh posted 01-17-2006 08:37 PM ET (US)
Larry--That is a very intriguing idea you propose: using the on-board engine control module's operating hour totals as a basis for warranty coverage.
And you're right about northern boaters. I thought we had the boat in the water about as much as we could this season. We started in the Spring before the docks at the ramps were in, and ended up driving 1,600 miles to South Carolina in October to close out. We only had 65-hours on the engine.
A 1000-hour warranty would last me 15 years!
LHG posted 01-18-2006 02:26 PM ET (US)
Jim - I don't think you could win on that. They would probably do a warranty on years or hours, whichever comes first, like the autos.
Right now, it's the warm weather boaters like FL and CA that are winning on these extended warranties.
Mambo Minnow posted 01-21-2006 04:13 PM ET (US)
In addition to the above good points, it Merc offering only a "declining" 3 year warranty extension or the same protection as the first 3 years?
jimh posted 01-22-2006 11:13 AM ET (US)
For details of the promotions and their time periods, see the original annoucements from the manufacturer.
Hyperlinks to manufacturer information:
http://continuouswave.com/ubb/Forum1/HTML/011408.html

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Author	Topic: New Mercury Incentives
Jeff C	posted 01-11-2006 12:14 PM ET (US) In addition to to the incentives on Verado engines, Mercury [is believed to have] just posted these incentives on four-stroke and OptiMax enginess: 40 to 60-HP four-stroke, additional two years 75 to 115-HP four-stroke, additional two years or $200 cash rebate. 75 to 225-HP OptiMax, additonal two years. No rebate option.
sosmerc	posted 01-11-2006 08:53 PM ET (US) Keep in mind that these incentives will probably end after April 15.
LHG	posted 01-11-2006 10:01 PM ET (US) Incentive programs are revealing, and always tell a hidden story. In the case of Mercury, on the 40-60 4-strokes, and all Optimax's, there is no cash, and the shortest extended warranty of any brand. That tells me they are only doing this to keep up with the others, and business for these products must be strong. On the Merc-aha 75-115 4-strokes, also quite popular, only 5 years warranty is needed, plus a little kicker of $200 back. That indicates to me they want to be sure to clean out all inventory to make way for the new Verado platform engines, but that the engines are good sellers. On the Verado, the 5 years, and $600 back indicates they need to get the price down a little on that machine, and this will help the boat dealers sell the pre-rigged Verado boats. The six year warranties of the others indicates they are little hungrier than Mercury? Or just make more reliable products? As for the 7 year warranty of Evinrude, well you decide. I guess there are three ways to look at it. 1. They have the MOST reliable product of any manufacturer, and hence can offer the longest warranty, or 2. They are the hungriest. 3. Both of above.
Benh	posted 01-11-2006 10:06 PM ET (US) Do the incentives apply when you buy a new Whaler that has a Merc motor?
cschorer1979	posted 01-11-2006 10:17 PM ET (US) Ben, Yes, the rebates do apply if you purchase a new Whaler. I just got a new 190 outrage and the rebates were put towards the new purchase. However, as stated earlier, you must do it by 4/15 Craig
jimh	posted 01-12-2006 11:48 PM ET (US) For details of the promotions and their time periods, see the original annoucements from the manufacturer. Hyperlinks to manufacturer information: http://continuouswave.com/ubb/Forum1/HTML/011408.html
jimh	posted 01-13-2006 12:08 AM ET (US) I look at the OptiMax offer of an extended warranty at a MSRP of $2,200 and see that they must have experienced a lot of failures with that engine in those extra two years. Isn't that what the price, $2,200, is really saying? You should expect engine failures because if we have to cover it we'd charge you $2,200 extra to protect ourselves. Attaching these MSRP "values" to the warranty extension but not offering the buyer the cash makes the real value of them even harder to figure. And among the various brands, the discount which the engines usually sell from the MSRP also varies. So this makes it even harder to compare the "value" price of a warranty extension. It is far beyond me to draw THE CORRECT inference from the various incentives. They are so complex that all they do for me is muddy the waters of the real engine price. Confusing the buyer is probably part of the intent. In the end you have to pay a certain price for the engine. If the manufacturer can disguise that price so it become harder to compare with another brand, it works in his favor.
LHG	posted 01-13-2006 01:41 AM ET (US) The only way one can determine any real value of an extended warranty is when they will give cash up front of lieu of same. The $4/horsepower offer of Evinrude tells what it's really worth, for instance, so even for a 250 and 4 extra years, it's only worth $1K. In Mercury's case, the fact that no cash is offered indicates the extended warranty isn't worth much, nor much of a risk to them. Regarding the 3.0 liter Optimax's, as Buckley said of the 2003 and later models, they are FIXED. In spite of internet rumors, such as the one about some dealer rebuilding 40 a year (which would be NATIONAL boating news if true, and was actually posted on scream and fly.com by an E-tec guy) mechanics at Mercury's three largest dealerships in the COUNTRY have told me they are bulletproof now. Owners here of these models report zero problems also. I have been told the biggest sellers in the Optimax line are the 200's, 225, and 250's. They have a reputation for being "best of breed" in fuel economy, and hot performers. Incidentally, recently I ran into a guy who repowered his go-fast with a new pair of bracket mounted 250 Evinrudes, and although he REALLY likes them, he said they are fouling out spark plugs continuously. That was a problem the Fichts also had. I wonder if his problem is just unique to him?
swist	posted 01-13-2006 07:37 AM ET (US) Yep, getting hard facts on outboards, particularly on their real reliability stats, is nigh-on impossible. It all starts with the fact that in most cases we have no idea how many of any given motor were actually sold. As an example, we suspect that many many many Honda BF130s were sold, so if we hear of a few clunkers, it's insignificant. But if there were only a couple of hundred of another engine sold, hearing the same number of reports of problems might be a lot more telling...
rtk	posted 01-13-2006 08:34 AM ET (US) I really don't think you can equate the cash back incentive to the value of an extended warranty. They are simply offering a sales incentive to move product. If they "give" you an extended warranty at the time of purchase, it cost the manufacturer absolutely nothing in reduced profit on the sale. They may be creating a future liability, but that will not be a problem for the next three years. The cash incentive is an immediate reduction in profit. I think that is why the cash offered is not equal to what Mercury may charge for the two year extended warranty. I had the option of extending my already extended warranty on my 2003 250 EFI. (4 years to 6 years) The cost was around $2000 if I remember correctly. I said no thank you. One way to look at choosing the extended warranty instead of the $600- an additional two years of factory warranty protection is only costing you $600. Cheap insurance if you ask me. Rich
jimh	posted 01-13-2006 09:32 AM ET (US) As mentioned before, the warranty is a form of insurance. Apparently almost all outboard manufacturers believe that customers are risk-averse for expensive engine repairs, and customers will eagerly buy additional insurance to shelter them from that risk or eagerly accept it for "free." The manufacturer can offer this insurance either by getting a third-party to underwrite the risk, or by assuming the risk themselves. How a company chooses to undertake the risk of extending the warranty on their products is probably a very complicated decision which is made after consideration of the true costs involved. The problem for the consumer is that only the manufacturer has the real data about the historical costs of assuming the risk of extended warranty coverage. To try to infer something about the historical costs of extended coverage from the current offering seems to me to be impossible. It might very well be that a particular manufacturer is forced into offering an extended warranty on a product by the market pressure of all of this competitors doing so. As a result, that manufacturer may be assuming much more risk, so much risk in fact that no third party will insure it for a reasonable cost.
swist	posted 01-14-2006 09:33 AM ET (US) Jim H... All well stated. However just as a point of reference, in some other industries where things are more in the open, extended warranties are very high profit items. As a matter of fact in things like consumer electronics where there is cutthroat competition, profit margins are so low on the actual goods that extended warranty sales are the only way the business stays afloat (parts and other kinds of services are the remaining pieces). As you say it's like any other insurance - and thus the probability of you making out in the deal is very low. Having said that, extended warranties do provide psychological comfort for the risk-averse. And people are willing to put a (big)price tag on that.
LHG	posted 01-14-2006 11:25 AM ET (US) One last word about warranties. Where do you live and use the engine? This matters. If you are in South FL, and are an active boater, warranties are very valuable to you, especially in a tropical salt environment. Putting 300-500 hours a year on an engine is easy, so an extended 5 year warranty is insuring you for 1500-2500 hours of use! This can be valuable. If you live in the frozen North, you may only put 50-75 hours a year on an engine, so your 5 year warranty is only covering you for 250-350 hours of operation. With the reliability of today's engines, I'd say THAT warranty is all but worthless. Take any cash you can get. Auto manufacturers don't lose on this becasue they use a double measure of Miles or years, whichever comes first. But outboard engine manufacturers haven't yet started to use the ECM recorded engine hours as a warranty limiter. Maybe they will get smart one of these days. It's also why you should buy your used outboard engine from way up North. Based on calendar year, they will likely have 1/3 the hours of a FL engine.
JoJo	posted 01-15-2006 10:07 AM ET (US) LHG: Well said and well presented. Thank you. JoJo
jimh	posted 01-17-2006 08:37 PM ET (US) Larry--That is a very intriguing idea you propose: using the on-board engine control module's operating hour totals as a basis for warranty coverage. And you're right about northern boaters. I thought we had the boat in the water about as much as we could this season. We started in the Spring before the docks at the ramps were in, and ended up driving 1,600 miles to South Carolina in October to close out. We only had 65-hours on the engine. A 1000-hour warranty would last me 15 years!
LHG	posted 01-18-2006 02:26 PM ET (US) Jim - I don't think you could win on that. They would probably do a warranty on years or hours, whichever comes first, like the autos. Right now, it's the warm weather boaters like FL and CA that are winning on these extended warranties.
Mambo Minnow	posted 01-21-2006 04:13 PM ET (US) In addition to the above good points, it Merc offering only a "declining" 3 year warranty extension or the same protection as the first 3 years?
jimh	posted 01-22-2006 11:13 AM ET (US) For details of the promotions and their time periods, see the original annoucements from the manufacturer. Hyperlinks to manufacturer information: http://continuouswave.com/ubb/Forum1/HTML/011408.html