Extended warranty, worth it?

[Casey]

I'll be finalizing the paperwork on my new RT soon, and I'm sure the question of the extended warranty will arise. I've never bought a new vehicle before, so this is unfamiliar territory to me. Is it worth it to buy the plan? My dealer says it'll be around $1800.

 

How long does the extended warranty last?

 

Any advice or experiences would be greatly appreciated.

 

Thanks for your time..

C

[Firefight911]

IMO, an extended warranty is not an option on the new breed of BMW. It's a must!

 

The terms of an extended warranty can be tailored somewhat as to length and transferability to a future owner. Also, the cost is VERY negotiable so don't think that it is a pay the price they quote item. Negotiate it all in the final terms of your purchase and have it written in to the purchase documents.

 

If, for some reason, the cost of this pushes the bike outside your price point, it can be added in the future. Again, discuss this option with your dealer. It used to be that you could purchase this coverage through your dealer anytime within one year but that is no longer the case. It can now be added at just about any time.

 

Whatever you do, review what is and what is not covered by the extended warranty - final drive, brakes, engine, engine management computers, etc. Sometimes there is trip interruption available so inquire on this as well.

 

A little known fact on the included 3 year/36,000 mile BMW warranty is that there is a reimbursement clause for trip expenses due to a warranty failure. I used it on Jamie's old F800ST that crapped a battery on a trip. BMW paid the hotel room expense that night.

[ragtoplvr]

It is a profit center for the dealer, and the extended warranty company makes money too. So the average extended warranty claim is a LOT less than $1800..

 

Having the final drive fail, or the transmission is more than 1800 to fix.

 

Some people have an affinity for things mechanical, others could tear up an anvil with a Q-tip.

 

Is a sudden bill a huge problem to pay, or do you maintain savings?

 

I guess do you feel lucky?

 

Can you wrench your own or are you at the dealers mercy?

 

So no, they are a bad deal, unless you are unlucky.

 

Rod

[Paul Mihalka]

Some points: $1.800 is waaaay overpriced. - You can buy the extended warranty any time the bike is still under factory warranty by time AND mileage, at the same price as when the bike is brand new. - If you plan to be a very high mileage rider, running out of warranty in a year or year and a half because of exceeding the 36.000 mile clause, a extended warranty can be well worth it, otherwise????

[Dennis Andress]

Yeah...

[Twisties]

All insurance is about managing risk. Insurance is never "worth it." The insurance co. and insurance broker (dealer) are making a profit, so obviously the insurance product costs more than the average cost of covered repairs. Clearly, on average, you lose with insurance.

 

Insurance becomes tenable when you can't manage the risk involved. So, if a plausible worst case repair would hurt you beyond your means, and is covered (read the fine print, twice, at least) then it may be advisable to obtain insurance and protect yourself from that risk.

 

You are saying, I know this costs more than I am likely to pay in repairs over the coverage period, but I can't take the risk of one or more major repairs, so I'll suck it up and do it.

 

However, at that price, you could replace a final drive, and then some.

 

[DavidEBSmith]

I agree with Jan's point about managing risk. The insurance company's actuaries know the average cost of repairs, and they set the price of the policy so that, on the average, they're collecting more than they're paying out. So on the average, the cost of repairs over the life of the policy will be less than $1800.* Actually, probably much less, because there's a hefty dealer markup on these policies.**

 

At the right price, an extended warranty can be a good deal. $1800 is way too much. I paid less than that for an extended warranty on a Mercury Mountaineer. Other than a final drive, there's not that much that breaks that frequently on these bikes that will cost anywhere near that. Even the final drive has at worst a 10% chance of failing. If you can afford $1800 for an extended warranty, just put the money in a savings account.

 

* Another important issue that affects the value of an extended warranty is coverage. Many extended warranties will exclude items like the ABS module, which rarely breaks but is insanely expensive if it does. So what is the value of the coverage if it won't cover expensive items?

 

Related to that is the stability of the insurer. There are a great many fly-by-night extended warranty companies that are gone when you need to make a claim. I bought a extended warranty for my RT from, at the time, Deutsche Financial Services, which was a subsidiary of Deutsche Bank and was later sold to GE Financial, and so was a solid company. I've bought extended warranties from Subaru and Ford which are plans run by the manufacturers, and so are not likely to disappear. I would not buy an extended warranty that was not backed by a major company.

 

** As a comparison point, the bumper-to-bumper extended warranty from Ford for our Mounty lists for about $2000, but there are several Ford dealers who will sell it online for under $1500, and they and Ford are making money at that price.

 

 

[mig]

Casey

when I bought my out of bmw warranty 2007 RT last month I was quoted at 800 dollars per year for the extended plan with "Zurich insurance"( I believe thats right) After some talking with the dealer I choose not to get it. I figure I can save that 800 a year and do the maintenance on the bike and check the final drive at the maintenance checks, change the fluid regularly and save. If It should crap out in say 2 or 3 years from now i would have the money in the bank at the ready.

i guess its like Vegas.... roll the of the dice

Miguel

[malcolmblalock]

I just got a quote from Contego Direct, at just over $800 (total) that will cover the bike for 3 years beyond the factory warranty and unlimited mileage. It covers most of the items that seem to be prone to giving trouble.

 

Any experience with this company? At that price for the additional time period, what do you think? Sounds reasonable...

[AZRTRDR]

My 2¢ worth ( no refunds).

Unless you are going to use up the standard mileage limit as opposed to the 36 months, wait. Buy it before the factory warranty expires.

If you feel that you have to finance it as part of the deal, don't!

If you have to pay the dealer more than about $800.. Don't! They and the warranty issuer are already making a profit at that price.

 

If YOU need the peace of mind, after the factory warranty expires, that this warranty gives you, OK. But do not finance it! You are already paying enough.

If you can wait to purchase it, do so, and shop around. These are profit items for the seller and are negotiable.

You are going to love your bike. I swear it. Enjoy.

[Sailorlite]

These things are called "extended service" contracts by Contego and Zurich. Is there a big difference between extended service and what we've been calling extended warranty?

[tallman]

Will it provide you with peace of mind?

If so, how much is that worth, to you?

Unless there is an advantage to buying now, why not wait?

Financing it with bike purchase isn't your best option, IMO.

Best wishes.

[hopz]

All good comments above.

 

Mine...

I bought my '05 before the end of its warranty period but I could see it from where I was. At the time the Final Drive Issue was all the rage. I was concerned, but not really fearful.

I declined the dealers generous offer... ha... of way high, in favor of buying an extension from another (different) BMW dealer at a tremendous discount. I should not mention a dealer, but I wanted to MAX-imize my comfort.

 

Jan is correct, of course, about managing risk, but... what I bought was peace of mind. My warranty is not over yet and I like that.

 

 

[Bob Palin]

I (almost) never buy extended warranties for all the reasons stated, however because I knew I would be putting a lot of miles on I paid $1200 for an independent 7 year unlimited mileage warranty in 2002 on my RT (this particular one no longer available). I'm glad I did, paid out $4800 when the transmission imploded at 72,000 miles.

 

Just an additional data point for you to consider.

[Ken H.]

You will always here antidotal evidence that they are worth it from the small percentage of people who have gotten paid for a repair that cost more than the warranty did. Indeed those kinds of scare tactic testimonials are what keep the extended warranty business in business.

 

But know that the odds are overwhelmingly against you. Those companies have rooms full of actuaries, attorneys, and marketing experts whose specific job is to ensure the vast majority of purchasers are never paid a dime.

[Bob Palin]

But know that the odds are overwhelmingly against you. Those companies have rooms full of actuaries, attorneys, and marketing experts whose specific job is to ensure the vast majority of purchasers are never paid a dime.

The odds are only against you if you are in say the 75% at least risk, after that you know something all those actuaries don't, your own behaviour. I bought my warranty because I knew I would be in the top 5% (1%?) for miles covered.

 

I entered the MOA mileage contest when I first got the bike and finished 5th in California, but I rode the same all year not just in the summer contest period.

[russell_bynum]

But know that the odds are overwhelmingly against you. Those companies have rooms full of actuaries, attorneys, and marketing experts whose specific job is to ensure the vast majority of purchasers are never paid a dime.

 

That's true in some cases. I had an extended warranty on my SeaDoo and I would have an easier time getting you go on the campaign trail for Sarah Palin than I had trying to get those jackasses to pay a claim.

 

With Lisa's BMW cage, we had no problems at all. We had several things go bad and there was never a struggle getting them to pay.

 

BUT...the bottom line is an extended warranty is a money-maker for the seller (otherwise they wouldn't do it). That means that on the average, they're going to take in more in premiums and money they make investing the premiums than they will pay out in claims.

 

So...from a purely financial standpoint, an extended warranty doesn't make sense. What it buys you, is piece of mind, and a more predictable cost of ownership.

[Ken H.]

I would have an easier time getting you go on the campaign trail for Sarah Palin

'dat true!

[Casey]

Thanks for all the replies and advice. What are some of the other companies that offer extended warranties for our bikes?

 

So I can buy an extension to the warranty before the factory one ends. Whom do I purchase it through?

 

I'm handy with tools and I have cranked wrenches on all my previous bikes, but items like the final drive failing worry me.

 

Not to mention those pesky fuel strips..

 

Thanks again,

C

[Lets_Play_Two]

You will always here antidotal evidence that they are worth it from the small percentage of people who have gotten paid for a repair that cost more than the warranty did. Indeed those kinds of scare tactic testimonials are what keep the extended warranty business in business.

 

But know that the odds are overwhelmingly against you. Those companies have rooms full of actuaries, attorneys, and marketing experts whose specific job is to ensure the vast majority of purchasers are never paid a dime.

 

I wonder how many people have ever used homeowners insurance?, car insurance? How about term life insurance? We go over this every time it comes up. Insurance only works if it is shared by many (most of whom never use it). The rates are set based on the fact that most never use it. Some specific risks are pooled differently. I pay $5000 a year for homeowners insurance because of windstorm risk. It also is usually not about cost, but rather peace of mind. And insurance companies need to make money---we can debate endlessly what is appropriate, just like we can debate whether each of us is worth what someone will pay us for our talents. If you don't like profits, find a coop, but you still need to realize that most coop members never use the benefits.

 

You need to manage your risk, and each of us has a different tolerance for the perceived risk.

[Nice n Easy Rider]

I just got a quote from Contego Direct, at just over $800 (total) that will cover the bike for 3 years beyond the factory warranty and unlimited mileage. It covers most of the items that seem to be prone to giving trouble.

 

Any experience with this company? At that price for the additional time period, what do you think? Sounds reasonable...

If you read the fine print on the Contego Direct they reserve the right to replace any parts with used parts. They don't say that they will but they have the right to. Make you're comfortable with that option.

[Paul Mihalka]

I don't know how it can be to the advantage of the off-line warranty to replace with used parts, except may be body parts. 1. They have to find it. 2. A new mechanical part carries the manufacturer's warranty for part and labor. If used and goes bad next month they have to pay for it again, part and labor.

[Nice n Easy Rider]

I don't know how it can be to the advantage of the off-line warranty to replace with used parts, except may be body parts. 1. They have to find it. 2. A new mechanical part carries the manufacturer's warranty for part and labor. If used and goes bad next month they have to pay for it again, part and labor.

Paul, I'm not sure it's to their advantage either. But they did write it in there and insurance companies have a way of covering their butts (and bottom lines) first so there must have been a reason. The only thing I can think of is if something fails in the last year of a 3-yr extended warranty they might figure all they have to do is get you through that final year. I'm not sure that the 3-yr clock starts running again whenever a part is replaced but IMO that would be an important piece of info to get before signing on.

[DavidEBSmith]

I don't know how it can be to the advantage of the off-line warranty to replace with used parts, except may be body parts. 1. They have to find it. 2. A new mechanical part carries the manufacturer's warranty for part and labor. If used and goes bad next month they have to pay for it again, part and labor.

Paul, I'm not sure it's to their advantage either.

 

It's probably is to give them the option to use remanufactured or refurbished parts. A lot of auto parts - starters, CV halfshafts, radiators, alternators, transmissions - are available as new or reman, even from the major auto parts chain stores, from companies like A1 Cardone. Thinking like a lawyer writing an extended warranty policy, to err on the side of caution and avoid consumer-fraud or class-action suits, you'd call them "used" parts.

[Nice n Easy Rider]

It's probably is to give them the option to use remanufactured or refurbished parts. A lot of auto parts - starters, CV halfshafts, radiators, alternators, transmissions - are available as new or reman, even from the major auto parts chain stores, from companies like A1 Cardone. Thinking like a lawyer writing an extended warranty policy, to err on the side of caution and avoid consumer-fraud or class-action suits, you'd call them "used" parts.

David, to be fair to Contego, I believe that they did describe them as refurbished rather than used.

[bubbamoore]

I've had 3 BMW's and 2 were under extended warranties. Each warranty cost in the $1200 range and each more than paid for itself. The 1st bike had a tranny failure that would have been $3500. The second has had 2 radios replaced at $800 ea. and a failed output seal resulted in a tranny faiure , again approx. $3500. Also both windshield swing arms @ $114 each. $600 for a replaced headlight assembly after the the reflective chrome inside began to flake off. I think I'll let you do the math !!

[Motodan]

I've had 3 BMW's and 2 were under extended warranties. Each warranty cost in the $1200 range and each more than paid for itself. The 1st bike had a tranny failure that would have been $3500. The second has had 2 radios replaced at $800 ea. and a failed output seal resulted in a tranny faiure , again approx. $3500. Also both windshield swing arms @ $114 each. $600 for a replaced headlight assembly after the the reflective chrome inside began to flake off. I think I'll let you do the math !!

 

What carrier did you have that covered the radio and did it twice?

[tomk99r11]

Well, maybe you got the proverbial oddball BMW to have had such costly repairs become necessary. Sure you haven't abused the BMW's?

It is a real shame that these things happen. We all know we hear about the problems and not the bikes that have no problems, like most Hondas for example, but when it happens to our BMW's it is expensive. I have been very lucky with my 99 RT, SO FAR.

[bubbamoore]

The second time the radio was replaced , it was under the manufacturers warranty for failing within a year (sorry didn't think about the 2nd one till you mentioned it). The carrier is Interstate National Dealer Services of Florida .