By on June 6, 2012

 

Rémi writes:

Might be weak, but since you’re asking for questions, here’s mine.

Just got a 2011 BMW 335d late last year (Diesel FTW!), love the car and torque so far and getting 35 mpg with it, but I am a bit afraid of the long term reliability of this extra complicated German engineering marvel. BMW is offering an extended warranty from 4 years/50K miles to 6 years/100K miles for about $2500. I am guessing they think they would come out ahead statistically, which would lead me to not pay for the extension, but I’d hate to be the statistical anomaly given the price of parts and labor…

Hope this helps, and looking forward for the answer!

Sajeev answers:

I’m not entirely sure how any European manufacturer makes a profit on warranty work.  Maybe they don’t, perhaps it’s important to get a large sum of cash up front for use in other expenditures, in lieu of bank loans or perhaps to buy back stock when the time is right…or about a bazillion other actions in the corporate playbook.

Perhaps your lump sum payment is far cheaper than getting money any other way…but that’s just the Piston Slap guy over thinking the whole affair. And inappropriately channeling his inner Robert Farago.

Granted this is not a 7-series and I don’t know if your 3-er is loaded up with more fragile electronics than the average German whip, but I’d still say the safe money is on you buying that warranty.  Just remember one thing: warranties prices aren’t set in stone.  Bid from a few different places to see who will sell it at a discount.  Don’t expect 50% off, but try to get back a little commission from someone. Everyone wants to make a deal.

Send your queries to sajeev@thetruthaboutcars.com. Spare no details and ask for a speedy resolution if you’re in a hurry.

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74 Comments on “Piston Slap: The Case for an Extended Warranty...”


  • avatar
    HerrKaLeun

    If you yourself already think that the car will be unreliable and expensive to repair within 6y/100K, why do you not pick a different car?

    It seems no one buys a Corolla extended warranty. I know, this is too boring and who would want to miss the excitement of going to the shop every 2 months and get a loaner for a week (since none of the BMW mechanics actually will find out what is wrong and they just start replacing parts on a hunch on your dime).

    I understand when people buy a car thinking because it is expensive it will last longer and then are disappointed when it fails. But why do people accept that crap from German cars knowing ahead of time that the car is crap (and being willing to pay the warranty shows that you are aware).

    Maybe the Lexus driving dynamics aren’t as fancy. But the part that makes a BMW be more a drivers car than a Lexus isn’t what makes it unreliable and costly. It is just bad design, production, sourcing and quality control (or lack thereof).

    Make sure that extended warranty covers the second owner as well. That way you can sell it after 5 years and make the buyer believe there is no risk since he still has 1 year warranty left.

    • 0 avatar
      MrWhopee

      I think that before you could say: “Why not pick a different car?” you need to consider: What else should he had picked instead? I think there aren’t that many BMW 335D competitor that’s potentially more reliable than it. Surely you don’t think a 335D customer would be interested in a Corolla, no matter how reliable it is. Lexus does not have diesels of that size and power. Neither is Toyota. If there are competitors to the 335D it’s likely from Mercedes or Audi, not much of an improvement, reliability-wise.

      • 0 avatar
        200k-min

        “I think there aren’t that many BMW 335D competitor that’s potentially more reliable than it.”

        Is this about diesel, or fuel economy in general? If you want a diesel just to have a diesel, well yes, your options are limited. If it’s about fuel economy, I’d argue that a hybrid is a better system for both fuel economy and long term reliability. Driving dynamics? Well, if that’s your game why do you care about economy? Then we come to the ever important image factor. Yes, a bimmer is far more cool looking than a Prius, so in the vanity game point goes to the BMW.

        I agree that BMW (Audi & MB too) get a free pass on making some not so reliable vehicles all because they have that image factor. Meanwhile Cadillac and Lincoln, both of which are more reliable than the Germans, don’t get that same pass. It’s bullsh*t IMHO, but I know more ex-BMW drivers than new ones. At the end of the day we all need to get from point A to B and a “Corolla” is pretty nice when your German presteige is in the shop.

      • 0 avatar
        MrWhopee

        Well, fuel economy and performance. Prius with 9-sec 0-60 is definitely not in the ballpark. I suppose the Lexus GS450h is sort of a competitor.

        I too am amazed what the German makes are able to get away with, in terms of heartache for their owners. Yet people pay more for their products! It’s got to be magic. But I’ve never owned any of their products, so I’m not sure what the magic is all about. I’ve driven several briefly, but not live with them. Too afraid of the risk of getting a money pit and unable to get away from it, you know, having a problem and not having the money to fix it, and can’t sell it without fixing the problem. I guess I kind of chicken that way… :)

        You have to admire them, though, being able to keep it up all these years. So long as they can keep it up, they’ll continue to rake the money.

    • 0 avatar
      RobAllen

      Where else can you get a 4-door people mover with 400lbft of torque, over 35mpg, leather and a sunroof for the mid-$30k range (used)? There are no competitors to the 335d in the US.

    • 0 avatar
      jmo

      “miss the excitement of going to the shop every 2 months and get a loaner for a week (since none of the BMW mechanics actually will find out what is wrong and they just start replacing parts on a hunch on your dime).”

      You really think the gap is that big? In reality is a 2007 BMW might have 1 repair per year while an Accord might have .5 repairs per year. With the Accord you go in every two years, with the BMW every year. Is that extra trip every other year really going to sway your buying preference that much?

  • avatar
    stuntmonkey

    > BMW is offering an extended warranty from 4 years/50K miles to 6 years/100K miles for about $2500

    Yeah, they will come out ahead, but different people put a different price on peace of mind, so unless $2500 is absolutely dear, I’d think hard about getting too.

    With any of the E46/E90’s it’s what happens after 6 years that always concerns me… things that either break that usually don’t break on Japanese cars, or things that have a reasonable expectation of breaking that cost an arm and a leg to fix.

  • avatar
    Zackman

    An extended warranty is probably a wise investment in this case from what I’ve read on here the last two years about anything European-made such as VW, Porshe, BMW, Audi and M-B.

    When my daughter bought her 2003 Civic, they talked her into the extended warranty. True, it wasn’t much, but she really wanted it even after I told her she’d never need it. Turned out she only kept the car 3 years, as she hated the thing.

    I didn’t get one on my 2004 Impala, nor for wifey’s 2002 CR-V. Ditto for not being necessary.

    She didn’t get one on her 2007 Trailblazer and haven’t needed it, as it has been a great Sherman tank – er – vehicle for her, and the few issues she did have, the General took care of it. We do have a couple of good GM dealers here, which apparently seem to be rare…

    So, if I would buy anything European, I’d get the warranty. If I were going to buy a Chrysler – I would also until I perceive they are reliable. Remember the Ultradrive and their kin and 2.7L fiascos?

    I also trust Ford, so if I were to buy a Fusion, a Taurus, Escape or Focus, I’d feel pretty good staying with the factory warranty.

    • 0 avatar
      geozinger

      I’ve had a real mixed bag on extended warranties. I’ve had them on about five of my cars; on three of them, they turned out to be unnecessary. On one, the repairs were happening so frequently, that even the $100 deductible was adding up. But we did get our money’s worth out of it; I think there were like $5K in repairs, we paid about $800 out of pocket.

      At least with GM products, you can buy the GM Protection Plan up to the end of your 3/36 bumper to bumper warranty, I did it at 35.5K the last time I did. Additionally, there are many dealers around the country who will sell it to you over the phone greatly discounted if you don’t like the price your local dealer is offering you. The GMPP coverage levels are very good, IMO.

      When we bought our last new car, the F&I guy tried to sell us a third party extended warranty, the last one I had (admittedly 20+ years ago) was awful. I told him flat out, if they’d offer me GMPP for the same money they wanted for the aftermarket one I’d bite, but he went right back to the third party sales line. No sale.

      FWIW, I’ve only replaced the intermediate steering shaft on this car, plus the normal cheapo Chinese brake disc re-truing. That’s it for warranty work on a 3 year old 56K mile Pontiac G6.

      • 0 avatar
        Zackman

        “That’s it for warranty work on a 3 year old 56K mile Pontiac G6.”

        Ha ha ha, Geozinger! You don’t call them “Cockroaches of the Road”© for nothing! Funny about the Cavalier/Cobalt/G5s – I just don’t ever hear of anyone who has/had trouble with them – and there a few in my neighborhood, except for a kid who bought a Cobalt SS a few years ago and promptly trashed it, but that was his fault.

        ©You.

        FWIW, I think someone over on “CC” owes you a couple from the other day…

      • 0 avatar
        geozinger

        @Zackman: Thanks for the compliment. The puckish part of my nature just likes the fact that people now think of me when they think of a cockroach of the road… Not bad for an off the cuff comment from so long ago. I really need to monetize it, though… Otherwise, I’ll never be able to retire… :P

      • 0 avatar
        Herm

        “At least with GM products, you can buy the GM Protection Plan up to the end of your 3/36 bumper to bumper warranty… Additionally, there are many dealers around the country who will sell it to you over the phone greatly discounted if you don’t like the price your local dealer is offering you.”

        Nissan offers the exact same deal, often at substantial savings if you get your factory extended warranty from a third party Nissan dealer.

    • 0 avatar
      28-cars-later

      Spot on Zack, I would never own a Euro make post 1995 without an extended warranty. I think prior to the mid ninetys they were built a bit sturdier and were more favorable to the DIY crowd. I’ve seen many a Volvo prior to this still running strong and have a friend with an E300 who does his own work for the most part.

  • avatar
    mcs

    What I think you’re talking about is the Maintenance Program Upgrade – which is more than just an extended warranty. It includes maintenance.

    http://www.bmwusa.com/standard/content/owner/maintenanceupgrade.aspx

    • 0 avatar
      thesilence

      Really good point – the maintenance is worth it.

      I was speaking to a guy at a Valvoline shop who asked me why on earth I’d take the car to them for an oil change when BMW will do it for free. I asked him about the extended warranty. He said his brother has an M3 and the best thing about the extension is that you’re essentially paying for brake pad replacement around 40,000 miles or so. He said that job alone is usually 2,000, so every time you take it to the dealer, just ask them for new pads.

      Not sure how much it’s true, but it definitely is something I’m going to do with my 3er next year.

      • 0 avatar
        hidrotule2001

        Holy Moses; 2,000 for a break job? What do they put in the pad, carbon fiber?

      • 0 avatar
        skor

        $2K brake job? Is that for real? Are BMW brake pads made by hand at the Rolex factory?

        Last time I did the front brakes on my old Mazda, I found new rotors on eBay for $12 each, and a pad set for $17. Did the entire job in 3 hours.

      • 0 avatar
        28-cars-later

        “Are BMW brake pads made by hand at the Rolex factory?”

        +1 haha.

      • 0 avatar
        noxioux

        Charging $2,000 for a brake job should be a felony.

      • 0 avatar
        mnm4ever

        Considering the pads are ~$150 per set, I cannot imagine how he got to $2k. Sounds like internet rumors again. Or that included replacing the rotors, which admittedly are quite expensive… $250ish each. If BMW is like VW, they will not turn rotors, and recommend replacing them along with pads each time “for optimum performance”.

        And I doubt that BMW will simply replace your pads for free whenever you ask. They won’t even do an oil change unless the computer says its time, otherwise you pay for it. My mom’s BMW went 12-15k miles between oil changes by the computer. My dad did his own in between.

      • 0 avatar

        Correct, BMW will replace brake pads whenever iDrive indicates so. Lest forget the labor charges almost $200/hour.

      • 0 avatar
        mnm4ever

        I think that depends on where you are. Around here it’s like $90-100 or so, which is basically the same as VW, and even most Japanese and American car dealers too. Independents are usually $60-80 anyway.

        No way they can get get away with $200/hr here. But still, at $300 for pads, $1000 for rotors, and labor, you can easily hit $2k.

  • avatar
    spyked

    NEVER buy an extended warranty until the original warrranty is expiring. You might not keep the car, and even if you do, you will have had years to get to know it, to decide if it’s going to break down.

    I personally wouldn’t worry about it if we were talking VW or MB diesels, but BMW isn’t known to be the paragon of reliability lately.

    Keep your money, if you still love the car when the original warranty is running out, then consider it. I have a feeling you won’t want the car anyway if it NEEDS another warranty.

    • 0 avatar
      gslippy

      Agreed. Or better yet, forget about ever buying the warranty and simply resolve to trade the car at the end of 4 years.

      BTW, even a Hyundai Accent comes with a 10/100 warranty for free. Just sayin’.

    • 0 avatar
      ott

      “NEVER buy an extended warranty until the original warrranty is expiring. You might not keep the car, and even if you do, you will have had years to get to know it, to decide if it’s going to break down.”

      I wish I could decide when my car would break down. Sadly, it seems to have a mind of its own and decide for me…

  • avatar
    GS650G

    Extended warranties have more fine print than the purchase order, read and heed them carefully.
    If you don’t work on your own cars or feel it’s impossible to do so then get a warranty extended. I fix anything and everything no matter what so I’m not worried about repairs. I don’t subscribe to the idea only special people can fix cars, modern autos practically tell you what to fix.

  • avatar
    Mark MacInnis

    Hmmmm. Just sayin’, but what if they rolled that $2.5 Large into the price of the car, and advertised “Free Lifetime repairs” for as long as you owned the car?

    Wouldn’t that be easier, AND give a company a HUGE marketing advantage….

  • avatar
    schmitt trigger

    “or about a bazillion other actions in the corporate playbook.”

    Paying the executive bonuses?

  • avatar
    boombox1

    The other poster was right, BMW does not offer an extended *warranty* on their cars, but they do offer an extended *maintenance* plan up to 6 years / 100K miles. If it is a warranty it’s through a 3rd party insurer which makes me really nervous… something the dealer cooked up on their own that is not affiliated with BMW.

    The extended maintenance plan is usually a bad bet, especially if you are a handy DIY’er. They put the hard sell on you to buy it in the F&I office, using phrases such as “The price keeps going up on maintenance, lock in your cost now!” and “You can buy this at any time before the complimentary maintenance period ends, but you want to do it now because BMW raises the cost of the plan every couple of months.”

    I would take $1K and sock it away in a savings account to pay for parts and the inevitable dealership battery swap-out after 5 or 6 years… underwrite your own maintenance, in a sense.

    • 0 avatar
      18726543

      This is actually an idea that I’d read about as an alternative to buying an extended warrenty. If you take the cost of the warrenty and put it in an account somewhere, even maybe one that earns interest, it’ll be there in case you ever need to pay for repairs. Otherwise, if you dump the car you can just clean out the account and the money is still yours. In this case where $2500 may be exhausted quickly by a typical BMW repair it may actually be worth buying the protection.

      Years ago I bought an extended warrenty for my 1998 Camaro. It was 3rd party and that was stupid. First off, it was misleadingly named the “Silver Warrenty” making me think it wasn’t the cheapest one, but it wasn’t the costliest either. Well, they were labeled Silver, Gold, and Platinum coverage so it turned out that I in fact did buy the least coverage. The only time I used it was just before selling the car when I brought it into a shop to have the rear pinion seal replaced. The warrenty kicked in 8 dollars towards the repair. I can tell you that I’ve made more satisfying $1200 purchases than the “Silver Coverage Warrenty” program.

  • avatar

    In 2 years that I have driven 2011 335d, it has been more reliable than my other Lexus & Toyota. It visits dealer only for scheduled maintenance & fluid changes. I’m tempting to not getting extended warranty upon expiration of OEM warranty.

  • avatar
    DC Bruce

    Given the cost of typical BMW maintenance, if this includes maintenance, it’s probably worth doing. The BMW diesel engine hasn’t been around long enough to have generated any track record for reliability (or the lack thereof), but one thing’s certain: BMW parts and service are pricey. The new generation of clean diesels sold by VAG, Benz and now BMW are quite different mechanically and operationally than the “classic” diesels of the 1980s which established a reputation of being bulletproof.

    As others said, read the fine print of the warranty carefully and see what it covers; it likely is not as comprehensive as the “bumper-to-bumper” new car warranty. Try to figure out whether it covers some expensive and likely failure points in the car.

    What I find personally intimidating is that just about all new cars sold today — with some exceptions — are using, in various quantities, bleeding edge engineering, mostly in search of every last mpg of fuel economy. So, whether they know it or not, lots and lots of purchasers are beta testers for the companies whose cars they own.

    As an owner of a 11 year old BMW, I disagree with the poster who says BMWs have “cheap” parts. They don’t. But, they do have unproven technologies: case in point, the infamous BMW cooling systems in the N54 3 liter engine that powers my car and a host of other BMWs of similar vintage. The problem is that some engineer got the idea that composite parts would be a good replacement for metal parts (weight, pinhole leaks, corrosion) such as the water pump impeller, expansion tank, radiator tank. Turns out that, after heat cycling a few hundred thousand times, these things fail, and they fail dramatically as in “explode.” Likewise the lube oil acutated variable valve timing system. BMW used a rubber compound for the o-rings that seal the system, which really isn’t happy being bathed in hot oil. So, they fail.

    And you can add a whole list of increasingly common, but bleeding edge technologies whose longevity over 100s of thousands of miles has not been proved: gasoline direct injection (high pressure fuel pump, fuel injectors, crud accumulating on the intake valve), turbo chargers, variable valve timing mechanisms, etc.

    Driving the introduction of all of this into cars at all price ranges is government fuel economy standards, so, in a way, this is like the late 1970s, early 1980s, when government emission standards forced the introduction of largely Rube Goldberg efforts to reduce emissions in an era that predated cheap computing power which could manage all aspects of engine operation. The result, among other things, was cars that were hard to start (compared to earlier generations) had significant driveability problems and, incidentally, did not develop much power for their size and sucked down a lot of fuel.

    One of the arguments for buying Honda and Toyota products today is that their engineering is very conservative, not bleeding edge. You don’t see turbos and true GDI on Hondas or Toyotas. (Toyota’s GDI includes a port injector whose function probably is to provide enough gasoline to keep the intake valve clean.) Nor do you see widespread use of other bleeding edge technology such as DCTs instead of fluid-coupled planetary automatics. So, perhaps it’s not really an accident or even “better parts” that products from these companies, as a general matter, are more reliable.

    As they say, “You pays your money and you takes your chances.”

    • 0 avatar
      highlandmiata

      The miatas (and probably all cars) have some of the same issues with the cooling system. But look at it this way, while the platic radiator doesn’t last forever, it lasts a long time (150k?) and is far cheaper to replace. If the plastic doesnt do it for you, I’m sure that someone will sell you a race cross flow aluminum jobby that will cost ten times what the plastic tanked ones do, but will last ten times as long. ( I am currently considering this, as the plastic has started the tell-tale discoloration).

      You are right that this is done to wring out the last em pee gee’s, but it is also to make the car cost less than a hand built LF-A or whatever. They’ve got to cut corners somewhere so we can all afford to buy our new cars and keep this economy humming. (Of course, I have only bought new once, and it will probably be a while until it happens again, unless you want to give me a job…)

      As for the beeding edge techs, it is what moves us forward and makes all of this interesting. You are correct that I don’t go to honda if I want innovation (thought the start/stop on the odessey was cool and seemed seamless to me)

      Pay your money and take your chances indeed. I would not buy the warranty, but if, as others are saying, it includes maintenance, I say go for it.

    • 0 avatar
      Synchromesh

      Turbos have been around since 1960s and Variable Valve Timing has been around since late 1980s. So yes, they HAVE been proven for hundreds of thousands of miles.

      Honda has been doing VTEC for over 20 years and I’m yet to hear about any VTEC parts failing under normal load (ie not counting crazy tweaked riced out engines with aftermarket FI and NOS). Ditto goes for VVT and turbos from many other companies.

      The issue here is that BMW charges a lot of money for technologies they haven’t tested well at all. Because they think their “engineers” are worth something when they’re clearly not. This is very typical of them and other German makes as well. So when you buy a German car it prompts you to have a choice: either buy into their bs extended warranties, dump the car before original warranty expires or face neverending bills from your mechanic.

      That’s another reason I don’t buy German. They just don’t make them like they used to and want too much money for an inferior product.

      • 0 avatar
        DC Bruce

        Actually turbo charging was first used on piston aircraft engines in the 1940s. With the aircraft operating at high altitudes, it was essential to avoid massive power loss.

        And yes, GM put a turbocharger in the post-1965 Corvair. But even in the 1980s (when turbos routinely failed at around 70,000 miles), the head of Volvo USA (which was very aggressive in turbocharging its engines) said consumers should consider turbo replacement at 80,000 miles a “maintenance item” like brake pads, I guess.

        The question of their longevity beyond 100,000 miles is, I believe, still an open one, although today’s turbos are more durable than those of the 80s (mostly because they do a better job of cooling the bearing and avoiding heat soak after engine shutdown).

        Honda’s VTEC system is far less sophisticated than BMWs “double VANOS” system. First, the VTEC system on SOHC Honda engines operates only on the intake valves. Secondly, the VTEC system shifts between two different cam profiles, which provides the driver with a distinct “coming on the cam” feeling. BMW’s “double VANOS” system works on both intake and exhaust valves and is infinitely variable. In short, not all variable valve timing systems are equal.

  • avatar
    EX35

    I purchased an Infiniti oem 8yr/100k zero deductible extended warranty for 1700 when I recently bought my EX35. I don’t see why you would take the chance of going unprotected on a luxury car.

  • avatar
    challenger2012

    I would hold off buying the plan until just before the original factory warranty expires. With 2-3 years driving experience, you will know if you like the car and how well it is holding up. I purchased 2 used cars that had extended warranties on them. The cost was a $50 transfer charge and each repair had $100 deductible. I used the warranty twice on one car and once on the other. I paid a little more for the cars, but it was worth it to me. Having a transferrable warranty is a selling point. Also, not covered was the battery, which in both cars, I had to replace within 30 days of me buying the cars. What are the odds?

  • avatar
    RobAllen

    For what its worth, I am planning on picking up a used 3er soon and intend to get the extended maintenance and extended warranty. BMW maintenance is expensive and I’d rather pay a fixed fee up front and enjoy the car.

    Why am I getting a car that has a higher than average likelihood of needing repair? Because in every other aspect that matters (comfort, driving experience/performance) you can’t beat it for the price (used). That being said, these cars are driven hard and occasionally break – $2,500 up front sounds like a small price to pay to make sure my bank account doesn’t break too. I think of it more like health insurance for the car. And BMW warranties are transferable, so when you are ready to part with your car, it’ll be a selling point.

  • avatar
    Steven Lang

    Aloha from Myrtle Beach!

    There is absolutely no sound reason to buy an extended warranty for this vehicle… other than fear.

    BMW does offer an extended maintenance plan. They do not offer a warranty and on the dealer side of the business so far as I know, and few things are less reliable from a performance perspective than a third party warranty program.

    Many of these lame programs go so far as to only replace parts of the engine rather than the entire unit. Others arrange to have modifications made on the agreement at any time, while also making space for narrow interpretations of what is perceived as worthy of replacement. ‘Customer abuse’, ‘manufacturer defect’, or even a small cash outlay that doesn’t cover your actual cost, are frequent outs for these companies in lieu of a secure and honest warranty agreement that actually covers the repair.

    If this were some type of special rare and expensive vehicle that requires maintenance components that border on the four figures (dealer cost), AND you are one of those folks that prefers to keep your car as a dealer queen, I still would not do it. Third party warranties are garbage regardless of the cheerleading of paid marketeers and they are written strictly to separate you from your money.

    As to your particular vehicle, I believe you can take solace in the fact that BMW has made diesels for several decades. This is not some type of unique and exploratory program for BMW. They have been doing it for quite a while.

    If you must throw money away somewhere, do it by giving your car the best components possible. Spend your time on enthusiast sites and educate yourself. In due time, your fears will go the way of Bigfoot, the Loch Ness monster, and the competitiveness of the Chicago Cubs.

    Good luck!

    • 0 avatar
      Ashy Larry

      Stephen, unless this link is out of date, BMW does provide an extended warranty plan, called “Extended Vehicle Protection”.

      http://www.bmwusa.com/Standard/Content/Owner/BMWUltimateProtection/ExtendedVehicleProtection.aspx

  • avatar
    vikast

    I faced this same situation when I purchased a new BMW 3 Series in 1999. I skipped the warranty at that time, since it was $2,500 and I didn’t know how long I would have owned the car. After 3 years, I purchased the extended warranty from my BWM Dealer and found that it was a great investment. During my 6 years and 96k miles of BMW ownership, I replaced the thermostat 3 times, headlights 4 times, taillights twice, window motors /actuators 6 times, power steering pump, air conditioning compressor, front suspension components (e.g., tie rods), oxygen sensor, interior parts that were peeling and repaired various oil and fluid leaks. These repairs would have certainly been more than $2,500 given BMW part and labor prices. If BMW is offering some great deal to purchase the warranty up-front, then I would go ahead an purchase. Otherwise, I would wait until you determine if you will keep the car and how well it has held up. You can shop around for the warranty from various dealers and see if you can get it discounted.

  • avatar
    SherbornSean

    The economist in me advises that you only purchase insurance (a warranty is a form of insurance) under 3 circumstances:

    1. it is required by law (e.g. auto insurance in most states)
    2. the potential loss is more than your budget can handle (e.g. $20K IMS failure in a used Boxster)
    3. you have inside information that the insurer does not.

    If your warranty is coming from the manufacturer, then they know better than anyone the repairs that are likely to be required, and price so as to earn a healthy margin for themselves, the dealer and the sales rep. They also know that the bulk of what you will spend is on routine maintenance, not covered by the warranty, but that you will like have the work done at the dealer, so as not to void the warranty.

    Since none of the criteria are met, buying a warranty is foolish from an economic perspective. But if the constant threat of a catastrophic failure reduces your enjoyment of the car, then $2,500 may not seem so high an investment in peace of mind.

    Just curious: have you driven an Acura TL, type S with super handkling AWD?

    • 0 avatar
      Remi

      I have not driven a TL Type-S, but the fuel economy is dismal (25 mpg highway) and I hated the narrow windows. I also used to own a 2003 Honda Odyssey whose transmission put me off of Automatic Hondas for a while.

      • 0 avatar
        onyxtape

        The Infiniti G with the 7-speed auto will get 29MPG hwy – just did a trip from Seattle to Vancouver and netted 31MPG on the accurate MPG-meter. I cross-shopped it with the 335i and 335d and just did not care for the anecdotal repair nightmares from 3 other friends that drive the 2 flavors of 335s (esp the non-diesel ones). Any gas savings are quickly offset by those costs. They all had extended warranty, but dreaded spending all those hours visiting and waiting at the service dept so that’s also costly too.

        Personally, after driving both numerous times I thought the G did at least 80%-90% what the 335 can do in terms of handling, feel, and power delivery. Plus the bang for the buck factor, even when I was pricing a brand new G vs. a 2008 335.

  • avatar
    Remi

    I am the author of the question so I thought I would answer all the questions above:
    1. Why did I buy a car that may not be reliable
    Because I wanted a fuel efficient vehicle that was very fun to drive, and the hybrids can’t compete on the fun to drive part.

    2. Am I talking about extended warranty or extended maintenance?
    I am talking about extended warranty. The maintenance seems overpriced, and there is a known upper bound on maintenance expenses (but not on failures) – I also drive mostly on the highway and the car predicts I won’t need break pads for another 70K

    3. Can I work on the car myself?
    Some stuff sure (like brakes and oil/filters), but the dual turbo, DPF/SCR setup doesn’t seem very amenable to DYI repairs as far as I can tell. But BMW parts aren’t cheap, a water pump is $500 for example.

    4. This engine is too new to have a track record.
    Not entirely true, the 335D came out in 2005 in Europe (albeit without the complicated SCR) and the M57 engine has been out since 1998 (it has since been replaced by the N57)

    • 0 avatar
      nerdowell

      A few months after buying my 2011 Sportwagen TDI, I began to get nervous about turning down the extended warranty (I think it was around $1700). Thinking of changing car insurance about the same time, found out Geico has mechanical breakdown insurance. If your car is under a year old and less than 15k miles, it’s just a few bucks a month on top of your premium, with a $250 deductible AND that’s getting it fixed by dealer or wherever. Still came in under what I was paying State Farm by a pretty good margin. I jumped on it.

  • avatar
    hriehl1

    1. Be sure the plan is from BMW and not some third party. There have been many third-party horror stories: claim denials, bankruptcies, etc.
    2. Prices are negotiable… I believe when I bought the only one I ever bought (from FoMoCo), I paid perhaps 70% of the initial price offered. (It ended up paying for itself probably 4 times over, but it was a car I knew might be big trouble, an XR4Ti).

    An earlier poster suggested that this is just insurance and since the insurer makes money, it is not a good deal for you. I disagree… life insurers also make money because their payouts are less than the odds I will die, but it is essential my family be protected against the catastrophic. If this vehicle could develop problems that run $5K or more and that would be a real hardship for you, then the plan could make sense.

    That said, if you’re driving a car where a major repair would threaten your financial well-being, you’re in too much car.

  • avatar
    dcdriver

    I own a 2008 A4 2.0t quattro sedan. My CPO warranty is good through about Spring of 2014 (6 years from original in-service date). The original owner purchased Audi Care which transferred to me when I bought it CPO so I was able to get the 35k and 45k services free. The service rep at the dealership naturally tried to get me to buy the Audi care plus which covers the 55k, 65k and 75k scheduled maintenance services. I can’t remember exactly but I think it was offered for around 2 or 2.5k, in his sales pitch he mentioned “the 55k alone will run you at least $1,000″ – I didn’t buy it as I figure I will seek out an independent shop for oil changes and other maintenance now that the original owner’s Audi Care is up.

    However I will think long and hard about an extended warranty once the CPO warranty runs out– as that is most likely the time I will need such a thing.

  • avatar
    nikita

    We made out big with an extended warranty on a car you would not normally associate with unreliability, a Civic. It was an early GX (CNG) model which was only available with the then new CVT. That was the reason. It went out three times in 60,000 miles. Honda’s actuaries priced it the same as any other Civic, tilting the $/risk in our direction. Oh, and shop other dealers for the warranty. The markup is huge.

    If the car has new, unproven or otherwise exotic technology, get the factory-backed warranty. For those that say “buy a Corolla” some of us want a different car for our own reasons, an “Ultimate Driving Machine” or in our case, solo in the HOV lane and half price fuel. No other car on the market at the time had the same capability.

  • avatar
    jaybird124

    Congratulations on the 335d! You will love it. I have an ’09 335d which I’ve adored.

    I would recommend spending that money on fluid changes that are not included in the BMW Maintenance program: (transmission, differential, power steering, etc). BMW bills these as ‘lifetime’ fluids, but you’re must better served replacing them every 30-50k. Join bimmerpost.com a wonderful forum with great information.

    As far as those saying this is ‘unproven technology’, this motor has been around for many years over in europe, we’re just getting it over here now. The E90 chassis has been around since ’05 as well, so I think you’re good on both ends, just take care of it, change ALL of the fluids, and don’t put any chips on it. Enjoy!

  • avatar
    Junebug

    That A4 is going to need a timing belt around 90-100K, bank for that.

  • avatar
    DM335

    If a car has a lot of electronic equipment, I think getting an extended warranty makes a lot of sense. I look at an extended warranty like health insurance–if you don’t end up using it, are you really that upset?

    I agree with the posters who suggest waiting until the new car warranty is about over before getting the extended warranty (or “service contract”). With most manufacturers, you can buy a “new car” contract as long as the new car warranty is still in place.

    I have a 2008 335i convertible that I bought an extended warranty for just before the original warranty ended. No way did I want to own a retractable hardtop without it. It was nearly $3000 but it gives me peace of mind as well as economic protection. With iDrive and Laser Cruise, there are some potentially expensive parts on my car.

    Even on a Toyota, I will do the same when the end of the new car warranty comes near. In one case, I sold the car to family members who were able to have a service contract up to 100,000 miles. When I traded another Toyota, I was able to get a partial refund. (Beware on the BMW: the extended warranty is not cancelable or refundable.)

  • avatar
    toxicroach

    On my 2006 330i, during the one year I had it I had both motivators break in the back doors, the trunk lock go screwy, and a couple of other problems I don’t recall anymore. This is while it had 40-50000 miles on it.

    Each one of those problems would have cost $500 bucks each at the dealership. I shudder to think what a major problem would have cost. Because it was under the CPO warranty I spent like $150 bucks instead of $1500.

    I would get the warranty. Really you both will probably make out; they get 2500 bucks and you get to avoid getting gouged over every little problem. If your worried about the money at all, imagine the stress of wondering how much a transmission replacement on one of those things would be. (Quick google search indicates: 5400 + labor… so, like 7000?)

    I know my experience is anecdotal, but the BMW experience is for either richer men than I, those with a good mechanic in the family, or guys with extended warranties.

    • 0 avatar

      Each motivator is $140 at the dealer, but would be $600 plus installed. Front Control Arm bushings, $95 but $500 or so installed. The 3 is easier than you’d think to work on, they designed it to be taken apart. Metal is high quality so you spend less time cursing at rusted bolts. A bit of DIY, if you can, makes BMW normal in price.

      I’ve read the CPO warranty, and it’s the old “internally lubricated parts” even though those words don’t appear. I thought twice before buying a CPO 5 series, as the Active Steering and the other gadgets were not covered. Most cars don’t drop the crank, or if they do, have already.

  • avatar
    cRacK hEaD aLLeY

    From a long-time BMW owner. Look at this this way:

    On a platform that has been around for >7 years sold in 35+ countries and powered by a low piston speed inline six with compression ignition. Owned by someone that knows the difference between a rod-knock and a tie-rod:

    1) Pay around $3.50/day for 730 days to purchase a contract that may (or may not) cover parts and labor needed for mechanical repairs that *MUST* occur within contractual 730 days.

    or

    2) Pay $2,500 to drive no more than 100,000 miles in 6 years and be exempt (or not) of repair payments that MUST occur within 730 days after 1460 days of correct mechanical operation.

    Ha ha.

    You are statistically probably going to require bodywork and tires. And some medical/dental/counseling work done to yourself.
    Uhm. None covered by BMW $2,500 contract.

    Likely, you will end up with a $2,500 battery if you are “not lucky”.
    In other words, you are betting against BMW. You end up hoping something goes terribly wrong with your transmission. You are hoping your turbo melts on day 728 so you can get your money “back”.

    That’s not how a BMW dude should think. That’s how a 2012 Corolla owner feels inside the financing office after signing up on the same $2500 extended Corolla warranty. He’s now starting to regret the $599 TPCPP (Teflon Paint Coating Protection Package).

    C’mon now:

    – find/introduce yourself / make friends on/at an internet board and ask/search for a enthusiast-owned BMW/Porsche/Audi/VW repair shop in your local area.

    Then go there. Then introduce yourself, shake hands, get their card.

    When your OEM stuff is finished, take your car there for an oil change. Get an alignment. Shake hands. Smile. Talk. Ask questions. Get a coffee mug and a decal.

    Use that $2,500 for a gym membership, concerts with your wife/girlfriend/boyfriend/family/whatever and weekend road trips with all of them on the 335d

    I can guarantee the BMW executives that sold you that warranty will be using your money for things like that.

    • 0 avatar
      toxicroach

      Betting against BMW’s electrical system is not a bad bet.

      5 minor repairs over the life of the warranty and you’re breaking even.

      You have to realize that BMW is looking at their costs; you are looking at retail. So if you save 2500 on repairs, you cost BMW maybe 1500. They still come out ahead and you break even. You’re betting on whether or not you would spend $1250 or more at dealership prices in the years between 2015-2017. I can assure you that is a very, very easy number to reach.

    • 0 avatar
      mnm4ever

      In defense of Toyota, it is highly unlikely that a Corolla warranty would cost $2500… :)

      But I agree with what you are saying.

  • avatar
    Caraholica

    I would recommend buying it, if you are still reading this far. This is the selling point behind the BMW CPO car program and it makes loads of sense. I would agree that waiting until the last minute and shopping would be smart,if the car gets hit with a meteorite you dont get it back.

    Unless you have owned newer BMWs you will be stunned by the parts prices, even for wear items, and everything is a wear item on your car. You can easily pay $2k for brakes at a dealer. The gas tank on my SULEV 328i is reported to cost $8,000. There is a separate 150k mile warranty on these California specials, but it also raises the likelihood that the insurance companies would total these in an otherwise repairable crash.

    Meanwhile, just enjoy the hell out of your car and don’t diminish your driving happiness with anything to do with money.

    • 0 avatar
      mikedt

      $2k for brakes? How is that even possible unless we’re talking about a complete rebuild of all calipers and master cylinder.

    • 0 avatar
      mcs

      A complete brake replacement kit, (pads, 4 rotors, hold-down bolts, sensor wires) for a 335i is $600 from Bavarian Autosport – a independent BMW parts supplier.

      I have both Toyotas and BMWs. If given a choice between the two, I’d put up with the extra cost of the BMWs – and I do. I get side-by-side comparisons on an almost daily basis and the BMWs are definitely worth the extra expense for the better driving experience – at least for me.

      I think of Toyota as similar to having a diet of bland tofu, quinoa, and spring water. Sure, you’ll live longer and it might even be cheaper – but I personally don’t want to live that way and I’m willing to put up with the ill effects of the food I like. Ya gotta pay to play and I’m fine with that.

      • 0 avatar
        mnm4ever

        I know you can get the parts cheaper, I was just looking at dealer cost, and not like I did any real research, just checked one local dealer. 2012 M3 rotors are $250 each, and pads are $130/pr, plus wires and clamps, etc I imagine. Then add dealer labor… I can see it getting to $2k, but only if BMW insists on replacing the rotors each time. I know VW does, but they also don’t cost that much. I also do not know if 335 rotors are the same as M3 rotors.

  • avatar
    mnm4ever

    I ended up not getting an extended warranty on my VW, and while it isnt a BMW, it does carry the same unreliable stigma. In the end, its pretty much a suckers bet, and the house always wins. You either bought the car with the intention of keeping it 10+ years, in which case a couple extra years coverage aren’t going to matter when the inevitable major breakdown occurs, or you will end up trading it in, in which case you are better off swapping out cars before the warranty expires anyway. Or leasing, which in the end would probably work out cheaper for someone on the continuous rotation plan.

    If you are going to keep it that long, then I think you are better off finding a good independent mechanic and also learning how to maintain the car yourself whenever possible, and put that $2500 in the bank for emergencies. Dealership prices are of course crazy, thats how they sell you the warranty. Independents are not so bad though.

  • avatar
    SuperACG

    I used to sell these, and owned one on my Jetta TDI, so I’ve been on both sides. I’ll be honest and let you know that it’s not the best deal. On my Jetta TDI, anything that broke was covered by the CPO, and once that expired, anything that the car needed was routine maintenance, or just wasn’t covered by the extended service contract.

    When I sold the contracts, I made sure to give everyone the best coverage to reduce any drama down the road. STILL, more often than not, a failed component was not covered by the contract.

    Smart money would be to bank it and use it for routine maintenance. As someone said above, you can’t afford the car if a major repair causes financial hardship.

  • avatar
    Bill

    I’m a bit late here, but as someone who wasted five years of my career as a claims adjuster for an aftermarket extended service contract company (we were always told not to call them warranties, legal reasons I suppose) I really have to advise against purchasing them. Even if the coverage seems decent and the company is good about paying claims today, that can change in three or four years when you need the coverage.

    Just as one example all of the contracts we offered had several tiers of coverage, the highest being an exclusionary level, which listed the items in the fine print that were not covered. If they were not listed in the fine print as being not covered then they were covered. Only one of the dozen or so contracts we offered listed the CV joint boots as not being covered. For over four years we covered CV joint boots on all the other contracts, until one day we were advised by management that CV joint boots were in fact “maintenance items” and as such were not covered on any of our contracts. Now I have never seen CV boots listed in any maintenance schedule, nor anything to indicate they are designed to wear out like brake pads or spark plugs, yet we were not to cover them anymore. It’s been three years since I quit that job, but if I took the time to write down all the ways we put our paying customers through needless hell I’m sure I could fill a book.

  • avatar
    Dave M.

    I bought an off-lease 3 year old 9-3 Aero convertible with 18k on it. The $1500 extended warranty has paid for itself twice over in the last 5 years and 30k miles.

    Good investment. I wouldn’t spend it on a Japanese-branded car though…..

  • avatar

    I represented a nice young couple when they bought a used Volvo from the local “lightly used upscale car” used car dealer, who was located on our local “new car dealer” strip. They bought the extended warranty. Rubber v-belt dies, taking valves and head with it. “New” car requires $2k of work. Warranty company says no pay, until I send attorney’s letter. They send client $1,000 of $1,500, stating it is a “good faith payment”, neatly avoiding any fee to the attorney. We sue dealer for remainder of repair. He stonewalls, but in small claims court, we get a good Judge who finds the v belt not “internally lubricated” but that its failure CAUSED internally lubricated parts to fail. We got a check from the dealer too, making the buyers whole. I’ve since learned to read all extended warranties closely-read them back to front and ignore the saleman.

  • avatar
    adrianpask

    I’m an Englishman living in America and i’m fascinated by two elements of this discussion:
    – The aversion to diesel vehicles in the USA
    – The perception of poor reliability from the German car manufacturers

    Between 50% and 60% of new car registrations in the UK are diesel based. We can buy anything from a sports coupe (e.g. the Audi TT) in Diesel format to enjoy the feel of a great car with >40mpg, through to a small family run around. My diesel Alfa Romeo sports coupe would do 60mph in under 7.5s and deliver 54mpg at 70mph cruising, i drove 150k UK miles over 7 years and incurred 1,600 gbp of repairs. Alfa Romeo in the UK have the same reputation as BMW in America.

    In the USA we seem to have a stigma attached to the use of diesel in everyday vehicles. Perhaps this is associated to diesel as the fuel of trucks, or maybe our European use is driven by high taxes on petrol. I would not guess the cause – i can only observe the outcome.

    Secondly on reliability. In the UK we certainly don’t believe that Merc, BMW, or Audi are the most reliable cars and at the same time most Brits would rate them inversely higher than the average American. I forwarded this conversation to 5 of my friends and they were stunned by the belief that this group has on the reliability of German cars.

    Yes luxury cars are expensive to repair and i have bought a warranty with ever car i’ve owned and have always broken even on the policy. The perception that BMW is ‘unreliable’ or less reliable than any American-made counterparts is extremely interesting.

    Perhaps the gap here is less about the facts of mechanical failure, and more about the perception of users generated through brand message, cultural heritage, and chat room discussions?

    • 0 avatar
      adrianpask

      Here’s a nice illustration of the gap between perception and factual measurement: The UK Reliability index takes into account all factors of a repair, the cost of the parts and the frequency of failures.

      http://www.reliabilityindex.com/manufacturer

      Where are BMW – 26th ! but this is not a measure of ‘how often does it breakdown’ it’s a tri-factor assessment.

      My Alfa Romeo is at the bottom of the list – yet i had less problems with it in 7 years than i had with my ford in 3 years. Sure the repairs cost more and my service costs were higher, but it broke down a lot less than the ford did.

      This is a discussion about FEAR = False Evidence Assumed Real.

    • 0 avatar
      Felix Hoenikker

      Adrian,

      Here is a little history on the perception of diesel engines in the US. In the late 70s, GM manufacured diesel enignes based on their 350 CI V8 engines. They were horrible. Many didn[t even last for 12 month warrany period that was the norm at the time. However, Mercedes sold 80% of thier 300s in this country with diesls during that time, and they had a great reputation for lasting 500,000 miles without major work. VW made a pretty good oil burner too, but it was very undr powdered.
      GM retreated or was driven out the diesel powered pssenger car marke by the mid 80s. Subsequently, the EPA started to tighen emission standards for particulates on passenger cars and trucks with diesel engines and most diesels could not meet the rules by the early 90s. By the late 90s VW and Mercedes meet the tougher standards with the new direct injection technology but at a significant price premium to gasoline engines. MB required the use of urea injection to meet the new EPA standards. The use of high pressure direct injection couple with an expensive catalyst added a lot of cost relative to the old diesels.
      The worst problem with the Euro diesels of the late 90s and early 2000s was their substandard electronics that seemed to plague all of the European luxo manfacturers and also VW.
      Also the US emission standards are still more strict with respect to particulates than in Europe, and this limits the number of available dieels sold here to high end models that can better absorb the price differential relative to gasoline engines.
      One final obstacle to more diesel use is the higher prices for diesel fuel coupled with fewer gas stations that sell it.

      • 0 avatar
        adrianpask

        Great history – thank you for that i really appreciate it.

        Here’s something that’s quite interesting on particulates for passenger cars…the European requirement is 0.08g/mile PM as of 2009. The USA requirement is also 0.08 g/mile. This actually makes the UK requirement the same as the US requirement…..

      • 0 avatar
        Felix Hoenikker

        Adrian,
        Thanks for the info on the particualtes. I was aware that the US and European diesel emission standards would converge, but I though it was in 2013.

        Good point about percieved reliability. I propose that most Americans lunp maintenance and reliability together. Thus brands like MB and BMW that come with both expensive frequeent maintenance and repairs are branded as unreliable when they mostly high cost of ownership.
        The Japanese brands got this a long time ago, and engineered their cars accordingly. The non enthusiasts like Camcords because of their meager maintence schedules. The American brands have now beat them at their own game. Personally, I prefer cars with long maintenance intervals and will sacrifice some performace for durability and low maintenance.

  • avatar
    adrianpask

    Hi Felix – i would agree with you on the maintenance. This is something that throws me – we don’t do oil changes every 3k miles in the UK. We do that every 10-15k depending on car use. That’s a lot of extra oil !!! As with any move to a foreign country, it’s the little things that count.

    On the emissions thing is now a good time to mention the Kyoto treaty? :)


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