[matters1776]

Hi! I am super happy. I just bough my first car. Its a mint condition black 2013 x5 . It has 55,000 miles. the manufacture's warranty ended at the 50,000 mile mark.

I wanted to get an extended warranty for the vehicle. I was told I cannot get a manufacture's warranty on it because it expired, so i need to go through a third party. Is this true?

I have found a couple places that are third party by calling some genuine bmw dealerships. Are there any third party extended warranty companies you recommend? Is it worth it to go through a third party? So far, the two places which have given me quotes are AUL and assurant. They say I can bring it into any BMW dealer, as long as I pay the 100 deductible.

I have been quoted around 3900 (AUL) and 4900 (assurant) for 3 years / 35,000 miles.

I am new to all this so I wanted to get some of your opinions. I deeply appreciate your time.

Thanks,
Matthew

[TheMidnightNarwhal]

Originally Posted by matters1776

Hi! I am super happy. I just bough my first car. Its a mint condition black 2013 x5 . It has 55,000 miles. the manufacture's warranty ended at the 50,000 mile mark.

I wanted to get an extended warranty for the vehicle. I was told I cannot get a manufacture's warranty on it because it expired, so i need to go through a third party. Is this true?

I have found a couple places that are third party by calling some genuine bmw dealerships. Are there any third party extended warranty companies you recommend? Is it worth it to go through a third party? So far, the two places which have given me quotes are AUL and assurant. They say I can bring it into any BMW dealer, as long as I pay the 100 deductible.

I have been quoted around 3900 (AUL) and 4900 (assurant) for 3 years / 35,000 miles.

I am new to all this so I wanted to get some of your opinions. I deeply appreciate your time.

Thanks,
Matthew

When I was still ineterested in warranty the dealer would offer options in house. But it was way to expensive so I just didn't get one.

[Run Silent]

Originally Posted by matters1776

Hi! I am super happy. I just bough my first car. Its a mint condition black 2013 x5 . It has 55,000 miles. the manufacture's warranty ended at the 50,000 mile mark.

I wanted to get an extended warranty for the vehicle. I was told I cannot get a manufacture's warranty on it because it expired, so i need to go through a third party. Is this true?

I have found a couple places that are third party by calling some genuine bmw dealerships. Are there any third party extended warranty companies you recommend? Is it worth it to go through a third party? So far, the two places which have given me quotes are AUL and assurant. They say I can bring it into any BMW dealer, as long as I pay the 100 deductible.

I have been quoted around 3900 (AUL) and 4900 (assurant) for 3 years / 35,000 miles.

I am new to all this so I wanted to get some of your opinions. I deeply appreciate your time.

Thanks,
Matthew

As someone who spent nearly 20 years as the director of sales and finance operations for a large dealer group, I can wholeheartedly recommend that you do not purchase an extended warranty.

We have to look at the cost of goods sold. That’s my cost to produce a widget called a warranty. If I’m in business, I also have overhead because I have to pay secretaries, people to process the claims on these warranties, rent a building, and so I have to add money to that cost to cover my overhead. Hypothetically, I want to make a profit, so I need to add that on there, and I’m probably going to have to get someone to sell this warranty. As much as 50-80% of the price of the warranty—depending on the warranty company—goes to commissions back to the dealer. So I have to pay a commission, and that’s in my cost. If you add all of that up, now you have the price—divided by 1,000 or whatever—of the warranty. It’s what “we”—as a warranty company—charged you for it.

Really, all you’re getting coverage for is the actual statistical probability of the breakdown, but you’re paying for overhead profit and marketing in addition to that. Were you to save the money and you have an average automobile that breaks down an average number of times, you’re going to come out way ahead financially. If it breaks down more than average, then you won’t. But if it breaks down more than on average, then the warranty company goes broke. In other words, they know they’re not going to have to pay out all the money they take in on warranties. Hello! That’s how they make a living.

Never buy extended warranties. There will be several posts after mine with folks telling you how they saved thousands in repair costs by getting the extended warranty. Some will be telling the truth, some will be full of crap. But the bottom line is that if the warranty company didn't come out ahead way more than you do, then they would be broke. It's a bad investment.

Also, If you buy a warranty from a company, and they go bankrupt, you don’t have a warranty anymore.

Now - with all that being said, if I absolutely cannot talk you out of getting one, then my recommendation on 3rd party warranties is to only purchase one from a dealer and I would only recommend Fidelity warranties or any other JM&A product. Any dealer, including most BMW dealerships will sell you one. But please, just don't.

[Efthreeoh]

Originally Posted by usshelena725

As someone who spent nearly 20 years as the director of sales and finance operations for a large dealer group, I can wholeheartedly recommend that you do not purchase an extended warranty.

We have to look at the cost of goods sold. That’s my cost to produce a widget called a warranty. If I’m in business, I also have overhead because I have to pay secretaries, people to process the claims on these warranties, rent a building, and so I have to add money to that cost to cover my overhead. Hypothetically, I want to make a profit, so I need to add that on there, and I’m probably going to have to get someone to sell this warranty. As much as 50-80% of the price of the warranty—depending on the warranty company—goes to commissions back to the dealer. So I have to pay a commission, and that’s in my cost. If you add all of that up, now you have the price—divided by 1,000 or whatever—of the warranty. It’s what “we”—as a warranty company—charged you for it.

Really, all you’re getting coverage for is the actual statistical probability of the breakdown, but you’re paying for overhead profit and marketing in addition to that. Were you to save the money and you have an average automobile that breaks down an average number of times, you’re going to come out way ahead financially. If it breaks down more than average, then you won’t. But if it breaks down more than on average, then the warranty company goes broke. In other words, they know they’re not going to have to pay out all the money they take in on warranties. Hello! That’s how they make a living.

Never buy extended warranties. There will be several posts after mine with folks telling you how they saved thousands in repair costs by getting the extended warranty. Some will be telling the truth, some will be full of crap. But the bottom line is that if the warranty company didn't come out ahead way more than you do, then they would be broke. It's a bad investment.

Also, If you buy a warranty from a company, and they go bankrupt, you don’t have a warranty anymore.

Now - with all that being said, if I absolutely cannot talk you out of getting one, then my recommendation on 3rd party warranties is to only purchase one from a dealer and I would only recommend Fidelity warranties or any other JM&A product. Any dealer, including most BMW dealerships will sell you one. But please, just don't.

Man, what a great post. You've stated before in other posts you were in the automotive dealership business, so I find what you've said here to be refreshing. Thank you for that.

OP, Automotive extended warranties are nothing more than an insurance policy. While having insurance is a good thing in many instances, such as health insurance, life insurance, homeowners insurance, automobile liability insurance, etc. Most automotive repair insurance plans are financially not worth the funds used to buy them. Worst off, as a particular model of automobile is produced over time, the Warranty companies get better statistical data regarding failures of the particular model and tailor the cost and coverage limits of the policy accordingly so they come out financially ahead. If you are a first adopter of a new model that is not very reliant on the manufacturers other past products (i.e. parts sharing), it make some sense, just based on the unknowns of the new model, but automotive companies rarely produce a complete "clean sheet" design; your X5 is not one such vehicle.

With insurance polices it all comes down to what level of self insurance you can tolerate. For the types of insurance I mentioned above, all of them are worth paying for because normally compensated people can't afford a $100,000 operation to save their life, or pay to rebuild their home if it is destroyed. For you, you need to decide how much funds you can set aside for repairing the X5. If you are going to pay monthly for the extended warranty policy, it is better just to save the money yourself and keep in a bank account where you can not readily access the funds (if the discipline of saving money is difficult for you).

And this is not a flame, but owning a BMW is not an inexpensive proposition. If a person goes in with a BMW purchase, especially a used BMW, and is relying on an extended warranty for maintenance and repair because they find it financially stressing to maintain the vehicle, then the BMW brand probably was not their best choice.

If you insist on buying a warranty policy, look very very close at the details of what IS covered and what IS NOT covered. If anything is not in either of those two lists, then be suspect of the policy.

My 2 cents.