By on January 11, 2010

The ticking timebomb? (

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.

Sajeev replies:

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.

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36 Comments on “Piston Slap: Save Me From My X5!...”

  • avatar

    First let me say that the X5 is plagued with numerous problems. There are many that BMW bought back. The warranty issue is simple, if it’s not from the factory it’s no good. Over the years I’ve seen independent warranty companies come and go, and none were without major problems in regards to paying for repairs. It’s very much like health insurance, pay but don’t expect coverage.  I don’t know any BMW mechanic that would let a friend, or family member buy an X5. If you can, sell it.
    There will be some blow hard copy paste bloggers that will tell you different, but I’ve been with BMW ,and there were several issues with models over the years, kept secret, that the public is not privy to.

  • avatar

    When I worked at a Carmax competitor, we could sell an extended warranty to anyone off the street, not just customers. It was a pretty good warranty, too. I can’t remember they underwriter’s name, but they were #2 or #3 in the world for auto warranties. It was based on a matrix of the age, mileage, and make of the car. If you happened to own one of the less reliable models of that marque, you could easily come out ahead. For an older, premium marque like BMW, you might only get 1-2 extra years for $1,500 or so. The earlier you gamble on the extended warranty, the better deal you get. Sort of like life insurance, I suppose.

    Land Rover customers often came back to me saying it was the best money they ever spent ;)

  • avatar

    I have a friend who always insists on extended vehicle warranties, and no matter what happens, the answer is always the same:  “that isn’t covered.”

    Waste of money in my book.


  • avatar

    I agree with Sajeev.  Owning a used X5 without warranty is playing with fire.  A friend of mine had to pay $10 thousand (CAD) for a new transmission.  That wasn’t the only repair…

  • avatar

    I suggest going with out a warranty and just setting aside the cash that would be spent on a warranty.  I see TWO other cars in the picture that appear to be Mercedes.  If your parents are driving an X5, a SLK, and what I’m guessing is a C-class then I don’t necessarily feel bad if they have to fork out $2500 for a cam position sensor or something of the like.  Hell, for the cash that they’d want to spend on a warranty they could buy a used civic/elantra/corolla/cobalt/focus/etc that would be dead reliable and they could use that to drive them home from the BMW shop.

  • avatar

    These cars are not going to get better with age.  If the X5 is breaking a lot now, imagine what fun the ‘rents will have when it crosses 100k miles. 

    Just off the top of my head, I can give you a list of BMW issues that affect every Ulitmate Driving Machine – transmission, power window motors, heater control units, radiators and coolant tanks, water pumps, suspension bushings, etc.   Has your X5 hit all these yet? 

    I had a beautiful 330i that I loved, but that also broke a lot.  I sold it with 500 miles left on the warranty and don’t regret it.  I figure that I saved thousands of dollars by not having that thing break on me all the time.

  • avatar
    Gary Numan

    Comical…did anyone notice that the cars in the garage and driveway are probably worth more than the house? ….and then to start crying about potential service work and repair expense.   Postcard perfect image and topic to say  “Big Hat, No Cattle“.

    • 0 avatar

      Depends on where that house is located.  In my zip code, houses are about $500 per square foot, so the floor area covered by a vehicle is usually worth more than the vehicle itself.

  • avatar

    Even Manufactures extended warranties aren’t worth the paper they are written on. Although I paid plenty for Ford’s E.S.P. plan, they are very difficult to work with, even to the point of non-coverage. Lawyer said it wasn’t worth the fight since even if I received full repayment, I’d lose all the money in fighting with Ford for their Supreme Warranty.  As my dad always said, “To soon we grow old, to late we grow wise”. Never again would I spend the extra for an extended warranty from anyone.
    If the X5 is going to become that much of a money pit, I’d say that it’s time to replace it with something that will age more gracefully.

  • avatar

    I seem to always notice BMW’s on ebay with 1000 miles or so until the warranty expires.

  • avatar

    No wonder, since any aging Bimmer (or Merc, Audi or even VW) is a nightmare for parts compared to most Japanese and (some) domestic offerings. The cheapest part of owning one of these is buying it. I have sold many of these cars used at our dealership, and the handshake is just the beginning of a long and painful relationship with that customer. I HATE these cars. but I have to admit, they are beautiful. Unfortunately, beauty is only skin-deep.

    On another note, we can sell extended warranties on just about any vehicle, and because we have a good business relationship with our warranty provider, can usually get even questionable warranty claims covered with a phonecall to our rep. Normal claims are covered without hassle. But, that’s Canada. I’d suggest finding a smaller local used car dealer with a good reputation and find out if he can sell a warranty that would actually cover these vehicles, if your parents decide to keep the X5.

    I wish them luck.

  • avatar

    How is the reliability of the X3 compared to the X5?

  • avatar

    Get rid of it asap.
    If you don’t have a very fat wallet and you’re worried about repairs and reliability you don’t buy a BMW. You buy a Lexus.
    BMW is a status symbol…  it shows you could afford the repairs :)

  • avatar

    So, if you have Acura MDX and your transmission fails out of warranty and you go to the dealer, you will pay much less than for a BMW? Really?
    Of course Acura transmissions never fail, never, ever, ever. :)

    • 0 avatar

      The 1st gen MDX could have a tranny fix done at a Honda dealer.
      I think the point is that a rear diff fix is going to follow the Tranny repair, then a head gasket, motor mount, swaybar bushings, window motor . . . you get the picture :D

  • avatar

    Most warrantys are bad news–Ford trucks with the 4.6 two valve head have a problem with the 4 threads keeping the sparkplug tight. When the plug comes out with the threads you have a $3000 repair bill. The warranty company says , sorry it must have been a bad spark plug and they are not covered!!!  You could go to court and prove otherwise but what would that cost you.

  • avatar
    Brendon from Canada

    I’d agree that the earlier X5s where very prone to expensive repairs; I believe it was the mid 2004 refresh that cleaned up a lot of issues.   With regards to a $2500 camshaft position sensor – I can’t imagine what is a $120 part (OEM) on my 3 series is a $2500 part on an X5; it’s also a 15 minute DIY replacement if you know what you are doing, or close to an hour with fuzzy black and pics printed off a google search… (guess how I know!).

    In terms of the X3, it shares more with the 3 series then any other vehicle, and as such would likely be significantly more reliable then an X5 – what this really translates into… well, that’s a whole other story. 

    End of the day, I’ve found my 3 series (01) signficantly cheaper then the average VW to own; the servicing, even at a dealership is cheaper (the local dealerships publish rates for standard services like brakes, and BMWs are generally the same or less as  compared to similar Volvo/VW/Audi/Mercedes/Infiniti/Acura in my part of Canada).

  • avatar

    I had an API warranty that paid 4x what I paid for it.
    I bought a USED Honda from a Saturn dealer, and got the warranty there.   Saturn told me they’d cover any repairs until API’s bankruptcy cleared and send the bills to the responsible company.
    My old Honda, though, took the cake for “not like it’s brethren” and required a LOT of work over 3 years.

  • avatar

    Did I say that I love my Accord??? I do. ’99 EX 2.4 liter, with stick. It sings. Maybe not like Mozart, but like Salieri to the Boxster’s Mozart. And when I read this stuff, I’m glad I didn’t buy my neighbor’s 3 series.

  • avatar

    In south Seattle they sell beautiful new BMWs in a beautiful new complex.

    In north Seattle, on Aurora Ave. North, lot after lot after lot overflows with the broken promisses.

  • avatar

    I was getting the oil changed in my 1998 328i at my local BMW independent shop. A woman had to sit down when she heard her X5 transmission needed $7,500 in repairs! Luckily, my 328 has been problem free for the five years I’ve owned it.
    If you are considering an after-market warranty (read: pre-paid service contract) go to independent mechanics who specialize in your make. Ask them about warranty service and which have paid up and which have not.  As with anything, do your research before buying

  • avatar

    Thanks to everyone who replied! (As Sajeev said, that’s not our house/cars in the photo.)
    I think the ‘rents realize they gotta dump the X5 eventually, before it becomes a cash sinkhole. Next question is: what SUV/CUVs are there that are actually worth a damn to drive like the BMW is?

    • 0 avatar

      They are all “worth a damn to drive”.   I think the bigger question for your parents at this point is ownership cost, in which case I’d suggest a Lexus RX or Hyundai Veracruz.   But anything is going to be better than a Bimmer.
      PS:  Good call to avoid the aftermarket warranty.  I worked in the car business in the early 1990s, and the only reliable warranties were those backed by the manufacturer.   But even those were expensive.    They made sense only for people obsessed with limiting financial risk.

    • 0 avatar

      Me thinks you need to write me a question for TTAC’s “New or Used?” column.

  • avatar

    You guys are extraordinarily judgmental. Does everyone think these pseudo-socialist thoughts when they drive by my house and peer into my garage?
    This is America. You could park your Porsche behind your double wide if you wanted to. Thank God for that kind of freedom. If someone else wants to put a Hyundai in the 12 car garage of their mansion, that’s OK too.
    As far as the X5 goes, sell. It’ll be a tough car to sell too but worth the trouble in the end. Believe it or not, maintenance costs for certain cars CAN be more than new car payments (or certified used).

    • 0 avatar


      This is a CAR site.

      If people could make out the headlights at night, in pitch black, from 3 miles away in heavy smoke and somehow see this car though trees and into your open garage door… as I can.

      It would be me.

      And stuffing a Porsche behind a dbl wide… (it better be a (911, not the boxster / Cayman, or the VW **cough** Cayenne or other bastard Panamera)

      As far as a Hyundai.
      They aren’t good enough to be in a 12 wide berth.. when they can sell on their merit alone.. and not for the warranty or their rip off badge designs… *scratch that* They wont ever be good enough.

  • avatar

    BMW is consistent. You do NOT buy the first production run. Much like Windows, the savvy wait for SP1, er, the first or second refresh. If you are buying used get the last year of production. Avoid autoboxes and the dealer as much as you can. The 3 is no more expensive than a normal car UNLESS you take it to the dealer for everything. BMWs have a lot of replaceable bushings (I call them golden grommets) that are not cheap at the dealer but can be done for half price outside. Meyle is your friend. To do otherwise is just to pay for your dealers yacht. Don’t buy a car that has been “lifetime” maintained. Replace oils and fluids. Find an honest indy mechanic -It is more involved than owning a Civic but it is not horrid. Of course I have 210k of regular 3 experience, not a first run x5 or m3r

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