BMW Extended warranty vs 3rd party

Hi,


My 2009 X5 30i warranty expires in less than a month . It has low mileage ~21k miles on it now.

I am interested in BMW 3yr/70K warranty or 3rd party warranty plans. My local dealer quoted by following prices on BMW warranty

BMW Gold - 84months/70K miles - $2800
BMW Platinum - 84months/70k miles - $4800

Is there any BMW dealers offering a better price? Any recommendations on 3rd party warranties? Any gotchas to look out for?

Thanks in advance !!! I appreciate for all your advice/suggestions/comments

3rd party warranties are a gamble at best. Be very thorough in determining what is and what is not covered, you may be surprised. Also be sure you buy from a reputable company. A typical scam is to start one of these companies, sell a bunch of policies, and then declare bankruptcy leaving you policyholders with a worthless piece of paper. Safest bet is to buy from the manufacturer if you feel that you need an extended warranty. For most people they will be a bad investment. The odds are stacked in favor of the insurance company. You may be "lucky" and have a car with allot of problems that are actually covered by the warranty, but odds are you will not. These policies make a huge amount of money for the insurance companies and the people that sell you the policy. One estimate is that only 12% of what is paid for extended warranties is paid back in repairs. The rest goes to advertising, commissions, and profit.

Couple of thoughts...

Extended warranties are nothing more than insurance policies. Any third party EW is definitely designed to make money for the issuing company. You're betting you'll have enough covered problems to justify the cost, the issuer is betting you won't have enough covered problems to justify the cost -- and/or you'll wreck or sell the car before you get enough miles or age on the car to really use the warranty.

BMW backed extended warranty isn't likely to be a money loser for BMW, and may be a money maker, but they also recognize the value in getting you back into the dealership to look over all the pretty new cars while something's being fixed with your car. Even better, they may get you in twice and also have you drive a current model loaner for a couple days too.

Do you want repairs to be done at a BMW dealer or independent mechanic? In comparing 3rd party to BMW be sure to know who the 3rd party will pay for to work on it; if they'll only pay indy shop labor rates you might be on the hook for any additional labor cost if you take it to a dealer for work. Plus I'm not sure that dealers will deal with 3rd party warranty companies; you could have to front the repair bill yourself and seek reimbursement - with the risks that entails.

Post to the Ask a Dealer forum for advice on seeking lower quotes; except in certain states I believe any dealer can write the policy, so you're wise to shop around.

You have to make your own decision about the value of buying the warranty - but be VERY clear in your understanding of what is and is not covered by each option.

Hi, I have a 2010 535i x-drive.

I am in the process of comparison shopping myself right now.

I have done some initial research with a couple of area (Wash. DC) dealers and Costco.

So far, Costco provides the most reliable service although they are more expensive.

I am leaning towards Costco.

Others I've looked at are as follows:

BMW of Sterling-- Fidelity
BMW of Rockville -- Zurich
BMW extended warranty.


Ask all the companies at least the following questions:

- Are the deductibles charged per visit or per repair?

- Warranty Transferable? Fees?

- Repairs at any shop or only at BMW?

- Will wear and tear be covered? (i.e.., will they fix only when something breaks or when something is beginning to malfunction?)

- Is cash layout required for repairs?
Customer gets reimbursed, or will they pay dealer directly?
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