To Purchase the Extended Warranty, or Self Insure...

Long time browser, good to be on the boards. Haven't found a really solid answer to this question so I thought I'd bring it up - I'm sure the conversation has been had before but hell, let's do it again.

Guiselle has 47000k on the clock and she's about to run out of the 4/50k factory. She's an early model '09, 335i convertible. Nav and just about every other option. No serious issues except the high pressure fuel pump and they're replacing her main convertible top seal next week - under warranty.

Local Leith BMW wants $3200 for a 6 year (from the in-service date, so two years for me) 100,000k. I'm buying a new 4 series convertible ED in about 2.5 years so that's my timeframe.

Auto Warranty Agency out of Salisbury MD, which seems to be a pretty solid firm from my research, wants $2700 for a 5/100,000, which starts from the purchase date of the warranty.

Major differences are that Auto Warranty Agency doesn't cover the radio or the nav system, but they are $0 deductible as opposed to BMW's $50, but that's really negligible - I don't expect to be bringing her to the dealership twice a month.

Called two decent ranked independent shops in the area. Shop 1 said definitely get the warranty, the cars are expensive to fix - I'll be replacing that high pressure fuel pump two more times, it's not reliable, turbo problems, blah blah. Said most definitely get it.

Shop 2 was an older, seemingly more thoughtful fellow. Said he wouldn't do it. Said the cars are reliable, he really doesn't foresee the repair costs outweighing the warranty cost over the next couple of years at all. Said regular maintenance keeps them up pretty well and they're generally pretty reliable, no serious issues with engine, convertible top, etc.

I was leaning towards self insuring before I even called these guys...

Thoughts....?

The companies selling these plans intend to take in more money than they pay out.


The "Betting Against the House" analogy is the best. This is what happens every time you place a bet on a roulette wheel. Some people make out. Most do not. The house knows the odds and sets the payouts accordingly. Quick - what are the biggest, brightest buildings on The Strip? Obviously, the casinos. And they didn't get that way by losing money to most of the players.

Same deal with extended warranty plans. The warranty company (BMW or 3rd party) knows what they will pay out on average. They set the cost above that number so they get some profit. If it's sold through a dealer, the dealers then add on profit of their own. Guess who's paying for everyone else's profit.

Assuming that the company knows how to price the plan, on average, you will lose out. Some people will get "lucky" - their cars will suffer an unexpected failure, and the plan will benefit them. Kind of like buying life insurance - you're betting the insurance company that you're going to die before they think you will.

You need to make your own call. You have to ask yourself "Do I feel lucky?" Well, do ya?



One more instructive case:
--------------------------
Whirlpool is continually trying to sell me an extended warranty on an 11-year-old dehumidifier. "These are expensive to fix / these are expensive to replace / factory trained service / yada / yada / yada." Cost is $50 per year, or $135 if I take three years. The hook is in the fine print. On a unit that's more than 10 years old, they'll only pay up to 25% of the original cost of the unit for repairs or towards replacement if it is unrepairable. The unit originally cost $195. So, if I pay them between $50 and $135, they'll give me up to $48.75 if the unit breaks. If it doesn't break, they'll happily keep my money.


George


P.S.: Regarding replacing the fuel pump, the warranty on that is now something like 100,000 miles or more. Don't buy a plan thinking you'll save on that replacement. BMW's already covering it.

Contact danieldutton@pacificbmw.com we have special pricing for forum members

My take: I've put 240,000 miles on two BMWs over the last 11 years. Major repairs? One. I spent $2800 getting a transmission rebuild on a 97 540 with 145k on the clock. And these were cars that had no less than 60k on them when I got them.

Yes, they can be expensive to repair when something go bad. But if you're out in 2.5 years and will have something on the order of 75k on the odo, I wouldn't be concerned. Besides, the HPFP is warranted to 120k, right?

I'll add one thing to this.... Both parties (customer and warranty company) can be cash positive with a warranty. The thing to consider is how much would estimated repairs cost you. The warranty companies (either BMW or a 3rd party) pay significantly less than a consumer would for both parts and labor. The gap is going to be noteworthy between these two figures. From what i read, 335s have a significant risk for repair work, much more so than say a 328. It is all about how much risk you are willing to take.

BTW the guys at Pacific BMW will beat that third party price of $2700 for 6/100 and that is for the BMW warranty.

Originally Posted by Greg@Pacific BMW

Contact danieldutton@pacificbmw.com we have special pricing for forum members

I actually did this myself. In the end, I decided to pass on the deal and self-insure. But, I found the prices these guys offer to be very competitive. Also, as somebody who bought my car at Pacific BMW, I can tell you that they are pleasure to do business with.

Just remember, if you self-insure too much, you can go blind.

I got an extended warranty for my 07 335i HTC when I bought my car thru car max for 1100 for 6 years 75,000 miles with 50 dollar deductible and if I take it to car max there is no deduct

so keep shopping, but I figured one repair and I have paid for the EWP. but might be like health insurance you make one claim and they drop you

Hondo

I just added warranty to my 09 335i convertible with 44k miles. Mine was through Fidelity, exclusionary coverage, pushes me out 6 years 72k miles w/$250 ded. Fidelity has a price tier jump at ~45k miles, so you may have missed that boat.

Originally Posted by Greg@Pacific BMW

Contact danieldutton@pacificbmw.com we have special pricing for forum members

+1 to these guys. They gave me the best prices for bmw extended warranty when I was shopping.

Originally Posted by SirJohnRaleigh

Guiselle has 47000k on the clock and she's about to run out of the 4/50k factory. She's an early model '09, 335i convertible. Nav and just about every other option. No serious issues except the high pressure fuel pump and they're replacing her main convertible top seal next week - under warranty.

I say you've done quite well given you have 47 million miles on the car

Originally Posted by SirJohnRaleigh

Long time browser, good to be on the boards. Haven't found a really solid answer to this question so I thought I'd bring it up - I'm sure the conversation has been had before but hell, let's do it again.

Guiselle has 47000k on the clock and she's about to run out of the 4/50k factory. She's an early model '09, 335i convertible. Nav and just about every other option. No serious issues except the high pressure fuel pump and they're replacing her main convertible top seal next week - under warranty.

Local Leith BMW wants $3200 for a 6 year (from the in-service date, so two years for me) 100,000k. I'm buying a new 4 series convertible ED in about 2.5 years so that's my timeframe.

Auto Warranty Agency out of Salisbury MD, which seems to be a pretty solid firm from my research, wants $2700 for a 5/100,000, which starts from the purchase date of the warranty.

Major differences are that Auto Warranty Agency doesn't cover the radio or the nav system, but they are $0 deductible as opposed to BMW's $50, but that's really negligible - I don't expect to be bringing her to the dealership twice a month.

Called two decent ranked independent shops in the area. Shop 1 said definitely get the warranty, the cars are expensive to fix - I'll be replacing that high pressure fuel pump two more times, it's not reliable, turbo problems, blah blah. Said most definitely get it.

Shop 2 was an older, seemingly more thoughtful fellow. Said he wouldn't do it. Said the cars are reliable, he really doesn't foresee the repair costs outweighing the warranty cost over the next couple of years at all. Said regular maintenance keeps them up pretty well and they're generally pretty reliable, no serious issues with engine, convertible top, etc.

I was leaning towards self insuring before I even called these guys...

Thoughts....?

Check out my links for our BMW extended warranties: Click the picture below

Honestly, start calling around for better pricing. You can get the warranty from ANY DEALERSHIP! Call the above board sponsors. $3200 is a lot (I think it costs them around $1600 to $2000, forget exactly). Take the BMW warranty over some third party company. I've been burned by them. I had one of those warranties where it said "will replace with like parts". When you read it you think "OK if i have OEM they will replace with OEM, if I have custom they will replace with custom". WHen it was time to replace the OEM transmission they said "like parts" means they will go to the junk yard and if they buy a busted transmission then that is just like the transmission in the car, so they fulfilled their duties. They would generously be willing to redo the work as many times as it took to get it right...in the mean time I would be out of a car and totally screwed each time the car wouldn't move.

Basically, go for the BMW warranty but call the board sponsors

Thanks a lot for the replies. I did get better pricing for the BMW warranty. Much appreciated. Just need to decide now.

+1 for Dan @Pacific. I bought mine with him.
The immediate month, water pump failed on me, which the invoice indicated to be something like $1200 - covered under Ext Warranty. So atleast in my case, I hope it works out to be a good deal (Not that I hope more things to fail on my E92 - touchwood) !

How much was offered to you John?

Self insure if, should something happen, you say, oh sh!t, this is gonna cost a bundle, then you begrudgingly whip out a check or a charge card (that you pay off to zero every month), and start cursing these gaddam German expensive cars.

Buy the insurance if, should something happen, you say, OMFG, what am I going to do? I need my car to get to work, and I can't come up with this amount now.

Originally Posted by Kamdog

Self insure if, should something happen, you say, oh sh!t, this is gonna cost a bundle, then you begrudgingly whip out a check or a charge card (that you pay off to zero every month), and start cursing these gaddam German expensive cars.

Buy the insurance if, should something happen, you say, OMFG, what am I going to do? I need my car to get to work, and I can't come up with this amount now.

This is wisdom

Auto companies and warranty companies sell warranties for one reason---they make a lot of money on them.
When I looked at the extended warranty it would not cover my retractable hard top. Now it does.
I carry a new water pump and aluminum TTY bolts with me just in case.
Other than that I don't foresee any issues. I have 57K miles on my 335 and have had one very minor problem glove box solenoid replaced in 2007...

Try Performance BMW tell them you have a price from Lieth & see what they can do. As said above any BMW dealer can sell you the warranty, there are a couple of dealers known on the forum that have had good prices on occasion. That being said if you have the $3K stick it in a money market account & insure yourself.

The 2004 330Ci ZHP 112,000 miles, owned since new, cost me about $1100 out of pocket on items that might have been covered.

I have considered purchasing warranties for all of my BMWs, but in the end have decided against the warranty. I am so far ahead it's not even funny. Absolutely no major repairs this far out of warranty. Considered buying a warranty for my wife's old clk550, but passed. She drove the crap out of it for 25,000 miles and we spent $0 on repairs during that time. I don't even know if we changed the oil on that pos! Having said that I have never owned a car more than 15 months out of warranty.

My father always told me, in reference to Casinos and gambling, that "the house wasn't built on winners". I believe the same applies to extended warranties.

Originally Posted by sunny5280

I say you've done quite well given you have 47 million miles on the car

I laughed out loud!

Haha, I laughed out loud at Sunny's post too. Twice actually. And to KamDog, that is excellent wisdom. Fortunately for me I didn't purchase an expensive German car until I was at a point in my career where $2k wouldn't break my monthly finances.

For me it's about return on investment - I've always maintained and taken good care of my vehicles, and they've served me well. Hell, I did all my own work for years, unfortunately I don't have the kind of available time I used to have to do those types of things. My first car was an '88 Saleen Mustang convertible, after many years of great use is was stolen in '05 with 347,000 miles on it. Yes, that's 35% of a million. Still had the original 5.0, second tranny. (I owned a company that kept me on the road constantly.)

Anyway, the point for the post was to find out what you guys thought - I've never owned a BMW so I have no idea what the real long term reliability looks like past the factory warranty stage. I think that the real answer to the question is that yes - they are reliable vehicles - particularly with proper maintenance, but that they are expensive to repair when they do break, which makes a warranty a good idea - at the right price. Average repairs seems to be to be around $1200-1500, in which a warranty in the $2300 range would pay for itself in my mind even if I only had one $1500 repair, because the peace of mind of knowing my transmission is covered if it fails is worth the additional $800 I paid for the warranty.

With that being said, my pricing is as follows:

Pacific BMW - 6 year / 100K will be $2,390 - 2 years for me.

$2,730 for the Platinum with radio and nav


Auto Warranty wants 5 years / 100,000 miles for $2,755 - Doesn't cover radio and nav. 5 years from now. No deductible.

Last question - is this about the best I'm going to get? The Leith BMW finance manager just came over from Mercedes a week ago, his price is retail $3200 for the 6/100k and he doesn't know how to find out how to get a better price. His loss, I don't care, I think Pacific can afford lower because of the economy of scale of you guys here.

Stop now because I'll only get another couple bucks, or can I get a few more hundred if I look around more?

Again, many thanks to all for your input.

Shoot me an email I will show you guys cost on this plan !!!! and give you my best price.

Originally Posted by SirJohnRaleigh

Haha, I laughed out loud at Sunny's post too. Twice actually. And to KamDog, that is excellent wisdom. Fortunately for me I didn't purchase an expensive German car until I was at a point in my career where $2k wouldn't break my monthly finances.

For me it's about return on investment - I've always maintained and taken good care of my vehicles, and they've served me well. Hell, I did all my own work for years, unfortunately I don't have the kind of available time I used to have to do those types of things. My first car was an '88 Saleen Mustang convertible, after many years of great use is was stolen in '05 with 347,000 miles on it. Yes, that's 35% of a million. Still had the original 5.0, second tranny. (I owned a company that kept me on the road constantly.)

Anyway, the point for the post was to find out what you guys thought - I've never owned a BMW so I have no idea what the real long term reliability looks like past the factory warranty stage. I think that the real answer to the question is that yes - they are reliable vehicles - particularly with proper maintenance, but that they are expensive to repair when they do break, which makes a warranty a good idea - at the right price. Average repairs seems to be to be around $1200-1500, in which a warranty in the $2300 range would pay for itself in my mind even if I only had one $1500 repair, because the peace of mind of knowing my transmission is covered if it fails is worth the additional $800 I paid for the warranty.

With that being said, my pricing is as follows:

Pacific BMW - 6 year / 100K will be $2,390 - 2 years for me.

$2,730 for the Platinum with radio and nav


Auto Warranty wants 5 years / 100,000 miles for $2,755 - Doesn't cover radio and nav. 5 years from now. No deductible.

Last question - is this about the best I'm going to get? The Leith BMW finance manager just came over from Mercedes a week ago, his price is retail $3200 for the 6/100k and he doesn't know how to find out how to get a better price. His loss, I don't care, I think Pacific can afford lower because of the economy of scale of you guys here.

Stop now because I'll only get another couple bucks, or can I get a few more hundred if I look around more?

Again, many thanks to all for your input.

Those prices seem a little high. You may be able to get a little better pricing by shopping around. You can technically get the ext warranty from any dealer and it will be honored by any dealer. Of course, we're talking about a bmw warranty and not a 3rd party warranty.

As far as your concern for ROI, let me be the first to tell you that BMW's are not reliable. They are average according to consumer reports and below average with my experience. I have a bmw ext warranty with 85k and my ext warranty has paid for itseld and then some. My car just went into limp mode today because the water pump died. I'm out $60 for a flat bed tow and $50 for a deductible.

BMW's are fun cars to drive, they look good, they have a desired status but when it comes to being reliable, they are not. Know that and accept it and you'll be good. If you buy the car thinking it's reliable, you're going to be in for a surprise.

I had this same issue, I bought a used 2008 335i and decided to purchase an Extended warranty 3 year/ 36,000 warranty as my vehicle was right at the BMW 4/50,000 end. I recently took my car into the shop and had the warranty company play "word games" and play the "semantics" card with me. BMW out the goodness of their heart a.k.a. 8 year /120,000 emissions warranty actually covered pretty much everything from the HPFP, 2 brand new turbos, 6 rack of injectors, O2 sensor. I tried to get the warranty company to pay out for the engine low fuel pressure sensor and for the transmission sealing sleeve and they only ended up paying for the Transmission sealing sleeve. One of my biggest issues was that the warranty company would only cover $85 labor/hr and BMW charges way more than that ($145/hr) So before you purchase, if you haven't already make sure you get into the details with your warranty company. They are going to hate it and try and walk around the issue so they avoid paying out, but pester them as much as you can because after all, you will be paying them to do their damn job.