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      09-06-2019, 02:45 PM   #1
Midina
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BMW extended warranty

Hi all,

Model has been decided (540i), colors as well (Med blue with Nappa Ivory) and one more thing is there to decide. 3 years warranty is included in the negotiated price. There are two packages that I can upgrade, 5 years/120k km warranty and 5years/80k km service and 8 years/200k km warranty and 8years/160k km service. Each package costs cca 3k USD (2.7k Euro). To have 8 years service/warranty I would need to add 6k USD to the original price

Is this too much to pay or it makes sense to have it as it will give me piece it mind and increase resale value as well?

Any thoughts?
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      09-06-2019, 03:13 PM   #2
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It's a gamble whichever way you go.
Is it possible to buy a warranty in 3 years rather than now?
Thoughts are if the car is troublefree then perhaps gamble to not get one. If the car has issues over the 3 years then it might be Worthing buying a warranty at that point- ir get rid of car.

Or you could simply not buy a warranty and effects self insure yourself

No right answer here obviously it depends upon your attitude to risk.

Personally I don't buy any extended warranty based upon my previous 2 BMW's being fine .

Whilst I have probably not answered your question , maybe it given you something to think over.
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      09-06-2019, 03:17 PM   #3
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I am purchasing my first BMW (it is on order) so I can't speak from a historical perspective (if that matters anyway since each car is somewhat unique). I am hoping that the car proves to be as reliable as my '14 Mercedes C300 where buying the extended warranty wasn't all that useful (car is super reliable and hasn't had any major issues). I can only speak to what my plan is here with the BMW.

From what I can see, there isn't really any penalty to buying the warranty after purchase (so long as your factory warranty hasn't expired) and I can't confirm that BMW extended warranties are fully refundable like Mercedes is (up until you enter the extended warranty phase). As a result, I don't see any reason to purchase the extended warranty immediately and can base some of my decision on having driven the car for a couple of years first.

I was quoted $5K for 3y/100K mile "Platinum" extended which is a fair bit. On my C300 I paid $2500 or so for 3 years/unlimited miles. I felt $2500 would be easier to hit in repair costs than I do about hitting $5K in a short period. So I'm going to sort of "see how it goes".

I'd recommend the same...
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      09-06-2019, 03:20 PM   #4
Midina
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AP

Tnx a lot. You have given me something to think over. Will have to do calculate the amount I would spend on servicing car and then see whether the rest of the money is worth gambling with. Never owed BMW before, but I am sure it is not cheap if you need to replace some major part.
Yes, it can be extended anytime during the fit 3 years so it might be a good idea to wait and see.

Tnx once again.
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      09-06-2019, 08:13 PM   #5
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Quote:
Originally Posted by Midina View Post
AP

Tnx a lot. You have given me something to think over. Will have to do calculate the amount I would spend on servicing car and then see whether the rest of the money is worth gambling with. Never owed BMW before, but I am sure it is not cheap if you need to replace some major part.
Yes, it can be extended anytime during the fit 3 years so it might be a good idea to wait and see.

Tnx once again.
Quote:
Originally Posted by Midina View Post
AP

Tnx a lot. You have given me something to think over. Will have to do calculate the amount I would spend on servicing car and then see whether the rest of the money is worth gambling with. Never owed BMW before, but I am sure it is not cheap if you need to replace some major part.
Yes, it can be extended anytime during the fit 3 years so it might be a good idea to wait and see.

Tnx once again.
I have an extended warranty through my insurance geico. Something stupid like $30 a year and i have a $250 deductible.
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      09-07-2019, 07:10 AM   #6
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Quote:
Originally Posted by steve090619 View Post
I have an extended warranty through my insurance geico. Something stupid like $30 a year and i have a $250 deductible.
Me too BUT the OP is in the UAE. I doubt that GEICO writes their policies there.
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      09-12-2019, 09:46 AM   #7
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Tnx all for your help. Was told today by dealer that fixed price is only at the time of purchase. After that you can do it close to the expiration date, but bmw will need to check the car and based on the state will quote for extended warranty. Little bit risky if something isn't right...
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      09-12-2019, 09:56 AM   #8
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Quote:
Originally Posted by Midina View Post
Tnx all for your help. Was told today by dealer that fixed price is only at the time of purchase. After that you can do it close to the expiration date, but bmw will need to check the car and based on the state will quote for extended warranty. Little bit risky if something isn't right...
Seems odd... Since the car would be under the factory warranty anything they find would be fixed for free, no? Or am I misunderstanding something here.
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      09-12-2019, 11:50 AM   #9
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Quote:
Originally Posted by LogicalApex View Post
Seems odd... Since the car would be under the factory warranty anything they find would be fixed for free, no? Or am I misunderstanding something here.
Some cars seem to be forever trouble free; others seem to have been made on the final championship world cup game day. It seems reasonable to me for BMW to do its actuarial risk analysis based on its experience with the particular vehicle and also all vehicles.

For example, I am currently paying for GEICO Mechanical insurance. I won't get any benefit until after four years but I am also confident that the actuarial assumptions assumed that as does the rate.
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      09-12-2019, 03:55 PM   #10
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Quote:
Originally Posted by SteveinArizona View Post
Some cars seem to be forever trouble free; others seem to have been made on the final championship world cup game day. It seems reasonable to me for BMW to do its actuarial risk analysis based on its experience with the particular vehicle and also all vehicles.

For example, I am currently paying for GEICO Mechanical insurance. I won't get any benefit until after four years but I am also confident that the actuarial assumptions assumed that as does the rate.
For a third party insurer like Geico that makes a lot of sense to me. To look at their risk tables and opt to not insure a car for mechanical breakdown if they have a history of excessive claims or costs to repair making it impossible to profit off the deal. For BMW to do it though doesn't make a whole lot of sense to me.

Any increase risk that BMW would have seen across the model would apply just as cleanly to the cars they are selling the extended warranty on today as it would be if the car owner opted to purchase that insurance 3 years into their 4 year factory warranty. If it were an issue you'd expect BMW to revise extended warranty prices up for new buyers across the board or stop offering it on their cars (this one is highly unlikely even if they had massive losses due to an unreliable model shipping -- they'd offer buybacks before cancelling the program).

The OP suggested that the dealer felt they would need to pre-inspect the car before offering the warranty with the insinuation made that if the dealer spots a lot of problems they'll offer to not sell the warranty (and such buying today is safer because that inspection isn't needed). That seems extremely odd to me though since the car would still be under its factory bumper to bumper warranty. So the dealer would be expected to fix anything they saw to BMW specifications making it a moot point inspection.

Unless they aim to exclude coverage for stuff like accidents or damage caused by user modifications... But those are excluded from both the bumper to bumper warranty and any extended warranty anyway. So no need to waste time with an inspection.

My take... The dealer wants to sell the warranty today so is trying to add some element of "risk" to the buyer who decides to wait to hopefully force the buyer to convert to a sale today.
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      09-12-2019, 03:58 PM   #11
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Quote:
Originally Posted by LogicalApex View Post
For a third party insurer like Geico that makes a lot of sense to me. To look at their risk tables and opt to not insure a car for mechanical breakdown if they have a history of excessive claims or costs to repair making it impossible to profit off the deal. For BMW to do it though doesn't make a whole lot of sense to me.

Any increase risk that BMW would have seen across the model would apply just as cleanly to the cars they are selling the extended warranty on today as it would be if the car owner opted to purchase that insurance 3 years into their 4 year factory warranty. If it were an issue you'd expect BMW to revise extended warranty prices up for new buyers across the board or stop offering it on their cars (this one is highly unlikely even if they had massive losses due to an unreliable model shipping -- they'd offer buybacks before cancelling the program).

The OP suggested that the dealer felt they would need to pre-inspect the car before offering the warranty with the insinuation made that if the dealer spots a lot of problems they'll offer to not sell the warranty (and such buying today is safer because that inspection isn't needed). That seems extremely odd to me though since the car would still be under its factory bumper to bumper warranty. So the dealer would be expected to fix anything they saw to BMW specifications making it a moot point inspection.

Unless they aim to exclude coverage for stuff like accidents or damage caused by user modifications... But those are excluded from both the bumper to bumper warranty and any extended warranty anyway. So no need to waste time with an inspection.

My take... The dealer wants to sell the warranty today so is trying to add some element of "risk" to the buyer who decides to wait to hopefully force the buyer to convert to a sale today.
Really? A dealer trying to pressure a car buyer into purchasing an extended warranty? Does that really happen? Do you mean that the dealerships are not acting in our best interests? Shocking!

More seriously, in the US a few days ago a large group of major multinational corporations said that they owed service not just to their stockholders but also to other stakeholders like employees and customers. Think it will ever roll down to dealerships?
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      09-12-2019, 04:10 PM   #12
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Quote:
Originally Posted by SteveinArizona View Post
Really? A dealer trying to pressure a car buyer into purchasing an extended warranty? Does that really happen? Do you mean that the dealerships are not acting in our best interests? Shocking!

More seriously, in the US a few days ago a large group of major multinational corporations said that they owed service not just to their stockholders but also to other stakeholders like employees and customers. Think it will ever roll down to dealerships?
lol yeah. It is like saying the sun is bright or that water is wet. Dealerships are amongst the worst...

This isn't directly correlated to Dimon's comments on the need for the business community to focus more broadly than their current narrow definition of profits (shocking that shift is taking this long...). It is more related to the real market trends impacting automakers going forward.

The non-luxury brands are packing more and more luxury features into their cars as intense competition has forced automakers to move more and more of their key features to third party suppliers who sell to every other automaker. As a result, everyone has all of the same tech features and non-luxury brands offer high end features like leather interiors. Couple that with technology moving rapidly toward turning the driver into a passenger and luxury differentiation isn't going to get easier for automakers.

Luxury carmakers have no choice, IMHO, but to go back to luxury basics. The definitive differentiator between luxury and non-luxury in most industries is quality of service and relationships. So far, luxury carmakers have ignored this. I expect we'll see this change a ton soon otherwise these brands will eventually fade away.
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      09-12-2019, 04:51 PM   #13
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Quote:
Originally Posted by LogicalApex View Post
lol yeah. It is like saying the sun is bright or that water is wet. Dealerships are amongst the worst...

This isn't directly correlated to Dimon's comments on the need for the business community to focus more broadly than their current narrow definition of profits (shocking that shift is taking this long...). It is more related to the real market trends impacting automakers going forward.

The non-luxury brands are packing more and more luxury features into their cars as intense competition has forced automakers to move more and more of their key features to third party suppliers who sell to every other automaker. As a result, everyone has all of the same tech features and non-luxury brands offer high end features like leather interiors. Couple that with technology moving rapidly toward turning the driver into a passenger and luxury differentiation isn't going to get easier for automakers.

Luxury carmakers have no choice, IMHO, but to go back to luxury basics. The definitive differentiator between luxury and non-luxury in most industries is quality of service and relationships. So far, luxury carmakers have ignored this. I expect we'll see this change a ton soon otherwise these brands will eventually fade away.
I think that is a great comment. Look at the Kia Telluride and Hyundai Pallisade and compare them to the luxury competitors. I have a partner who makes an extraordinary good living and he has an X5 and is about to replace it with a Hyundai Pallisade; he can afford a new X5 but he doesn't think it is worth the extra money compared to the new Hyundai.
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      09-12-2019, 05:17 PM   #14
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I agree that Logical's comments were thoughtful and hit the nail on the head.

We bought our G30 in late July and had a pleasant surprise at a large dealership that we hadn't used before. It was further away than 1 or 2 others but they had the car we were interested in. It turned out to be a pleasant experience and the whole process was handled in a mostly relaxed and professional manner. Even the session with the finance manager was pretty good. It can be done, and it's a process that we'll remember if we buy another BMW.
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      09-13-2019, 07:46 AM   #15
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Quote:
Originally Posted by SteveinArizona View Post
Some cars seem to be forever trouble free; others seem to have been made on the final championship world cup game day.
Gads, ain't that the truth!

As for the OP's question, I think that maintenance warranties (paying for oil changes, etc. in advance) are a rip-off, and you're better off paying for what you need when you need it, and not necessarily at the dealership. Of course, I DIY a lot of minor maintenance myself, and not every wants to or is able to do that.

Putting off the extended warranty is a good idea. Not only do you get to "use" and invest your money for three years, you may decide to trade-in the car, or it may get destroyed or stolen, in which case the money is wasted. And if the car proves to be problem-free under the basic warranty, especially if you take care of it and don't put a lot of miles on it, then you may just want to take your chances and pay for things as (if) they show up.
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      01-09-2020, 05:05 PM   #16
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Actuaries get paid big bucks to make money for those insuring risks of all kinds. Personally if I bought a BMW new and took at the very least the care required by BMW and knew how it had been driven maintained etc I'd risk going without extended warranties. If you own a used one without a clear maintenance history and knowledge of the owner, maybe. Actuaries I'm pretty sure base their risk premiums on an abused or neglected vehicle. Worse case scenario. More often then not the premium will be a bigger number than the actual repair costs for the period of time insured. Why else would these extended warranties be pushed on us so much. They make tons of money on these plans. If you want peace of mind, my guess is you'll pay dearly for it.
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      01-12-2020, 09:56 AM   #17
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Quote:
Originally Posted by LogicalApex View Post
I am purchasing my first BMW (it is on order) so I can't speak from a historical perspective (if that matters anyway since each car is somewhat unique). I am hoping that the car proves to be as reliable as my '14 Mercedes C300 where buying the extended warranty wasn't all that useful (car is super reliable and hasn't had any major issues). I can only speak to what my plan is here with the BMW.

From what I can see, there isn't really any penalty to buying the warranty after purchase (so long as your factory warranty hasn't expired) and I can't confirm that BMW extended warranties are fully refundable like Mercedes is (up until you enter the extended warranty phase). As a result, I don't see any reason to purchase the extended warranty immediately and can base some of my decision on having driven the car for a couple of years first.

I was quoted $5K for 3y/100K mile "Platinum" extended which is a fair bit. On my C300 I paid $2500 or so for 3 years/unlimited miles. I felt $2500 would be easier to hit in repair costs than I do about hitting $5K in a short period. So I'm going to sort of "see how it goes".

I'd recommend the same...
The warranty rates are substantially higher if you wait to purchase after the new car warranty expires. Something to keep in mind.

I have plenty experience with BMW extended warranty contracts and they are excellent. Highly recommended for anyone planning on keeping their BMW to a certain number of years/miles/kilometers. I would not do it any other way.
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