Mini cooper maintenance contract extension

Standard contract expires at 50K miles. Contract extension to 100K costs $2600. Does it make economic sense to buy the extension?

It makes much more sense for you to put the $2,600 in a seperate account of your own and call it “post-warranty repair account”. Then if it isn’t needed, you’ll still have the money instead of them having it.

If something is defective, it’s likely to fail in the first 50,000 miles. If you go that far without problems it’s highly likely that you’ll go the next 50,000 miles also without problems. If you do have a problem it’s unlikely that it will be for more than $2600 and also be something covered by that extended warranty.

Extended warrantys are ripoffs. They take a large amount of your money up front with an extremely, extremely low likelihood of having to spend it rather than letting you keep it yourself. It’s a fool’s bet.

Maintenance Contract? Do you mean maintenance or repair/warranty/insurance? $2600 sounds like a lot for maintenance, but do the numbers, get an estimate from someone else (use the items listed in the owner’s manual as you don’t need anything else they add) and make your own mind up. If it is an insurance polity, usually called an extended warranty, consider that the dealer is buying the insurance for about $1300 and the insurance company is planning on making a profit out of what is left. That means most people who fall for it pay $2600 and likely get less than $800 back in repairs. Some will come out ahead, but most will not.

If you keep up with regular maintenance and don’t abuse the car, you will most likely never need an extended warranty. I have had 10 cars and only one would have benefited from an extended warranty. Luckily, it had one, provided by Oldsmobile as an inducement to buy the car after they announced the end of the marque. But it is unlikely that you will need it. Carefully read what is covered and under what circumstances. Then decide if it makes sense for you. Also consider that it really isn’t $2600. There is the lost opportunity. Let’s say you get 3% compounded monthly in your savings account. The value at the end of 3 years (16,700 miles/year) would be $2845. That’s what it really costs. Unless you take out a loan on the extension. Then it costs a lot more.

We have had this post twice before this year. On domestic appliances and electronic gear you would be lucky to recoup 5% on the amount you pay for the extended warranty; the salesman gets almnost 50%. On cars, you might recoup 10-20% of the cost you pay. Put the money in the bank, and if the car is really sound, carefully drive it till 100,000 miles, then get rid of it. Although designed by BMW, this vehicle does not have the quality or Design Life that “bread and butter” cars have. Like the VW New Beetle, it is a niche car, or fad car which normally do not get the engineeing attention they should. Repairs on these cars are very expensive and will be very frequent after 100,000 miles.