Your thoughts about not buying an extended warranty.

[axg1040]

I am in the process of looking to buy an X5 in the next 30-60days.
I have spent the better part of the last few days reading all the posts about extended warranties.
So I read in the April Consumer Reports Auto edition to take what you would spend on a ext. warranty and put it into a money market or mutual fund. When you have a problem you can draw from that account.

Lets forget about the current state of the investment market for the sake of this post. The article also only recommends this if you buy a "reliable" vehicle. I know there are very strong feelings about Consumer Reports and I am just curious about what people thought about this idea.

Is there anybody out there that has well exceeded the cost of their extended warranty in repairs that were covered?
Since I am looking at both used 3.0's and 4.4's I would like to hear from any owners of these.

My plan is to buy an 04 or 05 X5 with less than 40k miles and keep it for 4-5 years. I only put about 9,000 miles on per year on my vehicles. Short commute to work.

Any feedback would be great.
Thanks.

[cat97628]

I just bought my X5 3.0 will 43000 miles on it about 3 weeks ago. I also just bought a 4 year 100000 mile warranty through warranty direct for 3000 this week. I have not had to use it yet but I could see where the 3k I spend could quickly be realized through warranty repairs. The systems that are in the E53 has can be very complex and expensive to repair. I had bought my 02' E46 325i with 8 months left on the factory warranty and i let it lapse because i felt that car was still just a very basic auto. I could be wrong and the e46 could bite me in the butt but so far it has been a very strong car 35000 miles later. An extended warranty is not for every car on the road but I do think it is a good choice for the E53.

[StanF18]

Originally Posted by cat97628

I just bought my X5 3.0 will 43000 miles on it about 3 weeks ago. I also just bought a 4 year 100000 mile warranty through warranty direct for 3000 this week. I have not had to use it yet but I could see where the 3k I spend could quickly be realized through warranty repairs. The systems that are in the E53 has can be very complex and expensive to repair. I had bought my 02' E46 325i with 8 months left on the factory warranty and i let it lapse because i felt that car was still just a very basic auto. I could be wrong and the e46 could bite me in the butt but so far it has been a very strong car 35000 miles later. An extended warranty is not for every car on the road but I do think it is a good choice for the E53.

You could get away with not having the extended warranty on an Accord or Camry, but you're tempting fate if you don't get it for even a relatively recent X5 (E53). I definitely plan to extend it before I get to 50K miles on my 2006 4.4i. Based on the what I've been reading on this forum, the warranty IS expensive, but the repairs really add up quick and most people do not regret getting the extended warranty. As for CR, I do find them to be a very useful source, even if they oversimplify some of their reviews. Thanks to their reliability ratings I would not touch a Range Rover or VW Toareg with a 10 ft pole!

[mistert396]

I have a 2001 3.0 with 110k on the clock. While it was under my extended warranty I had to have the head replaced at 55k and then the transmission replaced at 76k. For me the warranty saved thousands. I always purchase and extended warranty on my vehicles strictly because you never know what could happen. It also makes me feel a lot better to know that I'm covered.

[BGM]

I have an '01 with 78K mile on it that I have had since day 1--the only meltdowns I have had has been one window regulator and a couple of bushings in the suspension. Everything else has been normal wear and tear items like belts, CV boots. I had an extended warranty but decided to cancel it last month due to a "Weasel Clause" in it.

[motordavid]

axg,
That is a fair question you raise...while I opted for an ext. warranty,
(from WD, back when their coverage rates were very competitive and hadn't cranked up),
I am facing the same question again, as the oem ext warr. on my Vette expires this spring.
Not the same cars, but the same issue: if something goes kaboing, it can cost a grand or more,
in a heartbeat.

The "save it/bank the ext warranty" cost isn't new, but I suspect not many are that disciplined
or rigorous to do so. That's ok, if one is willing to skip the high $2G to high $3G cost entry fee
for an ext warranty, and just live with the repair costs as they come along, and it works for an
individual, then right on.

Knock on wood, but I seriously doubt I will "consume" my ext warr. cost before it runs out; some
here, anecdotaly, have.

In the end, I suspect that an Ext Warr. offers a safety net/comfort blanket/peace of mind, that
some owners prefer. That's my 2Cts, but a very fair wonderment. Wish I "knew" the best answer
as I looked into the future.
BR,mD

[Quicksilver]

So let's see "April Consumer Reports Auto edition said to take what you would spend on a ext. warranty and put it into a money market or mutual fund. When you have a problem you can draw from that account."

Let's dangle that logic and take a good look at the questions it brings up.

So we are going put our money in the account in the hopes that it will be there long enough that we will have earned enough money beyond our principal investment to pay for repairs? How much are money market or mutual funds earning these days?

How soon is our BMW is going to be in need of repairs? (Remember it's a BMW)

If the information on this site regarding repair frequency for BMW's and the need for extended warranties is to be believed it would seem that a warranty is good insurance.

Perhaps some have done it but i don't recall one member here ever setting up a money market or mutual fund to pay for repairs. The reason for that seem to be that the repairs over the course of a short time can meet or exceed the initial cost of the warranty.

I'm at that crossroad myself and my only option in california is BMW's warranty. If warranty direct was an option i would give them a look but as it is i have to decide if i want to drop $5000.00. That decision will be based on my desire to keep the X.

EDIT: I almost forgot. You could buy my 05. It has 41K. Make me an offer i can't refuse..............

[E61Silver]

Another option is to lease a new BMW.

When you consider the full cost of ownership, the lease cost is not that much more and you get to drive new.

[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.

[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.