On 4 Jul 2006 02:40:47 -0700, email@example.com wrote:
It is a lot more helpful it you give some reasons why you think the
warranty is not appropriate. I may have different priorities than you, and
your reply is helpful only if you give me reasons that I can evaluate in
the context of my own priority framework.
His reply is appropriate - we don't know the age, mileage, driving
style, etc., etc., of the OP, so there is nothing more to go on than
the general acceptance of the principle: "the insurance company
makes money out of extended warranties, why bet on a strategy
that is a sure loser?".
a) the chances of something serious going wrong are small
b) I fix most stuff myself so I'm not scared into buying insurance to
cover (part of) of the shocking dealer prices for repairs.
c) They're generally not good value for money.
On 6 Jul 2006 05:06:35 -0700, firstname.lastname@example.org wrote:
Thanks for the follow-up, it is more helpful.
(a) that's why some people buy insurance - risk transferrence, i.e.
transferring the risk from yourself to the insurance company. With a car
as technically advanced as the BMW, it does not take "something serious"
for the costs to pile up.
For example, I bought tire and wheel insurance when I bought the car. One
day, driving home from work, a rock rolled onto the road and tore a 1/2
inch hole in the tire. The insurance paid for itself in that incident
Now, what's the likelihood of a rock rolling into your car as you are
driving home from work? Very small, but it did happen to me.
(b) I stopped working on my own car many years ago, and I've no inclination
to start again.
(c) most (if not all) extended warranty policies are not a good value, from
appliances to cars. Then again, for most people, going to a casino is not
a good value either. Either way, you are betting against the house.
This has been a useful discussion. Thanks all!
Let us see how the above framework applies to me.
a) chance is small. but also the cost repair can be pretty high!! i
just do not know how much -- any ideas as to how much typical repairs
that one would desire an extended warranty for cost?
b) i am terrible at fixing things myself. so this is out. also, in any
case the extended warranties that i have come accross do not cover the
kind of things that one can fix himself!
c) this is true. although i have recently heard somebody buying a honda
warranty that seemed like absolute value for money. except perhaps that
hondas give you a lot less trouble.
The question of course remains for me as to whether I should get a
warranty. I would certainly not mind paying for peace of mind. However
the price does appear to be quite high and in many places does not
reduce the ongoing cost incurred towards maintenance.
I looked at a warranty recently (one that excluded items as opposed to
declaring what was included) and it seemed that most of the costs would
be borne by me. except perhaps for things such as transmission failure
and some such. since i do not take my car to the race track or anything
even close to that, the best alternative at this stage appears to be to
invest in regular maintenance of the car and fix issues as eary as
possible. and that is something i guess i would need to to regardless
of whether i buy the warranty or not.
in summary, i am inclined to not buy warranty. i take it most of you
guys do not seem to have bought extended warranties.
Seems like you've used your head. It's easy to assume a warranty will
cover everything but many have exclusions. I even had to argue with
BMW over their "our warranty is the best in the world" warranty when I
had to claim for some stuff 'cos all of a sudden it was "sorry the
warranty doesn't cover that"
An extended warranty is like taking out an insurance policy on you car.
The insurance company (warranty company) has to make money on the deal.
If the warranty is offered by a car dealer, then the car dealer also
has to make money on the deal. Therefore, on average, you will lose
money on the deal. That does not mean that every car owner who
purchases a warranty will lose money. You could be the one owner out of
100 who needs a new engine and transmission while the car is under
Choosing whether to buy a warranty or not (self-insurance) depends on
how risk averse you are and how well you care for your car. If you
place a high value on not worrying about repairs and the price is
reasonable in your mind, then you should consider it. If your budget
can handle a major repair, then you'll come out ahead (on average) by
Finally, there are large price differences in these warranties. When I
bought my 2003 530 at CarMax, they wanted around $1,800 for 5 year,
60,000 mile extended warranty. My local BMW dealer wanted nearly twice
that amount for a warranty with a higher deductable.
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