BMW Extended Warranty vs 3rd party Warranty

[lhero]

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

[brian5]

Welcome!

The first thing that you should have done was a search for "extended warranty". You would have found this thread

The most recent pricing was posted by me. I need to note that I did not shop around as I was running out of time to purchase it...

[Denalio]

Originally Posted by lhero

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

With 3rd party warranties READ THE FINE PRINT. Most if not all use words like Replacement Parts may be new, LKQ, re-manufactured, at their option. LKQ is Like Kind & Quality...USED or substandard, non-BMW, rebranded. Just because a part "meets original manufacturer spec" does not mean it is equal.They will pay for REASONABLE costs due to Mechanical breakdown of parts listed. Find out what these terms mean from the issuer in writing. READ the exclusions carefully and the covered parts. These 3rd party warranties are usually underwritten by insurance companies. I have had nothing but problems and issues with them when it came to major repairs. They will always try to either not pay on a technicality or attempt to use non-BMW parts. They will make you pull your hair out when they want to send an adjuster or an inspector to the shop to look over the claim and want proof WHY it failed. Make a friend at your BMW dealer and stick with the BMW warranty at least they will use BMW parts and help you out.

[ard]

Originally Posted by Denalio

With 3rd party warranties READ THE FINE PRINT. Most if not all use words like Replacement Parts may be new, LKQ, re-manufactured, at their option. LKQ is Like Kind & Quality...USED or substandard, non-BMW, rebranded. Just because a part "meets original manufacturer spec" does not mean it is equal.They will pay for REASONABLE costs due to Mechanical breakdown of parts listed. Find out what these terms mean from the issuer in writing. READ the exclusions carefully and the covered parts. These 3rd party warranties are usually underwritten by insurance companies. I have had nothing but problems and issues with them when it came to major repairs. They will always try to either not pay on a technicality or attempt to use non-BMW parts. They will make you pull your hair out when they want to send an adjuster or an inspector to the shop to look over the claim and want proof WHY it failed. Make a friend at your BMW dealer and stick with the BMW warranty at least they will use BMW parts and help you out.

+1

Most people do not understand contract language- most warranties have huge loopholes... even the simple 'we do not cover wear and tear' will allow them to simply decline EVERYTHING. They dont, but it really becomes a crap shoot especially with a major failure. Essentially these companies will pay small stuff, deny big stuff, and manage their exposure by squeezing claimants as time goes on. It is for this reason that you can get people saying "they are great" and others, with the same plan, getting screwed.

With a BMW warranty you will not get these games...there is one process, pretty uniform in how they apply the rules. The dealer handles it with BMWNA....(and as mentioned above, be nice and the dealer can help you out based on how he writes it up)

Also, people tend to compare the STATED coverages, as if these are absolutes: "oh one covers bumper to bumper"...who cares if they never actually honor claims? Again, read the POLICY not the glossy tri-fold brochure.

[iceman2002benz]

hack yeah, I had a 3rd party warranty with my Tundra and when I took it in for repair, they ONLY approved a used part replacement from a JUNK yard.......WTH?

so read and understand all their terms before buying these 3rd party warranties.

[pokemon]

I have my extended warranty with BMW, works out very good. Forget about the third party insurance provider.

[Penguin]

+1 on avoiding 3rd party warranties. I'm not saying there aren't any good ones out there, but it's more of a throw of the dice as compared to manufacturer-backed warranties.

As Edmunds says:

"
It's important to distinguish among three types of extended warranties:

• Manufacturer-backed — these warranties, which are valid nationwide, will be honored by the parent company or the federal government, as noted above.
• Dealership-backed — valid only at the dealership where you bought it, so if the dealer goes out of business, you're out of luck.
• Independent (a.k.a. aftermarket) — a third-party warranty company underwrites your warranty, but these companies can — and often do — go out of business.

Sometimes, dealerships sell their own dealership warranty or an aftermarket warranty because they generate more profit than on manufacturer-backed ones. If a dealer sold you a warranty from a third-party company that has gone out of business, you may be able to appeal to the dealership — assuming it's still in business as well. Hopefully, the dealer will try to make good on the contract or offer a significant discount on a replacement warranty."

[rh71]

I have Warranty Direct (won't go out of business) and used them once to claim so far ($1200 job). The caveats are:

- they don't cover diagnostic fees
- they only approve whatever "the book" says a job should cost
- they don't cover reprogramming

Is that different from BMW plans?

The claim went ok for me (no deductible). The dealer (yes I brought it to a dealer because I didn't trust an indy with the "mechatronic sleeve") rolled the diag cost into the job somehow so I ended up paying $0. Normally I wouldn't go to the dealer anymore since they are more focused on making as much money as possible from these warranty companies - I got lucky that time. My point is, if you must go to the dealer, stick with the BMW plans since they are less likely to try and pull a fast one (opinion).

[ard]

^^ Good info from Edmunds.

There are a few other flavors... there are some warranties backed by large dealership groups- Hendricks comes to mind as one- which seem to have an OK record. If they screw up in a public way, it could have a large impact on their overall sales and public image. (In fact this is what makes Mfg-backed plans 'safer'...the business risk if they screw you.) Hendricks owns many, many dealerships as I recall.

There are also RRGs or "Risk Retention Groups" where the plan is backed by the RRG, and then this s sub-insured by an insurance policy. These can be very fly-by-night, just cobbled together to rake in premiums for a few years- skim the profit off the top- then work hard to deny every single claim that comes in. Essentially a shell company that falls apart leaving you with little to go after, or trying to file claims on an underlying insurance policy. They prominently display the insurers name, and many folks take that as a sign of financial backing.

I spent a lot of time researching these plans, and came to the recognition that you cannot 'research your way to safety'...the biggest component is "Is the seller/backer of this policy going to be damaged if it fails to pay claims and/or the plan goes bankrupt?" If the answer is 'they dont care', then it will be cheap, and it will be useless.

A

[pokemon]

I was told the warranty will work at any BMW dealer in NA. I only have to pay the deductible and the dealer will take care of the rest. Reprogramming is covered if it is part of the repairs.