[Jproos]

Anybody know what sort of discount to seek on extended warranties? I'm thinking 15% or so is reasonable.

I'm talking about on a new X3 M40i, if it helps.

Just looking for a rough idea of the % discount people might have gotten

Thanks!

Sorry, I see I posted to the wrong forum. Will fix as soon as possible.

Attached is the sort of thing I'm talking about. They cover some wear items and extend the existing warranty. I don't want to get into arguments about whether they make sense to buy in the first place. I'm looking to see what sort of discounts people have been getting, if anyone has information on that.

Thank you for any help you can give!


I've since learned those aren't warranties. I misunderstood them.

[G30 B58]

https://f90.bimmerpost.com/forums/sh....php?t=1890822

Long story short. Send multiple emails or use a good known existing dealer fro a discount

[chicagoguy0822]

Originally Posted by G30 B58

https://f90.bimmerpost.com/forums/sh....php?t=1890822

Long story short. Send multiple emails or use a good known existing dealer fro a discount

That link was helpful. Thanks. Quick question, when I see prices for 72 months/100k miles for $6K, is this additive to the 4 years/50K miles? Am I paying for 2 additional years and 50K miles or do you add the 72/100 on top of the 4/50?

[jimbethesda]

Originally Posted by chicagoguy0822

That link was helpful. Thanks. Quick question, when I see prices for 72 months/100k miles for $6K, is this additive to the 4 years/50K miles? Am I paying for 2 additional years and 50K miles or do you add the 72/100 on top of the 4/50?

Not additive.

You're better off not buying extended warranties, ever. Put the money you would have spent on it into a savings account.

BMW (and every other seller of warranties), prices it so that, on average they make money. A LOT of money. So much so that the dealerships have a lot of margin to play with too.

Might there be one car during your whole lifetime of car ownership that will cost you more to repair than the warranty costs? Sure. But no way will you spend more for repairs than the costs of the warranty looking at all your car purchases.

[SpeedyATL]

Here is christine's email: cnewman@stevethomasbmw.com

Her price is certainly better than MSRP, but something tells me there is a better deal to be had somewhere....

I don't think Jim (^) is wrong (they are a business, in business to make money), but for peace of mind (which has some value to me) and if I were planning to keep my car for the full 7 years, I'd probably do it anyway, especially if I could find a better deal than Christine is offering. All of the electronics in modern cars scare me from a cost perspective, not to mention the disposable nature of the current BMW models.

[jimbethesda]

Originally Posted by SpeedyATL

Here is christine's email: cnewman@stevethomasbmw.com

Her price is certainly better than MSRP, but something tells me there is a better deal to be had somewhere....

I don't think Jim (^) is wrong (they are a business, in business to make money), but for peace of mind (which has some value to me) and if I were planning to keep my car for the full 7 years, I'd probably do it anyway, especially if I could find a better deal than Christine is offering. All of the electronics in modern cars scare me from a cost perspective, not to mention the disposable nature of the current BMW models.

To each, there own. My piece of mind is holding on to my money, and not buying things with an expected value of less than 0.

If you're that concerned about a possible high repair cost, I would consider a less expensive car.

Just my $.02.

[HorsePower]

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.

[HorsePower]

Originally Posted by jimbethesda

To each, there own. My piece of mind is holding on to my money, and not buying things with an expected value of less than 0.

If you're that concerned about a possible high repair cost, I would consider a less expensive car.

Just my $.02.

I’m not sure the expected value is negative, if you get sufficient discount up front. At MSRP, I would agree with you.

As to your second statement, many of us value predictable cash flow/expenses, and are willing to essentially pay an insurance premium (in concept) to realize that comfort. Even those people on this forum who can (and do) often buy these cars outright with a personal check.

The answer to every thread can’t be, if you’re thinking about your financial health, buy a cheaper car.

[jimbethesda]

Originally Posted by HorsePower

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.

Good point. I still think it's better to work on your financial picture by being more disciplined, but some aren't able to. Saving money by not buying these things are a good start.

These products are such a huge money maker for BMW and their dealers (and on the flip side, a huge money waster for the purchaser). In normal times (not now when dealers are selling for full MSRP to $20k over), the dealerships make more money on extended warranties, maintenance plans, wheel & tire warranties, etc. than they do on the actual car. And that's after BMW makes a tidy profit too!

Those finance guys/gals are the worst too. They scare you to get you to buy. The worst part of buying a car, for sure.

[jimbethesda]

Originally Posted by HorsePower

I’m not sure the expected value is negative, if you get sufficient discount up front. At MSRP, I would agree with you.

Not true. BMW sets the price to the dealership, the dealership then marks it up. You're saying if the dealership reduces the price, the expected value is positive? That means, BMW is selling the warranty to the dealerships at a loss. Or the dealership is pricing it below their cost from BMW? No way. They have access to all the repair data and price it according.

Originally Posted by HorsePower

As to your second statement, many of us value predictable cash flow/expenses, and are willing to essentially pay an insurance premium (in concept) to realize that comfort. Even those people on this forum who can (and do) often buy these cars outright with a personal check.

Ok, still worth rethinking this. Cash flow is consistent if you started a warranty account. Every time you bought something, you put what the warranty would cost into that account. Use that account for out of warranty expenses. You'll be glad you did over time.

Originally Posted by HorsePower

The answer to every thread can’t be, if you’re thinking about your financial health, buy a cheaper car.

It's not, agreed.

[HorsePower]

Originally Posted by jimbethesda

Good point. I still think it's better to work on your financial picture by being more disciplined, but some aren't able to. Saving money by not buying these things are a good start.

These products are such a huge money maker for BMW and their dealers (and on the flip side, a huge money waster for the purchaser). In normal times (not now when dealers are selling for full MSRP to $20k over), the dealerships make more money on extended warranties, maintenance plans, wheel & tire warranties, etc. than they do on the actual car. And that's after BMW makes a tidy profit too!

Those finance guys/gals are the worst too. They scare you to get you to buy. The worst part of buying a car, for sure.

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.

[jimbethesda]

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.

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.

[vj123]

Originally Posted by HorsePower

I’m not sure the expected value is negative, if you get sufficient discount up front. At MSRP, I would agree with you.

As to your second statement, many of us value predictable cash flow/expenses, and are willing to essentially pay an insurance premium (in concept) to realize that comfort. Even those people on this forum who can (and do) often buy these cars outright with a personal check.

The answer to every thread can’t be, if you’re thinking about your financial health, buy a cheaper car.

I have bought OEM extended warranties for some of my previous vehicles. Shopping around, i got a substantial discount on those warranties and would consider one for a G80 if i come across one. Personally, it would make sense considering the amount of technology which is being used in the current vehicles and also if one is planning to keep the vehicle for a while. I dont mind paying that extra considering the peace of mind which it brings in.

Pay cash or look else ware blanket comments might not be applicable in each and every scenario.

[HorsePower]

Originally Posted by jimbethesda

Not true. BMW sets the price to the dealership, the dealership then marks it up. You're saying if the dealership reduces the price, the expected value is positive? That means, BMW is selling the warranty to the dealerships at a loss. Or the dealership is pricing it below their cost from BMW? No way. They have access to all the repair data and price it according.


Ok, still worth rethinking this. Cash flow is consistent if you started a warranty account. Every time you bought something, you put what the warranty would cost into that account. Use that account for out of warranty expenses. You'll be glad you did over time.



It's not, agreed.

First point - with many ESCs, the pricing is underwritten as to a broader pool of models/options. For example, pricing doesn’t change for upgraded wheels, even though the wheels are more expensive to replace. Real life example - wheel and tire plan on my z06. I paid the same sub-$1,000 deal that someone buying an ordinary Chevy would have paid. Picked up something like 5 screws in one summer. Each time, the run flat got replaced. They lost thousands. Anyone could see their expected value was negative on their end, and positive on mine. I firmly don’t believe that BMW or anyone else underwrites the pricing based on each specific car and options selected. (That type of community underwriting has this effect across many products, such as health insurance too).

As to your second point, if I had done what you suggest, I’d be at a lifetime loss, without question. My 2016 duramax made sure of this. Is that rare? Maybe. But my personal experience is that negotiating heavily, and buying, ESCs makes sense for me personally. And it might for others too.

[HorsePower]

Originally Posted by jimbethesda

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.

There is one thing in my thinking, that you’re missing here. I’ve said it above, inherently, but admittedly wasn’t clear enough. I’m saying that factoring in the comfort one can get from a hedge such as this, together with negotiating the price, can make buying an ESC a positive expected value transaction for a given buyer.

We are sort of saying the same thing. If I ascribed $0 value to my comfort of knowing that repairs on my G8x will be covered with no deductible for the next 7/75k, then yes, perhaps even at the very low price I paid for the ESC, the actuarially-priced number would still beat me. But I don’t ascribe $0 to that comfort. So for me, I firmly believe I made the right decision.

[jimbethesda]

Originally Posted by HorsePower

First point - with many ESCs, the pricing is underwritten as to a broader pool of models/options. For example, pricing doesn’t change for upgraded wheels, even though the wheels are more expensive to replace. Real life example - wheel and tire plan on my z06. I paid the same sub-$1,000 deal that someone buying an ordinary Chevy would have paid. Picked up something like 5 screws in one summer. Each time, the run flat got replaced. They lost thousands. Anyone could see their expected value was negative on their end, and positive on mine. I firmly don’t believe that BMW or anyone else underwrites the pricing based on each specific car and options selected. (That type of community underwriting has this effect across many products, such as health insurance too).

As to your second point, if I had done what you suggest, I’d be at a lifetime loss, without question. My 2016 duramax made sure of this. Is that rare? Maybe. But my personal experience is that negotiating heavily, and buying, ESCs makes sense for me personally. And it might for others too.

Interesting point that BMW's pricing for M3/M4 extended warranties are the same as for the 3/4 series. Is that true? It's certainly not true for their maintenance products. (just look at bmwusa.com, pricing is on there) The Ms cost more than the 3/4.

Yeah, these threads always have people chiming in with their anecdotal stories of how the warranty saved them. Still stand by that, over time, on average you win by not buying the warranties. How do I know that? The huge profitably of those products.

You're still alive, so you don't know what your lifetime profit/loss will be yet.

To be clear, all warranties and insurance products work this way. My personal strategy is to only insure big losses, and I do so for peace of mind, not because I think my expected value is positive. I really hope I lose money on my life insurance, for sure!!

Anyway, I'm not saying it's bad to get them, just don't think you've got it all figured out and will save money on it. That's it. This shouldn't even be something controversial.

[jimbethesda]

Originally Posted by HorsePower

There is one thing in my thinking, that you’re missing here. I’ve said it above, inherently, but admittedly wasn’t clear enough. I’m saying that factoring in the comfort one can get from a hedge such as this, together with negotiating the price, can make buying an ESC a positive expected value transaction for a given buyer.

We are sort of saying the same thing. If I ascribed $0 value to my comfort of knowing that repairs on my G8x will be covered with no deductible for the next 7/75k, then yes, perhaps even at the very low price I paid for the ESC, the actuarially-priced number would still beat me. But I don’t ascribe $0 to that comfort. So for me, I firmly believe I made the right decision.

BOOM! Well said. Yes, I left out the $ value for peace of mind. We are in heated agreement, as they say.

You want to know my biggest money loser "insurance" that is worth it? My house lost power for 4 days during the cold snap last year. The hills were icy near where I live (and I don't have a suitable car/tires), so I really couldn't leave for the first 3 days. My wife and I handled it ok, but our kids were a PITA! So...I dropped $13k for a whole house generator that I most likely will never need (outside of an hour or so occasionally). My peace of mind is worth $25k, so I'm winning!

[GOLFFRR]

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

[HorsePower]

Originally Posted by jimbethesda

Interesting point that BMW's pricing for M3/M4 extended warranties are the same as for the 3/4 series. Is that true? It's certainly not true for their maintenance products. (just look at bmwusa.com, pricing is on there) The Ms cost more than the 3/4.

Yeah, these threads always have people chiming in with their anecdotal stories of how the warranty saved them. Still stand by that, over time, on average you win by not buying the warranties. How do I know that? The huge profitably of those products.

You're still alive, so you don't know what your lifetime profit/loss will be yet.

To be clear, all warranties and insurance products work this way. My personal strategy is to only insure big losses, and I do so for peace of mind, not because I think my expected value is positive. I really hope I lose money on my life insurance, for sure!!

Anyway, I'm not saying it's bad to get them, just don't think you've got it all figured out and will save money on it. That's it. This shouldn't even be something controversial.

I don’t know for fact how ESC pricing compares between non-M and M 3/4 series. But I know that the ESC would have cost the same for a stripped, no-option M3, as for my relatively loaded one (with five figures of optional equipment they need to stand behind). And I also know that either the M2C ESC was priced too high, or the G80 too low, relative to one another (at least when comparing the cost of the vehicles, and options that can break and need to be fixed/replaced), between my actual 2020 and my new 2022. In millions of cars and ESCs, BMW clearly wins mathematically. In individual situations, not always.

It’s all good!! I’m not going to pretend that always-buy is the right answer for everyone. But I always stand up and say that never-buy is also not the right answer for everyone.

[HorsePower]

Originally Posted by jimbethesda

BOOM! Well said. Yes, I left out the $ value for peace of mind. We are in heated agreement, as they say.

You want to know my biggest money loser "insurance" that is worth it? My house lost power for 4 days during the cold snap last year. The hills were icy near where I live (and I don't have a suitable car/tires), so I really couldn't leave for the first 3 days. My wife and I handled it ok, but our kids were a PITA! So...I dropped $13k for a whole house generator that I most likely will never need (outside of an hour or so occasionally). My peace of mind is worth $25k, so I'm winning!

Exactly!! Believe me - first year I got my big fun loud new snowblower, it didn’t snow more than a few inches here. And I was still happy I spent the money!! (And yes, a few times I actually shoveled all of the snow from my driveway into one pile, and then blew it into the grass for sport!)

[SpeedyATL]

Originally Posted by jimbethesda

I really hope I lose money on my life insurance, for sure!!

Right there with you....

You guys are both right over the target. To me the crux is what value do you ascribe to the "peace of mind" portion of the overall value proposition. Clearly HP and I assign (a bit) more value to it than you do, Jim.

But this is an excellent discussion for anyone considering an ESP to read now, or ten years from now.

Thanks Guys.

[s58]

Originally Posted by GOLFFRR

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).