Bought Extended warranty

[Kennyboy]

Got my first year inspection done on the past Saturday, and upon realizing I drove 16K miles in the first year, I asked the service department about upgrading my warranty. I thought it costs about $2000 something, but it turned out that was the cost of extending the maintenance, not the warranty. The warranty extension cost considerably more...$3000 for the basic engine and tranny, $3200 for the Gold package (navi and radio not covered), and the platinum which covers the navi for $3600, all before tax, for 6 years and 100k miles. Considering I will probably reach 100K miles at 6 years, I went with the Gold package...with NY tax it came out to me $3600 with change. I am thinking when I reach over 50K miles, something probably will fail, and just couple repairs at the dealer will make the purchase worthwhile. The dealership offered 10% down and 18 month payment (roughly $177 per month), interest free. A side note, the maintenance upgrade does not qualify for the payment plan and must be paid in full at the time of purchase. You are looking at nearly $6000 with tax to extend both. OUCH

[danielj]

Are those prices MSRP or after negotiation? Warranties are usually full of mark up which, like a new car purchase, can negotiate the price of them down.

[Kennyboy]

Ouch.....wasn't aware of that....did not negotiate.

[NorCal Einstein]

Originally Posted by Kennyboy

Ouch.....wasn't aware of that....did not negotiate.

Oops, well next time you know. Warranties and various protection coverage is where dealerships make a significant portion of their money on. When you're buying a car from the dealer, all the time spent and money "saved" on negotiating/haggling the car's sale price down a few thousand dollars can be lost when you're signing the paperwork. You'll be pitched all types of warranties, extended coverage, dent protection, etc. Saying "yes" to 1 or 2 of those will negate the fruits of your haggling labor!

[Redsoxx1918]

I'm really not sure those warranties are worth it. It sounds good when you hear $3000 for a 6 year or 100,000 mile warranty....but you're already getting 4 years and 50,000 miles through the factory warranty so you're paying $3000 for two years of warranty. I'd rather put the 3 grand away and save it in case I have a problem. If so....I can put it towards the repair. I have a really good independent shop that specializes in German auto repairs at a fraction of what the dealerships charge. If you drive high mileage, you're probably better off finding a one year old BMW with low mileage that has been certified. The certified warranty is bumped up to 6 years or 100,000 miles from the original in service date. So, if you found a one year old car with 15K miles on it, you'd be getting a 5 year 85,000 mile warranty.

[Kennyboy]

It is just that at the rate I drive, I will exhaust my warranty on the 3rd year...a 6 year 100K miles coverage is exactly what I needed. Plus it came with road side assistant, and a loaner car from the dealer is always nice. The package isn't bad....just the price is a bit high. I did not negotiate the price, but then again they have lower priced packages, like one year extension plans, basic plans...etc....for instance the basic plan is priced $200 lower than the Gold package I bought, so they might not sell me the Gold plan for much less than a basic plan. Having different offers at different prices make it more difficult to negotiate the price. If the gold package is $3200, and the basic is $3000, if you try to negotiate the gold package down to $2800, they may offer you the basic plan instead.

[Kennyboy]

One side note, I think most certified pre-owned cars with very low mileage are retired loaners cars. Actually I noticed there is no such things as a "retired" loaner car. Dealerships use some inventories as loaner cars and are selling them at the same time, as long as there is an offer. Most loaners from my dealership are very well packaged, some with sports packages, even high-gloss black trims all over, make them easier to sell as pre-owned. Most loaner cars will be sold before they reach more than 15K miles, some as little as 5K miles. Buying a certified pre-owned with low mileage is very risky...it is very likely a retired loaner car.

[NorCal Einstein]

Originally Posted by Kennyboy

One side note, I think most certified pre-owned cars with very low mileage are retired loaners cars. Actually I noticed there is no such things as a "retired" loaner car. Dealerships use some inventories as loaner cars and are selling them at the same time, as long as there is an offer. Most loaners from my dealership are very well packaged, some with sports packages, even high-gloss black trims all over, make them easier to sell as pre-owned. Most loaner cars will be sold before they reach more than 15K miles, some as little as 5K miles. Buying a certified pre-owned with low mileage is very risky...it is very likely a retired loaner car.

This is definitely "your mileage may vary". I recently went through the car buying process again about a month ago and was in the market for a CPO car.

In my experience here in California (visiting ~5 dealerships), the majority of CPO cars are NOT former loaner cars. Most of what I saw were lease returns. The former loaners also tended not to be well optioned (at least when it came to X1 and X3). Every time I was shown a car that was a loaner, it designated so by the sales adviser an/or noted in the car's in-service history. It was pretty clear to see if a car was a lease return or a service loaner. Maybe it's different here in California...

I also don't agree with your generalization that "buying a certified pre-owned with low mileage is very risky". It might be risky for you due to how your local dealerships operate, but this doesn't hold true everywhere. I've bought both new and CPO BMWs. When it comes to CPO cars, you evaluate each one separately based on its history and go from there. It would definitely be foolish to suggest to people that buying CPO is very risky.

My X1 is CPO Elite which I took possession of with 335 miles on the odometer. Out of all the E-code cars I've had, this has been the best purchase since someone else took the new car drive-off value hit. The story/history behind my X1 is an outlier, but it's a example of how a person can benefit from buying CPO.

[atomic]

Originally Posted by Kennyboy

One side note, I think most certified pre-owned cars with very low mileage are retired loaners cars. Actually I noticed there is no such things as a "retired" loaner car. Dealerships use some inventories as loaner cars and are selling them at the same time, as long as there is an offer. Most loaners from my dealership are very well packaged, some with sports packages, even high-gloss black trims all over, make them easier to sell as pre-owned. Most loaner cars will be sold before they reach more than 15K miles, some as little as 5K miles. Buying a certified pre-owned with low mileage is very risky...it is very likely a retired loaner car.

Everyone who works at the factory in South Carolina gets 1 year lease deals at sweet rates that could be a good source of cars for the CPO.

[Redsoxx1918]

Originally Posted by Kennyboy

One side note, I think most certified pre-owned cars with very low mileage are retired loaners cars. Actually I noticed there is no such things as a "retired" loaner car. Dealerships use some inventories as loaner cars and are selling them at the same time, as long as there is an offer. Most loaners from my dealership are very well packaged, some with sports packages, even high-gloss black trims all over, make them easier to sell as pre-owned. Most loaner cars will be sold before they reach more than 15K miles, some as little as 5K miles. Buying a certified pre-owned with low mileage is very risky...it is very likely a retired loaner car.

It's not really so risky if that CPO car is coming with a 100K mile certified warranty. A one year old CPO car with 15K miles will have a 5 year, 85K mile warranty. Your new car only comes with a 4 year, 50K mile warranty. Which one is riskier?

[Kennyboy]

I was just wondering why are there so many cars in my dealer's lot, last couple year's models, with just 5-6K miles on them....talking about couple dozens for every base models. I was just thinking most lease returns would have more mileage after 30-36 months (for an average lease)