TTAC Commentator PG writes:
Sajeev, In their December 2009 issue, Car and Driver has a great article about how extended warranties — such as those offered by U.S. Fidelis and others — are largely scams that deceive customers, don’t really cover the cost of repairs at all, and don’t give refunds at cancellation.
My parents own a 2002 BMW X5 4.4. They bought it from Carmax and have the extended warranty from that dealership. It’s a fantastic car, but it’s had some very costly repairs — thankfully, those have been covered in full or at least in part by Carmax’s warranty. The thing is, that warranty expires this month and can’t be renewed.
The ‘rents are thinking of getting an extended warranty for the Bimmer, but after reading that C&D story I’m pretty convinced they would be throwing their money away. My question: are there ANY extended warranties out there that they can use? What can they do to help avoid the full cost of repairs?
Buying a new/different car isn’t really an option right now, because they want to keep the X5 as long as they can. The car has about 80,000 miles on it and still runs well, except for the occasional hiccup, but those can be pretty pricey on a BMW.
If you or the best and brightest have any suggestions, I’d love to hear them.
There’s a reason why the Carmax warranty cannot be renewed: genuine warranties (not the ones you see on TV) are interested in making money, not bleeding dry by the costs of older, premium German vehicles. More to the point, the current crop of “scam warranties” aren’t even remotely similar to a genuine plan underwritten by OEMs/large corporations, sold through dealerships, and subject to paperwork before coverage commences. It’s a far more evil form of the classic “cash grab.”
The question is: will a used car dealer sell you a warranty? A real warranty sold by a real people from a real company? The dealer will try their best, as a hefty commission is on the line.
Probably not, given the BMW’s future potential to vacuum money out of your wallet faster than sand in a Dyson on the beach. I’d dump it sooner than later, as your folks won’t be enamored with “The Ultimate Driving Machine” after the first un-covered mechanical/electrical failure: my parents cried a little (probably) when Dad’s BMW 7-er left him over $2000 poorer and the dealer (yes, the dealer) still couldn’t get the HVAC to blow cold in a Houston summer. Never again for them!
More to the point: it’s time to buy something with cheap parts and (though I hate to say it) non-European engineering. Such is the curse of living in The US of A.
[Send your queries to email@example.com]