I was considering taking an extended warranty program for my 10 yrs old BMW 528i. Parts and labor charges being pricey, is it worthwhile to go in for an extended warranty???
The only one I’d consider would be one from BMW. 3rd party ones (which is what I’m guessing you’re considering) can be major headaches. Either way, you’ll be paying a lot for ‘peace of mind’. On average, they’re not worth it. Can you not put that amount aside in a ‘car repair account’? I bet you’ll have much of it left by the time you sell.
I wouldn’t buy an extended warranty on any car. Put the money in the bank instead. You’ll be way ahead.
Aftermarket warranties are mostly about profit for the seller and usually offer little protection for the buyer. They are normally written to cover only the things that are least likely to break. Read it VERY carefully before you sign. Don’t take anyone’s word for what’s covered.
Save your money.
Buying a 10 year old BMW is guaranteed to NOT give you any peace of mind, regardless of the warranty coverage. The car is entering an age where constant and expensive repairs will occur. If you do not depend on the car for daily transportation, and can afford the repairs, put the money into a bank account for “BMW repairs”.
Ditto on McParadise’s advice.
For an idea of how these places operate, try opening up a junk email account and then requesting quotes for various cars from one of them. Make sure to request quotes for mechanically identical cars from different brands. You’ll see VERY quickly how much they can take their customers for rides.
I routinely see these places offering prices that clearly are completely unrelated to the reliability of the vehicle, but rather preying on public fears. For instance, I once got a quote for $1,600 for a warranty for a Toyota Matrix. An identical warranty for a Pontiac Vibe was quoted at $3,500 by the same people.
The irony is that the Pontiac actually came with a longer powertrain warranty from GM than the Matrix got from Toyota, and they’re mechanically identical - so the warranty company should have actually seen lower costs with the Vibe than the Matrix.
That $1,900 difference was nothing but preying on people’s fears about their cars because of the badge stuck on the hood.
Do you think the warranty company is not also aware that parts and labor are expensive when they set the price of the warranty?
Well any car can have major expensive repairs.
The profit to the salesman and company is usually over 50%. So for every $1,000 you spend the insurance company has less than $500 to pay for repairs or they will loose money, something insurance companies do not do. Some people will get nothing back and some will get a lot more than they pay. Most will get far less. In addition you need to keep in mind that the insurer has worded it to eliminate as many expensive things as they can. Remember that the seller is out to make money and they get to write the rules and set the price. They are not going to sell them at a loss so one way or another they are going to have you pay more than they will pay out. Would you gamble with a car dealer who gets to set all the rules and knows all the odds? Your decision has to do with the value of the piece of mind it gives you. If that is worth the cost then buy it. Don't expect it to cover everything however, most are written to keep cost down and exempt what they know will cost them money.
My problem with 3rd party warranties is not (just) that they’re expensive, they often are next to worthless when it comes to getting paid. Here’s a good article on them:
The warranty will probably guarantee repairs for unusual failures, but not for normal wear and tear. What item breaks on a 10 year old car that can’t reasonably be due to wear and tear? I wouldn’t do it.
Save your money.
The problem is they(3rd party) are difficult to collect on and are well written to keep them out of paying out.
Use a regular mechanic(regular labor rate) for your BMW, there is absolutely nothing special about a 528i that is 10 years old in repairing it.