Quote:
Originally Posted by jimbethesda
Quote:
Originally Posted by HorsePower
Huge money-maker at full price (or anything close to it). The reality is that the vast majority of auto consumers - even ones who spend a few minutes googling before they walk in the dealership, or ask their Uncle ___ who always buys new cars how to get a good deal - aren't as well-informed as they may think they are. Overall that's why these products are offered - to essentially take advantage of the vast majority of buyers.
Most casino players lose. The math makes it so. But true professional poker players, for example, or card-counters at blackjack, are seeing different odds. It's the same thing here, for the small subset of consumers who are able to buy F&I office products at advantageous pricing.
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Nope. The margins are so high, there is room to reduce it. Your notion that BMW sells it at a loss if you are a good negotiator, is wrong.
But, yeah, if it gives you peace of mind, go for it. No objections here. Just don't think you're smarter than BMW and can buy it at a loss. |
BMW's costs are wholesale, consumers costs are retail.
I buy a warranty for $100.
It covers a repair that would have cost me $150 (retail).
The wholesale cost of the repair was $75 for BMW.
I saved $50. BMW made $25 (instead of $75) plus some time value of money. If you extend to after 36 months, when cars start leaving dealership service, this can make sense for BMW.
Where there are differences in costs, middle ground can be had. It is possible for BMW to make money and for you to save money. Not a zero sum game.
I don't personally purchase extended warranties. But your black and white "math" view is misleading. "Insurance", broadly speaking, is a massive industry. Just watch TV commercials during a football game…