oclvframe

......manual lust.....

-r

DaHose

Today we picked up our 2006 530xi wagon from the shop. I will now steal from a popular credit card commercial campaign.

New 6HP19Z transmission - $5700
Final Bill - $7500

Driving away after paying only my $450 for deductible and a new battery, while the extended warranty provider pays the remaining $7050? Priceless...

Considering that we bought the car with 92K miles, and that the cost of the extended warranty ends up being about $3700 over the life of the loan ...... I HIGHLY RECOMMEND EXTENDED WARRANTIES WHEN BUYING A USED E61 WAGON!!!!!!!

Jose

pocholin

DaHose,
you forgot to say...PRICELESS! Kudos!

norsecarnut

How does the cost of a warranty "end up being...$3700...over life of loan" ? "You" (people in general) pay the amount up front or take on it's equivalent debt. Then you also pay interest if you included it into a loan or paid for it in any other way than cash.

Over life of the warranty span you loose the potential for either income gained on it's cost, plus you additionally pay interest on other debt on the equivalent dollar amount - if carrying any other interest bearing debt.

This does not even get into the potential earning power of $3700 over a few years. For example, I've found it to be not too hard to make a 1% per week return on stock investing. Combined with a reinvested approach, that's roughly a 50% growth annually, meaning $3700 becomes $5500 by end of first year. By end of 2nd year, that money equals your repair. Now, the obvious gamble is if you will need such repairs or not.

This gamble is actually in favor of the insurance company because they of course use this capitol for investments in addition to the statistical claim costs to them.

So, it is most definitely not "priceless"....


At the very least, something for some people to evaluate

DaHose

Ok. Addressing your comments and concerns will require a longer post.

I must say that you (norsecarnut) come across as rather absolute in telling us how we should be calculating the value of something. That's actually just opinion, and nobody has a more or less valid opinion about anything. I also know my share of people who found it "not so hard" to make money on the stock market, until the day they took a major loss. If investing is natural to you, and you are good at that gamble, then more power to you. Go for it.

In truth, it's a simple matter to look at what your monthly payments are, and know the real dollars you have paid for something. The difference between having and not having the extended warranty was $3700 sum total cost difference, at loan payoff. That is not some theoretical opinion, or investment/financing black magic. That is a clear, real world, dollars and cents fact.

I am a mechanic originally trained in the Marine Corps and have been working on old and modern vehicles for 20+ years. I just completed the build of my diagnostic computer to work with my E61. MOST people cannot do the level of work I am capable of. For your average person, this repair would have been the full $7500 dollars, plus $300 on a rental car. The point made about investing is a "what if", but I am talking about a $3700 real dollar difference between what I will end up paying for my extended warranty, and what this repair would have cost me without the extended warranty. Turning $3700 dollars into $7800 is more than doubling of your money in less than one year. The theoretical stock market example given would take three years to equal my current achieved value, but I achieved my value in less than one year.

I agree that most extended warranties bank on the fact that you will not use them, and they will get to eat your money. We fully understood that going in. We also fully understood that ANY repair on a BMW is a major cost, and a major repair on a BMW can mean multiple thousands of dollars. Every consumer has to make a choice. In this case we clearly negotiated well, and made a good choice in purchasing the extended warranty. Mind you that we are still covered for over two more years in case anything else goes wrong.

Now, let me share that as a mechanic, this is what I think about when buying something like our E61 wagon. Window regulator failure is not un-common on E60/E61 models with over 100k. One regulator repair would be at least three hours of shop time and $200 in parts. That is about $700 total in my area. Add in car rental cost, and you are at a $1000 bill for an extremely simple mechanical problem, never mind all the other moving parts, suspension bushings and computers in this extremely complex car. Based on all that information, I decided that the extended warranty was worth it. Guess what? Evidence shows it was an absolutely a fantastic choice in our case.

So with all that said, allow me to again state MY experience and opinion, with some more details. If you are a BMW shop owner who can do all your own work and get parts wholesale, or if you can afford multiple thousands of dollars in major repairs, then maybe you don't worry about getting an extended warranty and gamble on the car having no issues. However, I believe that most folks should seriously consider getting an extended warranty when purchasing a used BMW. Just be sure you negotiate well and have a trustworthy shop local to you.

Oh ... yes pocholin. PRICELESS!

Jose

norsecarnut

Jose.

sorry it sounded like an absolute. I didn't mean for that.

Awesome explanation on your part though. I think the analysis will be useful for other people pondering the choice.

I should have said up front that I was glad to have had a cpo warranty on mine which covered getting new turbos, HPFP, a nav unit glitch, and several other things costing a few times your warranty had I paid out of pocket.

I also think I might have misunderstood your warranty cost but a lot of people do not grasp how the money works out when paying up front for something that may or may not be utilized.

My argument works better when someone is considering buying an additional extended warranty at the beginning of a new car purchase because the odds are that it won't be utilized much before the end of mileage or time while spending the $ up front is a 100% loss. Creating your own repair "fund" can be a reasonable gamble because you still have some % chance to retain the $.

The difference here specifically is that this era BMW is known for so many "when, not if" issues, that a warranty is probably the better bet.

pocholin

Didn't do it today, but Friday I ordered spark plugs, cabin air filters and a rear brake sensor. Will be working on that next weekend.

DaHose

Ah, your situation was definitely not one where I would have gone with an extended warranty either, norse. I also agree than an extended warranty when brand new does not make sense.

Setting aside a repair fund is a great idea that comes up a lot with RV buying. People will buy used RV's and spend $4000 on an extra warranty, but they don't cover a lot of the critical components anyway. Setting aside the $4000 in cash to address any problems that might arise is often considered a better solution.

Drove the wagon today and tested the manual shifting. It works much better now. Very happy to have it back and fixed.

BostonJon

siphoned out and refilled my power steering reservoir. took about 350mL of fluid from the 1L bottle I bought (Febi-Bilstein CHF11S - $15). i plan to do this once a month for the next two months until the bottle is empty.

next: replace rear brake lines with stainless and flush fluid

pocholin

Replaced the rear brake sensor, no more warning! Finally!!

Thanks ECS for great pricing and fast delivery!