Your thoughts about not buying an extended warranty.

[FSETH]

Originally Posted by acitydweller

one should factor in where the used car originally came from. If you are buying from a dealer or used car lot, the vehicle care history is sketchy and you can only rely on the bmw service history on record under the VIN.

If you purchase the car from a friend or someone you know, its more likely that you'll get something that you can rely on rather than someone else's problems.

CPO and extended warranty do not cover everything so be forewarned. I have seen the dealer refuse warranty work on a faulty NAV system for a CPO vehicle with 100,000 mile coverage.

An ideal situation would be to buy an X from someone that you know and/or someone that you know took care of it, but even that can't guarantee that the trans won't go out, the waterpump won't fail, the fuel pump won't stop, or the valve cover gaskets won't leak, etc.

I do think it is important to know how much you plan on driving the car. The warranty will be more likely to pay for itself if you can guarantee that you are going to use up the mileage allowance and not just the time allowance.

[amaretto37]

Here's my thought on this, I wouldn't buy the extended warranty, if you look at it from the insurance company point of view, there's a lot more X5 out there that does not require repair costing more than the amount required to get the extended warranty, so based on this, I would just keep the money and hope that I'm one of those that will not require extensive repair in the future..., but this is like gambling, but the odds are that you'll save more if you just keep the money instead of buying the extended warranty. Otherwise, the insurance company would stop insuring X5's if there were putting more money out than money comming in. So peace of mind cost money. Me, I'd rather keep the money than bet that my X5 would break down in the future.

[axg1040]

Originally Posted by FSETH

I bought an 02 4.4 with 65k 14 months ago with an extended warranty. I have had over $4,500 in warranty repairs in that short time. My warranty was from Carmax (their Maxcare warranty which is honored by any BMW dealer) for $1,800 and some change, so my warranty has paid for itself more than twice. In my situtaion an $1,800, 3 year or 36,000 warranty on an e53 was a no-brainer. Especially becasue I could take the car to BMW dealers for repairs.

I agree that it would be hard for the typical buyer to follow through with setting up a designated account for repairs. Either get the warranty, or plan on shelling out a lot of money for repairs at some point.

Great choice on the X5. They are amazing to drive, but repairs are costly.

Were you able to negotiate the price of the extended warranty at Carmax?

I also found out that the Carmax Maxcare warranty will cover bushings and CV boots. The CPO and the one aftermarket warranty my local BMW dealer sells (JM&A/Fidelity) do not cover these and treat them as wear and tear.

[JCL]

The first problem with an extended warranty is the name. It simply isn't a warranty, it is an insurance policy. You have to think of it as an insurance policy.

The first analysis is at the macro level. On average, across all X5 owners, you will lose when you buy an extended warranty. That is because the insurance company is making a profit on it. They know the failure rates, and the repair costs, for every make/model/year they insure. They add a profit to that, and and sell you a policy. So, on average, it is a losing proposition.

The second analysis is at the micro level, ie your personal situation. You should only ever buy insurance if you can't afford to pay the likely cost of a failure or loss. That applies to this policy, to home insurance, health insurance, etc. If you can pay for it either out of your pocket, or out of your money market investment set aside for that purpose, then don't buy one. Trouble is, most people can't, and that is what puts WD and others in the business.

You can hedge your bets by knowing the history of the vehicle, or you can close your eyes and wish for good fortune, but it comes down to a simple calculation: can you pay for a transmission, for example. Repairs will likely be under $10,000. If those sorts of numbers would stop you buying food that month (extreme example here) then you need an insurance policy. If you can pay for several thousand dollars of unplanned repairs, and you take reasonable care of your vehicle, as well as knowing the history of it, then take a chance. Your call. Only you can answer it.

Good luck.

Jeff

[axg1040]

Thank you all for the information thus far. It has been very helpful.

[Batm4n]

I went down the extended warranty path and I don't regret it.
My 03 X5 experienced issues few months after I came out of warranty. (Murphy's Law)

Although it turned out for the better, I did experience a suspension failure on one side which without insurance would have cost well above 1000+ to fix and a CV boot failure which was a chunk of change itself.

A key thing to note is that the extended warranty will provide for repairs that resolve the issue but not necessarily what is in your best interest.

Case in point, CV boot was ripped and the warranty paid for a boot replacement. Not a replacement CV.

Another example is electrical resets are not covered under extended warranty in most cases. (e.g Inactive suspension requires a fault reset)

So the warranty does come in handy since repairs are costly and it seems like there are a lot of wear parts in a BMW which frequently need swapping (e.g Window regulators, Control Arms). Think of the warranty as a Flexible Health Spending account or a Transit Account minus the pre-tax benefits.

But read the fine print on what they will and will not covered. The extended warranty is never like the factory warranty and most dealers have some sort of disdain for dealing with extended warranties from my experience.

[Islands52]

Call me a gambler but I am playing the odds with my 03' 4.4i. I am a big DIYer and I find I can do even moderately difficult repairs using the internet, friends, and a Bentley manual. I also decided taht warranty companies are doing their homework. They are not selling $3K warranties to NOT make money on them...if they were not profiting overall, they would not sell them to us! So they must feel $3K, for the most part, is unlikely. Maybe that is skewed logic, and yes its a gamble, but I am going without.

My two MCoupes have not been to a repair shop since their warranties expired and I have done all repairs on my own...so knock on wood, I am hoping the X is just as good.

[FSETH]

Originally Posted by axg1040

Were you able to negotiate the price of the extended warranty at Carmax?

I also found out that the Carmax Maxcare warranty will cover bushings and CV boots. The CPO and the one aftermarket warranty my local BMW dealer sells (JM&A/Fidelity) do not cover these and treat them as wear and tear.

No, I wasn't able to negotiate. CarMax's policy is pretty much "no haggle" on everything. At $1,800 for 3 years or 36,000 miles, negotiating really wasn't that big of a deal. I don't know where I could have found a better deal.

The MaxCare warranty does appear to be fairly thorough. They fixed the mechanical issues you would expect such as the alternator, valley pan gasket, water pump, fuel pump, valve cover gaskets and control arms. What surprised me though is that they fixed a few smaller items I didn't think they would touch like the mechanism that extends the lower part of the sport seat under your leg, which cost over $200.

I agree with everyone here who says the warranty is simply insurance. I also agree that the warranty companies make money on this more times than not. If they didn't they wouldn't offer them. In my particular situation, an 02 4.4 with 65,000, a $1,800 warranty just made financial sense to me. Trust me, repairs on these things can add up very quickly and a catastrophic failure like a trans or an oil seperator issue would have put me into credit card debt big time. The X5 is the nicest and most complicated car I have ever owned, so I was a little intimidated about being able to do these costly repairs myself. Plus, I wanted to enjoy the car for a few worry-free years without having trans issues, etc looming over my head.

Like I said earlier. I have already gone through $4,000 to $5,000 in warranty repairs in less than a year and a half of ownership. If I didn't have a warranty, the X would have been history months ago.

This is just a decision you are going to have to make. It is just insurance. Unfortunately, there is no way to find out if you are making the right decision now. You just have to jump in with both feet and roll with it. Your particular vehicle could be trouble free, or you can lose a trans on your way home from purchasing it.

My personal situation with the warranty has been the best automotive decision I have made, next to buying the X in the first place.

most dealers have some sort of disdain for dealing with extended warranties from my experience.

I have to disagree with this Batm4n. I actually feel like my particular BMW dealer looks over the car for anyhting they can fix because the warranty is not with BMW and the money for repairs is coming out of another corporations pocket. They have found another item in need of repiar many times that my X has been in for service. Also, like I said before I drop the car off as if the warranty is from BMW and my service advisor sets up everyhting with Max Care. It may not be like this for everyone, but my situation has been gravy.

[axg1040]

Have you ever had Carmax fix any of the issues?
The dealer here said they would honor any extended warranty as long as they paid by credit card. Any idea how the Maxcare Warranty pays your dealer?
Thanks again.

[thmotorsports]

Ok,

For all of you with extended warranties, I did more research on this than anyone else. On my old 03 325ci I bought, i got UUC or Zurich warranty through a BMW dealership. The warranty said it wouldnt cover many repairs such as radio electrical - it did - hence it was the best. As well, if you call and say your from E46fanatics.com and used to deal with Trudy, you get 20% off.

Contact currently: Brian in Finance
Discount 20%: Mention e46fanatics.com membership
Place: Sun Motorcars BMW
Contact: 717-697-2300

Eddie