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      01-20-2022, 01:36 PM   #23
Waterbelly
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Originally Posted by jimbethesda View Post
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Originally Posted by HorsePower View Post
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.
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…
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      01-20-2022, 01:47 PM   #24
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With all of our cars spending so much time in Quality Control, why would we be concerned about long term issues? hahahhaha
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      01-20-2022, 01:50 PM   #25
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Quote:
Originally Posted by Waterbelly View Post
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). 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.
Valid point, but not relevant for most of the warranties. BMW factors that in. You'd still get it fixed if it was out of warranty, correct? When BMW prices the warranty, they include the missed margin on you not buying retail.

So, they factor in the $75 for the actual expense of the repair PLUS the lost $75 they would have made if you paid retail. Net-net, this made no difference. You might think you essentially paid wholesale for the repair, but you paid for it with the price of the policy. The only way this works, is if people leave things broken if it's out of warranty, so getting wholesale is better than nothing. There are certainly some things people don't get fixed if out of warranty, but this doesn't have a material effect on the math.

You could argue the wheel warranty is one of those policies where your argument is valid. Most people leave the curb rash alone unless they paid for a warranty. BMW prices this accordingly.

The main extended warranties, no way this wholesale/retail difference makes a material difference.
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      01-20-2022, 03:23 PM   #26
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I have enjoyed better numbers than those posted in that other thread, but only from my local, great-relationship dealer, at the time of new car purchases. For an out-of-state, no-relationship deal offered to anyone with an internet connection, to me those numbers seem pretty solid (if those are G8x pricing).

BMW hasn’t ever had (in my experience) the type of race to the bottom ESC pricing from a few dealers nationally who get the word out on forums, and then also erode local dealers’ ability to hold the line when a forum-educated buyer walks in. In contrast to many other manufacturers, where I’ve enjoyed 50-75% discounts off of MSRP for ESCs (one of which has paid out five figures in repairs - making up for basically every other ESC loss I’ve ever taken, and then some.)

Don’t just blindly follow the don’t-buy-ESC/use-a-savings-account camp without thinking through your own financial picture, discipline to not spend that money elsewhere, and risk tolerance. If you get an ESC at the right, discounted price, they can make a lot of sense. And each time I’ve sold a car and terminated the warranty for my pro-rated refund (usually less $50 admin fee), I attribute the minimal financial loss to money well spent as a hedge against a huge, modern-era-car off-warranty repair.
Is ESC Extended Service Contract? Cuz that's NOT what we're discussing, is it?
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      01-20-2022, 03:40 PM   #27
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Is ESC Extended Service Contract? Cuz that's NOT what we're discussing, is it?
Yes it is, and yes it is. What most people think of as extended warranties, are not warranties at all. An extended service contract (also sometimes referred to as an ESP), while it may function like an extension of the bumper-to-bumper limited warranty more or less, is not a warranty. It’s a contract between the issuer (often a special-purpose-entity division of the manufacturer set up for that purpose) and the customer, whereby the issuer agrees to fix/replace certain covered items in the event of certain covered events. Legally very different, even if to the average consumer it functions in the same way.
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      01-20-2022, 04:05 PM   #28
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Is ESC Extended Service Contract? Cuz that's NOT what we're discussing, is it?
Perhaps you’re confusing this type of ESC with the pre-paid maintenance plans like ultimate care plus? Similar concept, albeit markedly different function. In the ESCs this thread is discussing, the agreement is, for example, if your heater core breaks before the time/mileage is up, contract issuer will replace it (parts and labor). In the prepaid maintenance contracts, the analogy would be if your brakes wear out before the time/mileage is up, they’ll replace them.
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      01-20-2022, 04:13 PM   #29
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Extended Warranties are basically insurance. The original purpose of insurance was to protect you from a catastrophic financial hit but companies realized over the years that many will buy insurance for just about anything but it rarely makes sense to purchase it.
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      01-20-2022, 05:02 PM   #30
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if it hasn't been posted above we blow them out for forum members no matter what state you are in. follow the link below!

https://f30.bimmerpost.com/forums/sh....php?t=1670964
+1. I purchased from Steve Thomas while being on the East Coast. Christine was able to make the process very quick and simple. Warranty worked as if I purchased it locally (without being $1500 more I was quoted for my 340i at the time).
Thanks! I forgot about this offer.
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      01-20-2022, 07:05 PM   #31
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if it hasn't been posted above we blow them out for forum members no matter what state you are in. follow the link below!

https://f30.bimmerpost.com/forums/sh....php?t=1670964
Thanks. I just sent an email a few minutes ago.
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      01-20-2022, 08:36 PM   #32
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Thanks. I just sent an email a few minutes ago.
awesome she is usually super prompt so if you dont hear back by noon tomorrow, she may have already left today, then shoot me a buzz as she may have missed your email it rarely happens but it does and we dont want to leave you or anyone else hanging
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      01-20-2022, 09:55 PM   #33
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Originally Posted by Jproos View Post
Thanks. I just sent an email a few minutes ago.
awesome she is usually super prompt so if you dont hear back by noon tomorrow, she may have already left today, then shoot me a buzz as she may have missed your email it rarely happens but it does and we dont want to leave you or anyone else hanging
Super prompt seems to be an understatement. She's responded twice already. Give that lady a bonus or something.

Thanks
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      01-21-2022, 07:25 AM   #34
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Buy the car now and enjoy it with the warranty and maintenance service it comes with. Worry about the extending it later. You are covered now and can add that warranty later before the current one is expired. Put the money aside or invest it. If you get the car and it gets totaled the week after, then you would have bought that warranty for nothing. Even if you can cancel the extended warranty later, it's a hassle and you would have given them a free loan for nothing.
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      01-21-2022, 08:00 AM   #35
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Super prompt seems to be an understatement. She's responded twice already. Give that lady a bonus or something.

Thanks
Awesome! Yea she is the best, we are grateful to have her Have a great weekend my friend
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      01-21-2022, 08:12 AM   #36
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Quote:
Originally Posted by MIM5 View Post
Buy the car now and enjoy it with the warranty and maintenance service it comes with. Worry about the extending it later. You are covered now and can add that warranty later before the current one is expired. Put the money aside or invest it. If you get the car and it gets totaled the week after, then you would have bought that warranty for nothing. Even if you can cancel the extended warranty later, it's a hassle and you would have given them a free loan for nothing.
Good advice, but know that there is apparently a price increase once the car hits 20k miles. For my car, she said it was about $1k.
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      01-21-2022, 09:37 AM   #37
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Good advice, but know that there is apparently a price increase once the car hits 20k miles. For my car, she said it was about $1k.
If you’re buying from your selling dealer together with the car, the best deals are also typically had at time of delivery. Although a few times I’ve been lucky to go in and buy on the last day of a slow month, when the F&I office just wants to move another few products.
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      08-16-2022, 08:27 AM   #38
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Did BMW drop the Extended Service Agreement? I no longer see the various options listed in My Garage. Before it showed the term/miles options and pricing.
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      08-20-2022, 12:12 PM   #39
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When I called my Ins agent to get the rate on my soon to arrive M4, they quoted me a rate that included 7yr/100k extended warranty which added about $60 to a 6mth policy. The option to add was only on a new car policy, can't add it down the road, cancel anytime. Not sure if they would play some shenanigan's and raise the rate as time went on, they certainly would have that option every 6mths. Wondering if anyone has ever gone this route?
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