Piston Slap: The Case for an Extended Warranty

by Sajeev Mehta

Updated: May 16th, 2014 Published: June 6th, 2012

piston slap the case for an extended warranty

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.

#BMW #ExtendedWarranty

Sajeev Mehta

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6 of 74 comments

Bowlandmonkey on Jun 07, 2012

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?

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- Bowlandmonkey on Jun 07, 2012
  
  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.
  
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- Felix Hoenikker on Jun 07, 2012
  
  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.
  
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- Bowlandmonkey on Jun 07, 2012
  
  @Felix Hoenikker 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.....
  
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- Felix Hoenikker on Jun 07, 2012
  
  @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.
  
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Bowlandmonkey on Jun 07, 2012

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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