John writes:
Sajeev, a buddy at work paid 26k for a 2006 530ix with 39,000 miles. The seller is a pretty, late 20s heiress who had a new Bentley in the driveway. She wanted 30k but took the cash. My buddy does not know anything about working on cars and hopes that it does not break before 150,000 mile like his parents old 5 series. He left message at local dealer asking about cost of extended warranty. They didn’t call back.
I tell him to go there in person, ask, then offer 2/3 and see what they say for factory CPO deal. Don’t take other than factory warranty – BMW as counter party. He thinks maybe not since its only two years left with any extended warranty, saying “so what, tires wear out, right?”
I say, “Yes. And heads warp and trannies stop shifting too.”
Sajeev replies:
Does your friend like sushi and overpriced drinks at a snobbish metro-lounge? Or champagne and caviar served beach side in Barbados? He had better, since he’ll be sweet-talking that “pretty heiress” into buying a BMW Certified Pre-Owned Warranty.
Or not. To be eligible, BMW’s CPO program requires the original owner to make the request during the factory warranty period. And, like most of us, I’m guessing that pretty heiresses won’t go out of their way to help your friend. After the BMW’s proceeds are posted to her bank account, of course.
If the cost of repairs is really a big deal, tell your friend to get a third party warranty and find a respected BMW mechanic outside of the dealer’s domain. Or give up when it becomes a money pit and buy a more cost effective vehicle. Either way, enjoy the Ultimate All-Wheel Drive Sedan in the meantime.
[Send your technical queries to mehta@ttac.com]
Well, Trabant can be fixed using a piece of wire. You mean that a BMW car cannot be fixed using the handyman’s secret weapon – duct tape? A friend of mine had his X5’s tranny go belly up
and it cost him 10 grand (Canadian). The tail light lens cost 700 bucks. Do they make translucent duct tape?
A used Bimmer out of warranty? Talk about living on the edge.
John’s buddy needs to find a girl friend that knows something about cars. Or an heiress that will buy him a new one.
I don’t recommend buying the warranty. A warranty is really a form of insurance, and a consumer should only buy insurance when one of two conditions is present:
1. He knows something the insurer doesn’t, i.e. that the BMW is about to fall apart in a way that most do not.
2. The risk of loss is so great that he cannot bear it. This is why parents buy life insurance — the risk of dying is very low, but if it does happen, your family is screwed.
I don’t see either condition applying here. The buyer doesn’t know anything the professionals who sell warranties at a profit don’t know. He has no advantage here.
And if he can pay $26K cash for a Bimmer, he should be able to handle the costs of repairs. The key will be finding a great, independent mechanic, but then we’d recommend that regardless, right?
Enjoy the Bimmer and save your money. No really, save it, because the thing will break, eventually….
Did the previous owner have the car properly maintained? Sometimes people with lots of money who keep their cars for short periods of time do little or nothing to take care of them.
CPO warranties are generally only available on used vehicles sold as CPO vehicles by authorized dealers. Is BMW different in this regard?
Oh yeah, and SherbornSean +1!
I would also argue against the extended warranty. They wouldn’t sell it to you if the costs were going to exceed the payments. You’d be better off dumping the amount you would pay for an extended warranty into a savings account.
That said, expecting 150,000 trouble free miles from a Bimmer is a bit optimistic. Expect at a minimum that you will have to do inpsection I & II (not too difficult to do by yourself), shocks, brake pads/rotors, cooling and steering hoses, thermostat, all fluids, potentially some suspension bushings, and some electrical problems. If you keep the fluids and filters changed and never, ever let it overheat the engine and tranny should be fine for well past 150K miles.
The important thing with a Bimmer is preventative maintenance. Look up the expected life of the major components in the vehicle on the forums and change those components then or a little before. Don’t wait for something to wear out and break before you change it, or else you’ll be dealing with collateral damage as well.
BMW may not make a perfect car but they are pretty good. Drive it and enjoy the ride, if something goes wrong buy another one.
39,000 miles is nothing. I’ve owned 3 BMW’s in a row that ran past thier warranty and have never had anything beyond normal wear and tear out of warranty.
If the BMW is an 06, he should have at least 1 year remaining on the factory warranty?
CPO cost (I think) is somewhere around $2400 for an additional 2 years beyond the original 4. With BMW, I know it is possible to add on CPO post-sale. There are plenty of 3rd party extended warranties out there. With only 39K on the odomoter, it probably wouldn’t cost him much if that’s the path he wanted to take.
I agree with ‘guyincognito’. Preventative maintenance. It’s still under the factory warranty, so go pay the dealership a visit.
There are several good aftermarket service agreements out there, you just have to know what you’re looking for and ask lots of questions about the coverage. Warrantech is a company that offers contracts under several different names, and from my experience with several of them, they usually offer good coverage. The most important thing is to make sure that the contract he chooses pays a decent labor rate —I’ve seen one that paid $65 an hour. Good luck with all that!— and list price on parts, just so it can be taken to a dealer if need be. He should also know that aftermarket service agreements only cover what’s listed on the policy, so whichever one he chooses should be read over well. He could get down the road and have a window regulator go south (On a BMW? No way!)only to find that he paid a couple grand for a glorified powertrain warranty.
Listen, the BMW dealer is not going to “certify” a used BMW purchased from an outside source. If you want a CPO warranty and guaranteed car, you should have purchased it from a BMW dealer.
CPO or not, the ultimate driving machine is also the ultimate maintenance nightmare. I just dropped off my 3-er for the 4 window regulator replacement in 2 years. Why are geniuses who can build world class power-trains can’t get right something even lowly Kias and Suzukis can. May be it is time Germans outsource electricals to Geely or Chery.
Warranties my ass tell me more about this heiress.
So wait a sec -this guy goes and finds an heiress with Bentley and instead of pursuing the real goal he drives off in her old Bimmer?
Had he played his card right he’d still have his $26k in his pocket, he’d be driving her Bimmer, she’d be paying the repair bills, and he could borrow the Bentley once in a while.
SherbornSean +2.
The rule of thumb is if you can afford the “loss”, then don’t buy insurance (eg extended warranty). Gotta remember that some statistical wonk actually ran the numbers….looked at past warranty data, failure rates, etc. and calculated a cost for the CPO program such that BMW will come ahead.
Granted you may get that one lemon…..but the odds say don’t buy the extended warranty. And BMW CPO extended may have a deductible (I think $50)….while looking at Audi CPO, the fine print said that Audi CPO has an $85 deductible…..which defeats the purpose of paying a premium for a CPO-certified used car. $85 deductible + the $2-$3 thousand premium for a CPO car can buy a lot of repairs at a good indy shop.
I’d premptively change all of the fluids (transmission, brake, oil, etc) even though it’s above/beyond the recommended maintenance schedule as you’ll be keeping the car for a long time.
Drifter, that’s a very good question. I would like to know why German car companies that can come up with such nice cars that drive so well can’t make them reasonably reliable, while Japanese have no issues with that.
I think he may be confusing the CPO Certified Pre-Owned warranty with an aftermaket warranty. If the car wasnt reconditioned and inspected by a BMW dealer you’re not going to get the CPO warranty.
Have him contact the Finance Manager at his BMW dealer and ask for recommendations for extended warranty coverage for non CPO cars.
If you have to worry about the cost of maintenance/repairs on a BMW, you shouldn’t be buying one.
By late 20’s, do you mean age, or date of birth? It could explain some of the decisions made.
@SherbornSean
Allow me to present a counterpoint, if only an anecdotal one. Like many here, I chose to forgo extended warranties until my ’84 Corolla threw a piston rod six months after it’s two year warranty expired, making me the proud purchaser of a new engine. And if I hadn’t bought an extended warranty (got it for half the asking price) on my POS ’95 Grand Caravan I would have been out something like $8K when the engine and transmission basically dissolved shortly after the regular warranty expired. I say John should get the warranty, either through BMW or elsewhere. It’s worth it IMHO.
I can’t speak to the longevity of the modern 5 series, but my father in law has a late 80’s 528e. The odometer quit working about 6 years ago, showing 240,000 miles. We’re estimating it to be well north of 300k by now. He drives it every day, still runs great, doesn’t even burn any oil.
Even if the new ones last only half as long, your friend should make 150k.
I’m sure someone will be calling him any minute to offer him an extended warranty because he is nearing the end of his factory one. I get at least 2 of those calls a day.
I agree with SherbornSean don’t get the extended warranty insurance and just save the money to pay for the actual repairs if they come up. Put the $4000 you just saved on the car in that little kitty also. By the time something major happens you will probably have enough money saved up to get another $26,000 BMW used. What was that thing new that sounds like a great deal.
drifter BMW is just doing the same cost cutting that GM has been doing for decades. They are bean counting parts in the name of profit. The money goes into the parts that are marketed and comes out of the bits people don’t see or thing about, especially since it was leased and on to a second owner by the time it fails. This just hasn’t caught up to them like it has GM.
Companies don’t suddenly start building crap window regulators after they have been making good ones for decades. Other than cutting weight out of that part their really is no rocket science in making that part after all these years. And they are not cutting out weight they are cutting out cost, look how fat the rest of the car is, a few ounces in the windows isn’t going to make a difference.
I don’t trust third party warantees. There are too many horror stories about such things, and too many shady companies that don’t care about their reputation.
I DO trust factory CPO warantees. The CPO programs remove much of the uncertanty from car buying, simply because the factory’s reputation is now on the line. And its the same with the CPO extended warantee.
It may be a bad deal as an insurance policy on a straight basis, but if you consider long tail risk, removing that is worth it.
It also depends on the cost: If its $1500 and transferable and adds 60K miles to the warantee? Sure.
If its $3500, nontransferable, and adds 30K miles to the warantee? Forgettaboutit.
I guess your friend doesn’t read auto blogs on the ‘net, because he didn’t already know that cars made by US and EU companies will have 10k in repairs before 30k miles, and the dealer will deny your warranty claim. Aren’t you aware that the cars made by our Asian-based bretheren will go 1 milllllion miles with just gas and a smile? Gosh.
Your buddy is so screwed. He will probably end up losing his house over this deal. Why in god’s earth didn’t he just buy a Camry? They have a sport package now I think.
Ach du Freakin’ Lieber Himmel. There is no indication the purchaser minimized his BMW purchase risk by performing a thorough due diligence investigation.
Good selection criteria are essential to a risk-free purchase. Before signing anything or paying money ask the seller for identification and proof of ownership. Acquire an official Used Vehicle Information Package (UVIP). Examine the owner’s maintenance records. Obtain CarProof and AutoCheck vehicle history reports. Engage a competent mechanic or inspection agency to thoroughly examine the vehicle specifically instructing them to report all evidence of abuse, ill-maintenance, scanner codes, and body or frame damage.
With reasonable preventive maintenance an extended warranty, and the very real risk weasel clauses will disallow claims, is not cost effective. Put the premium into a CD and pay for repairs as required.
A newish BMW soon to be out of warranty.
There’s a paradox somewhere in that.
When I bought my 07 Honda Fit, I refused the warranty. “That’s why I buy a Honda. If I wanted to buy a warranty, I would buy a Dodge.”
Then a friend bought a CPO 05 Acura TL. He’s a conservative type and bought the warranty. I thought “what a waste of money – nothing is going to happen to that car.” Then his autotrans began to cook its 3rd gear. Several thousand bucks for a new transmission, and I have rethought my position on these warranties.
So far so good on my Fit. But it is simple and I am not nearly as sure of myself as I used to be.
From what I understand, a person buying a BMW while still in it’s original warranty can still purchase a CPO warranty on said vehicle. They can also purchase the extended maintenance package, which will cover all maintenance until 6 years/100k.
A proper 6-speed BMW with the extended warranty and maintenance is a pistonhead’s near-dream. Everything is covered, except for tires.
Everything. Including the clutch. Windshield Wipers. Car Battery.
You can get such BMW’s for 25-30k with 25-40k miles on it and ~2 years of age.
Just saying :)
Joe
Cavanaugh – I have a 2006 Honda Civic SI with 65k miles on it.
I did not buy the warranty (which would have been around $1200 to extend part of my warranty, not bumper to bumper, to 100k).
The trans on these cars is not as good as it should have been, but a good dose of quality synthetic changed every 30-45k does the trick.
Honestly though, nothing has gone wrong and I’ve got $1200 to cover alot of stuff that COULD go wrong.
To your point: With a Honda, reasonable cost parts, and inexpensive quality labor, I’ll pay for the repairs myself. With a BMW, parts are very expensive and even independent labor isn’t cheap.
The CPO program as advertised by BMW is only available on cars purchased from the dealer. However, if you’re real friendly with your BMW dealer, they can “buy” the car from you, certify it, then you “buy” it back.
What Curwood said. The dealers have bonus schemes and CPO sales is most likely a part of that bonus scheme. The tricky part is finding someone at the dealership who realizes the benefit to them without them trying to sell you 4k worth of undercoating. The dealers have to pay for the CPO warranty so they will pass that on to you. You might have to throw them a couple bucks for the time and paperwork but it shouldn’t be too much. It most likely would be a pain the azz though.
I’ve gotten two of those god-awful warranty calls so far this morning…send them anyone’s way??? ;)
JoeO – what are these transmission problems on a Civic Si that you wrote about? That’s a car I’m interested in and is it safe to say that the transmission might be a weak link in the car?
The extended warranty is like an insurance and the seller of said insurance will always come out ahead. Keep your money and pay for any repairs as needed. The same goes for BMW service contracts.
So, as my name states, this is MyBimmer we’re talking about here.
@Redbarchetta – the original sticker was almost 60k, it had sport, premium, cold weather, navigation, and xenon headlamps.
@Gardiner Westbound – I did my homework for months before making a purchase. She kept the car in impeccable condition, had complete service records at my local BMW dealer who I spoke with, and I ran the VIN
Sad it depreciated 10k per year since ’06 but the car looks brand spanking new… which is what i was going for. I did my research and I’m doing the same for a warranty…it sounds like I’m leaning towards no based on what I’ve research as far as when parts need to be replaced. Even an extended warranty will be expired by the time i’ve taken this car 60k miles.
John,
tell your buddy to join a few of the BMW owner forums on the net, where he can search information specific to his E60’s maintenance requirements from other owners.
Most owners agree that the dealership Inspection I and II, fall painfully short of the requirements of proper maintenance. Remember, it’s really only an inspection with an oil change and air filter.
For example, at 40k, I’d change the brake fluid, differential oil, transmission fluid, and radiator coolant. None of these items are addressed in BMW’s Inspections, yet ultimately impact the longevity of the powertrain.
As far as replacement parts, there are several great internet companies that sell the identical German OEM parts and fluids at much better prices then what he’ll find at a dealership.
If he is passionate about his purchase and wants to maintain it properly (exceeding BMW’s recommendations) he’ll be very happy with the car. If not, in two years you’ll find him on TTAC bitching about BMW.
Forget the warranty and forget the dealer. You need a good BMW mechanic. Look on forums and ask around. Preferably a mechanic who used to be a dealer mechanic and opened his own shop. But a specialist is what you need. In the end you will pay much less than for a warranty. Make your own warranty, open a bank account just for your car with say $300, make deposits monthly ($75/month should do fine) and by the time a needed repair comes up your account should cover it.
And what Johnny said. Don’t skimp on the maintenance.
@MyBimmer
I own the previous version of your car.. a ’98 528i.
I bought it from a guy who leased it AND bought the CPO extended warranty. I guess he thought he’d own it after his lease ran up.
I bought it in 2002 so I had a few years of coverage. I had one repair during that time that would have cost me about $800 (it was an idle control that went bad). The remaining repair work needed all happened after the warranty expired.
Based on my experience, I wouldn’t advise buying the CPO warranty.
In warranty:
BMW = Bavarian Motor Works
Out of Warranty:
BMW = Break My Wallet
“…brake fluid, differential oil, transmission fluid, and radiator coolant. None of these items are addressed in BMW’s Inspections…”
Funny – the brake fluid and radiator coolant are addressed on my BMWs Inspection II and have been since I bought my 1st 328i in 1998. BMW don’t require changing the transmission fluid, but my Service Advisor suggested it when the 98 hit 60K miles.
The BMW service intervals consist of three main service groups.
Oil Service: Engine oil and filter change and additional preventative maintenance services.
Inspection I: Major vehicle maintenance as specified in your Service Booklet.
Inspection II: Additional major vehicle maintenance as specified in your Service Booklet.
Also, there are additional services that are required annually, which consist of: (These are excluded from the main service groups.)
Brake fluid flush
Coolant fluid flush
Oxygen sensor replacement
I’ll admit to nothing being said or required on the differential oil, but wonder how many Detroit or Japanese vehicles ever have their differntial oil changed…
vento97 :
May 27th, 2009 at 11:40 am
In warranty:
BMW = Bavarian Motor Works
Out of Warranty:
BMW = Break My Wallet
To add to this from a German point of view:
BMW = Bring mich in die Werkstatt (bring me to the repair shop)
That said, I have a 520i from end of 2006, 39.000 km. No problems. Altogether, BMW has a gread reputation in Germany. Why everbody is so sure that the BMW will break down earlier than any other car, is unclear to me.
There seems to be a lot of anecdotal evidence against keeping a modern (post 2002) luxury car past warranty. That goes against the whole “get what you pay for” concept of quality and consumerism.
Have there been any legitimate studies supporting the claim that, if you want to keep a car longer than 100,000 miles, you should avoid an expensive ($30K+) car?
The BMW service intervals consist of three main service groups.
Oil Service: Engine oil and filter change and additional preventative maintenance services.
Inspection I: Major vehicle maintenance as specified in your Service Booklet.
Inspection II: Additional major vehicle maintenance as specified in your Service Booklet
That does sound impressive and thorough. However, the BMW Inspections for my E39 were laughable, and clearly designed as a revenue source for the dealership.
Also, there are additional services that are required annually, which consist of: (These are excluded from the main service groups.)
Brake fluid flush
Coolant fluid flush
Oxygen sensor replacement
Lokki, are you saying that BMW’s (under warranty) will have the above proceedures done annually. Never knew.
For the love of God please commit this to memory.
The spelling is Warranty and the plural is Warranties.
Not warrenty or warrantee or warantey, et al.
The extended warranty is like an insurance and the seller of said insurance will always come out ahead.
Not exactly. The seller of said insurance will come out ahead on the total pool of policies sold, but not on every single one.
Insurance is a risk management tool. You risk money when you buy it, and you risk money when you don’t buy it. Choose. But whatever you do, don’t base your decision on predictions of whether or not your BMW will ever break, because nobody knows.
I bet the buyer was inspecting her Air bags instead of the Bimmer’s.
When u buy CPO u end up paying 10 or 15 grand more than what u pay retail.
As the used car get treade in the stealership will have to go thru it & see if it worth selling it as CPO. The less desirable ones will go to auctions or sold to small dealers.
How true it is wealthy car owners who usually have 2-3 cars, why do they have to worry about maint or Oel change. Is more important with their social lifes.
So the oel change or maint can always wait.
If they know they will sell or trade in spring and why on earth to waste a couple of hundred bucks right now ( after the labour day wknd )
Iwouldn’t.
I would also argue against the extended warranty. They wouldn’t sell it to you if the costs were going to exceed the payments. You’d be better off dumping the amount you would pay for an extended warranty into a savings account.
This is an incorrect statement. The actual fact is that they hope that the average per car cost is less than the premium and profit. If they price wrong or they get too many claims the costs will exceed premiums, and many carriers go out of business due to improper pricing or too many claims.
Cars are too expensive to repair today without a warranty. I would buy a good inclusive warranty since the odds are you will use some of the coverage and also avoid a catastrophic loss.
As an example, I bought an Audi Allroad in 07 with 32k dealer serviced miles. I bought a 3 year 36,000 mile inclusive warranty for $1,699. I have now had $13,000 in repairs and all have been covered at $75 per repair, plus an extra $800 for the tranny due to a too high dealer quote. Makes the warranty cost look like peanuts.
“JoeO – what are these transmission problems on a Civic Si that you wrote about? That’s a car I’m interested in and is it safe to say that the transmission might be a weak link in the car?”
I’m not Joe, but I also own an 06 Civic Si (54k miles), and I think I know the kind of transmission problems he’s referring to. Basically, the third gear can get notchy, especially when the car is cold. Engagement isn’t as smooth as it could be, and sometimes you’ll put it into third, and it sort of feels like it’s in, but not quite, and when you let off the clutch, you either grind or pop back out of gear. Second gear could also give you a slight grind if you run first alllll the way up to redline and give it a very quick shift.
These problems have been somewhat addressed on subsequent Si’s with a new transmission fluid and revised synchros. They’ve even put out a service bulletin for those experiencing the problem, though I havn’t taken them up on it, as it involves a transmission rebuild for a problem I barely have.
What I have done is replace my transmission fluid every 30k or so with AMSOIL MTF, and that has done absolute wonders for me. I havn’t had 3rd pop out once since then, and notchiness is much improved. I’ve heard people have used GM Synchromesh to similar effect. I’ll just keep refilling with AMSOIL every 30k, and I don’t expect any more problems out of this transmission.
This isnt you dad’s old 5er. According to the E 28 guys I hang with who have newer models, sometime between now and 100k you may as well replace the entire cooling system. WP, radiator, hoses and expansion tank. If the car is an automatic, get a drain and filter soon.
My best friend as a safe driver and a very good driver. He bought a 2003 540i with the sport package and under 10k miles on it in 2005 So far he has…
– Replaced the vapour barriers twice
– replaced the sun roof 3 times
– replaced two A/C compressors
– replaced the steering column once or twice
– replaced a window motor or two
He probably has 45k on it now. It has had extended warranty coverage – it is a BMW Certified Pre-Owned (leased) vehicle.
It’s a Bimmer. BUY THE WARRANTY!!!!!!!!!!!!!!!!
I own an Alfa Romeo as a daily driver, which means I more often than not win the “biggest repair bills” contest. I would suggest that the owner do what I do: put about a hundred bucks into a separate bank account every month, to pay for when the car needs parts or (god forbid) shop time for a problem you yourself cannot handle in your garage. If the car predictably turns into a drama queen, you can handle it; and if it turns out to be an excellent example of the breed, you have a sizeable chunk of change to throw on top of your budget for its eventual stablemate/replacement.
As others have said, there’s a lot of little crap on these modern German luxury cars that dies way before it should.
The CPO warranty is nice, unless your automatic transmission dies … oh let’s say 4 months after it expires. (Ask me how I know this). And your automatic transmission will die.
Have him follow the advice here on the “extra” maintenance items. Highly recommended to join the BMWCCA and get the “old school maintenance” schedule from their Tech Talk and follow it.
I’ve reached the point where I’ll only lease German cars, and get rid of them at/before the warranty expires. Though I still have a 135i with minimal options and a proper manual in the back of my head as an actual purchase.
For anyone interested, Csaba Csere has a pretty good article on CPO 2007 BMW 335i:
http://www.caranddriver.com/reviews/hot_lists/high_performance/features_classic_cars/certified_pre_owned_2007_bmw_335i_feature