I have seen a number of threads recently regarding folks purchasing (or thinking of purchasing) aftermarket warranties for used BMW's they are going to purchase.

I was considering the same thing with the 1998 528i...but then decided against it.

Why you may ask:

1. Most (if not all) of the after market warranties only cover the drivetrain...which usually means any part that is in contact with lubricants...such as the motor oil or tranny fluid, and maybe the differential.

Honestly if you are not redlining your engine all of the time, and changing your oil regularly, internal tranny or engine parts rarely fail. When was the last time you heard of someone breaking a camshaft or crankshaft.

2. The items on our Bimmer's that usually fail...cooling system, electronics, sensors, clutches, etc...are not covered by after market warranties.


One of the BIG downsides of the aftermarket warranties...is that you MUST perform all scheduled periodic maintenance to keep the warranty in effect. This means that you MUST take your car to a repair shop (BMW or otherwise) to have your oil changed, have the inspection 1 & inspection 2 performed etc.

This is because you NEED to have receipts to PROVE to the warranty company that you have been keeping up with the periodic maintenance...otherwise when you try to make a warranty claim they may refuse to pay-off!

In my case...I am a Do-It-Yourselfer...and I don't want to pay BIG BUCKS for someone else to change my oil, or pay the BMW dealer $600-$800 bucks to do the Inspection 1 or Inspection 2 service...which is basically a glorified visual inspection and oil change.

In the end...most of these warranties cost around $1500...but in a relatively short time you will exceed this amount in the required periodic maintenance costs required by the warranty. And more than likely, you will never make a warranty claim for something that the warranty will actually cover (because internal engine or tranny parts rarely fail).

Just my 2 cents...what do others think?

Thanks,

- Nick

p.s. Sorry for the long post.

it's as useful as a football bat.. don't bother.

it's as useful as a football bat.. don't bother.

Well...that was exactly my thought...but then...MAYBE there was something I was forgetting about...that someone else might come up with.

Thanks,

- Nick

Well...that was exactly my thought...but then...MAYBE there was something I was forgetting about...that someone else might come up with.

Thanks,

- Nick
the money you spend on a warranty is as good as placing bets on the roulette table... on numbers. if you hit it right and got the right part broken that they'll cover, it's a win! but what are the chances with all the "exceptions" and the "well, that's a wear and tear part" or "it was abused and we don't cover that" excuses they have?

rather save the money and do the work myself.

the money you spend on a warranty is as good as placing bets on the roulette table... on numbers. if you hit it right and got the right part broken that they'll cover, it's a win! but what are the chances with all the "exceptions" and the "well, that's a wear and tear part" or "it was abused and we don't cover that" excuses they have?

rather save the money and do the work myself.

Exactly my thoughts as well. The whole warranty business is about the statistics.

The problem is...buyers of used cars think that these aftermarket warranties are a big safety net...when they really aren't!

Most of the warranties only cover internal engine & tranny parts...and these are the parts that rarely break. Yes they get worn...but they don't usually break.

Yeah...occasionally something breaks, that the warranty covers...but that is probably something like 1/1000, 1/10000, or more.

One additional detail. Some warranties will cover more stuff. But the warranty costs more...and the vehicle needs to has much lower mileage, and newer model years.

But of course...if the car is a newer model year & lower mileage...it is also less likely that something will break or crap-out.

- Nick

Well stated Nick. As much as we know the things that have a tendency to break on our cars, the companies offering the warranties know more, have access to statistical data, and spend many man hours literally calculating the best warranty to offer that will net them the least amount of repairs. I don't knock 'em for it, they're in business and that's what they do. However, they cater to the crowd that has less understanding of probability than they do, or none at all.

A common college-level statistics course often includes a set of optimization/recall problems where the goal is for a manufacturer to maximize profits by offering a warranty lasting a length of time required so that only X% of sold units are repaired or replaced, whether X=5% or X=27% is up to the manufacturer. You can be damn sure that the underwriters offering the warranties are very familiar with these types of problems and purposely structure their warranties to cover items that have a small probability of failure, while excluding the items that have a high rate of failure. And these items that have a low rate of failure? They're very important parts of the car and receive much more engineering attention than ancillary systems. What aftermarket customers fail to realize is that when a warranty company says "Hey, we'll cover the most important and vital parts of your car, the engine, because we care," BMW has already put a lot of engineering effort into decreasing the risk of catastrophic - and very expensive - failure. The warranty companies end up appearing more benevolent than they are.

Stay away indeed.

Yeah...the main reason why I started this thread...was a I saw a few folks posting on the boards mentioning that they have just bought or are thinking about buying a used BMW...and they were mentioning that they were going to purchase an aftermarket warranty...thinking that it would be some sort of safety net.

The aftermarket warranties are really not the safety net they may seem to be!

So hopefully the folks thinking about buying an aftermarket warranty will read this thread...before making their final decision.

- Nick

Warranties may not work out well on average, but if you end up with a car that has more repairs then average you could be very glad you had a warranty.

I don't know what a warranty would have cost on my 99 528, but it needed $7k+ in drivetrain repairs last year alone...not to mention plenty of other things that went wrong. Any warranty would have saved my butt if I had one.

It's like insurance. On average it won't give you as much as what you pay the company, but if you're one of the few people who's car is stolen, house burns down, or dies early, it'll be a very good thing that you bought the insurance.

It may be as useful as a football bat to many, but if your car turns out to be a dud, it could be the most valuable part of your car.

I don't know what a warranty would have cost on my 99 528, but it needed $7k+ in drivetrain repairs last year alone...not to mention plenty of other things that went wrong. Any warranty would have saved my butt if I had one.



What sort of drivetrain repairs did you need to have done that cost $7000 bucks?

Thanks,

- Nick

The warranty I'm getting for my 540i has a deductable, but it also covers electrical, cooling, A/C and suspension. My friend has the same one on his 323Ci and they didn't give him any problems when he needed his water pump replaced.

-Al.

What sort of drivetrain repairs did you need to have done that cost $7000 bucks?

Thanks,

- Nick
auto tranny accounts for most of that. There were other engine things, such as belt tensioner that add on to the cost.

also lost ABS module and some other things that would have been covered under a GOOD warranty, even if it wouldn't be covered by a drivetrain warranty.

The bottom line is, I saw nearly $10k in total repair needs, in a matter of months. I live well below my means, but the average guy driving a car worth $10k-$12k usually isn't able/willing to make those kinds of repairs if they come up, so IMO, a warranty should be a must for most of them incase they end up in the position I was in.

BTW: When I traded it in, I went with CPO + Zero Maint on my 540i. Yesterday the 540i was in the shop for brakes. That one visit alone made up the cost of the Zero Maint package.:cool

I too purchased an extended warranty, but only after a ton of research.

My first move was to purchase a CPO car. While still under CPO, I was able to find 3 or 4 companies that would write a bumper to bumper plan. I did the best I could to cross reference what was covered with what is complained about more than anything on this forum. I'm covered for pixel failure, control arms, tension struts, sway bar links, transmision, and AC, as well as complete electrical. Most of the above list has gone with the exception of the transmission and AC.

So after 13 months of ownership, I survived my CPO time with virtually no issues, then in the first 5 months of no CPO, but aftermarket coverage, I've nearly paid for the warranty. I do most of my own work and have never been asked for a reciept.

That said, I completely agree with the convesation on averages, but damn, when you look at the cost of fixing these damn cars that we all love, I went for it.

Aaron

it's as useful as a football bat.. don't bother.


:lol Nicely said!!!

I think it depends on the owner. If you a DIY type, who likes to do everything he can on the car. Then, when it exceeds your ability (or your time available) you take it to a reliable independent repair shop, (that's a lot cheaper than a dealer). DO NOT BUY A WARRANTY.

If you have enough money to pay for any repairs you may need, you can self-insure. DO NOT BUY A WARRANTY.

But if you are a "take-it-to the dealer" kind of person, who worries about what it might cost to have your car fixed. BUY A WARRANTY.

Warranty companies are in business because they make money. They know the odds are on their side. The majority of the time, the warranty costs far more than they pay out. That is a fact. If it were not so, they would be out of business. But, if you need that piece of mind, go for it.

Remember...the warranty question all depends on what sort of warranty you are interested in...and can get!

In my case I purchased a 1998 528 with 53,000 miles. In order to qualify for a "bumper to bumper" warranty...the companies I looked at required that the car be a 2000 model year or newer, and have less than something like 60,000.

My car qualified based on miles...but not on model year. So the only warranty I could get was the drive-train warranty...and this warranty is the one that I feel is not worth the money...since the drivetrain components (parts touched by engine oil, tranny fluid, or differential fluid) rarely break.

If your car qualifies for a "bumper to bumper" warranty...and the cost of the warranty is not prohibitive...then this sort of warranty MAY be worth it.

I am mostly against the drive-train warranty.

- Nick

Nick -

You are so right. I should have been more clear. My car as a 2000 with just under 60k on it - still under CPO, so I got a really good deal on extending the bumper to bumper coverage.

AAron

Nick -

You are so right. I should have been more clear. My car as a 2000 with just under 60k on it - still under CPO, so I got a really good deal on extending the bumper to bumper coverage.

AAron

AAron,

Congrats to you! According to the warranty sites I was looking at...your car just "squeked" in under their "bumper to bumper" warranty rules.

- Nick

Aaron, my friend, you did a very good job. I remember reading some of your old posts about warranties before this one popped up, and you made a smart move, especially when/if the warranty pays off.

I just purchased an after market warranty...
I am not a DIY'er yet.... I am reluctant on these cars because of they are extremely sensitve and extremely costly!!!
I am planning to do my own maintenance and some suspension work myself...
I am not a complete idiot.... I can change the oil...
I am used to do cheap tune-ups on old Chevy's and Toyota's
Bimmers move to a whole new realm for me, as far as product and price...
The warranty I bought covers most everything... (The list is too long to name everything)...
I bought my car off someone else's lease as a CPO...
So, as soon as the CPO ran out, I immediately looked for another warranty, mostly because my car is around 75k miles, which is when the auto transmission starts to fail... I am simply covering my ass by buying a warranty that covers ALL electrical, drivetrain, and transmission (to name a few)...
"AAZEVEDO" - I would really like to know what warranty you went with...???
The problem with extended warranties is there are a lot of them, and they are like vultures.... They are willing to lie and do whatever it takes to make the sale... They are a lot like car dealers...
I have some extensive research and info if anyone wants to know more and possibly where to go....
Thanks,
Jason
work: Jharlan@khma.com
home: Jasonharlan@hawaii.rr.com

Warranty companies are in business because they make money. They know the odds are on their side. The majority of the time, the warranty costs far more than they pay out. That is a fact. If it were not so, they would be out of business. But, if you need that piece of mind, go for it.
Yes, like any insurance company, the odds are in their favor. On average they will come out ahead. But their averages mean pretty much nothing to you because you only have 1 car warranted by them. If you're the 1 in 100000 that has a problem, it doesn't matter to you that the company was profitable since the other 99999 cars with that company were trouble free. All you care is that you're not the one having to pay for the bent rod or blown out transmission.

All these engineer-types think they can outsmart the insurance company by self-insuring. But mathmatically it rarely makes sense because they're unable to spread out the risk the way a large company can. The individual may get lucky, but that doesn't make it a sound formula.

It all comes down to- do you want to make an inexpensive mistake of buying a warranty that you didn't use? or do you want to make a very expensive mistake of not buying a warranty and then having something major go wrong.

Yes, like any insurance company, the odds are in their favor. On average they will come out ahead. But their averages mean pretty much nothing to you because you only have 1 car warranted by them. If you're the 1 in 100000 that has a problem, it doesn't matter to you that the company was profitable since the other 99999 cars with that company were trouble free. All you care is that you're not the one having to pay for the bent rod or blown out transmission.

All these engineer-types think they can outsmart the insurance company by self-insuring. But mathmatically it rarely makes sense because they're unable to spread out the risk the way a large company can. The individual may get lucky, but that doesn't make it a sound formula.

It all comes down to- do you want to make an inexpensive mistake of buying a warranty that you didn't use? or do you want to make a very expensive mistake of not buying a warranty and then having something major go wrong.

+1, amen brother!