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      02-18-2014, 09:11 AM   #1
sfax
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UK extended warranties

Approaching 3 years old and decided to keep the X3 for at least another couple of years.

Any thoughts on extended warranty policies whether to go for

1. BMW insured comprehensive extended warranty - £33/month with £250 excess (whee you can potentially insure the excess too)
2. warrantydirect BMW - 3 years comp, £50 excess, £1100 franchised dealer =>
£367/year, £30.55/month
3. Nothing - take the risk and the hit of future big repair bills and use the £1,000 you saved in premiums on repairs!

I've read lots of negatives on warranty direct not paying out because of items being considered wear and tear but their main selling point over BMW Mondial is that Mondial don't cover failure as a result of wear and tear.
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      02-18-2014, 12:10 PM   #2
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I used to have a Warranty Direct policy on 4 year old Audi.
It covered just about everything including wear and tear. The only problem I had was when a main dealer lied to me about having got an approval code to replace a damaged part when in fact they hadn't. Lesson = make sure you get confirmation of the approval or get it yourself.

I dislike the look of the BMW policy because I excludes wear and tear.
Have you looked at Warranty Wise? Their policy looks excellent. There is negotiation room on their quote too, they always call or text with an offer a few days after getting an online quote.

Either way, I would do it - I think it is bound to pay for itself.
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      02-18-2014, 12:23 PM   #3
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Quote:
Originally Posted by adam1b View Post
I used to have a Warranty Direct policy on 4 year old Audi.
It covered just about everything including wear and tear. The only problem I had was when a main dealer lied to me about having got an approval code to replace a damaged part when in fact they hadn't. Lesson = make sure you get confirmation of the approval or get it yourself.

I dislike the look of the BMW policy because I excludes wear and tear.
Have you looked at Warranty Wise? Their policy looks excellent. There is negotiation room on their quote too, they always call or text with an offer a few days after getting an online quote.

Either way, I would do it - I think it is bound to pay for itself.
Cheers, the wear and tear is a big selling point although there are so many exclusions, I'm left second-guessing what might fail and what might just need replacing because of wear and tear (that's not on the exclusions list). WarrantyDirect seem to get a lot of bad press for not paying out but then that's common on forums.

Tempted to just get nothing and pay £30-£40/month into a savings account

Will take a look at WarrantyWise too - thanks
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      02-18-2014, 05:19 PM   #4
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Quote:
Originally Posted by sfax View Post
Cheers, the wear and tear is a big selling point although there are so many exclusions, I'm left second-guessing what might fail and what might just need replacing because of wear and tear (that's not on the exclusions list).
For me the BMW insured warranty is the only seamless way to go. If lowish mileage, you can argue the point on wear and tear. I've done so in the past, a good dealer will work with you, if parts appear to have failed prematurely.

The biggest risk is getting full cover for component failure, that is what a cast iron warranty is really about. A lot depends on the value of the vehicle, the options and their complexity. My car is loaded with tech, so something like SatNav, HUD, Adaptive Drive failure requires to be covered at BMW rates, no questions asked, IMO. Plus cover for any consequential damage.

I had a new V8 engine (long block) in my 540i, on extended warranty, included other parts like the radiator and consumables, all covered £0.00 invoice.

For me it is a no brainer, for fixed costs, running complex cars. I've had good value out of the extended warranty over the years with BMW, wouldn't run a BMW out of the warranty.

Even something as simple as a suspension spring failure mounts up, if you need recovery and a hire car for several days.

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      02-19-2014, 12:25 AM   #5
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Extended Warranties - Risk Premium cf what you pay!

The discussion is missing the critical issue. Insurance of any sort is attractive if the dollars paid in premium are close to the dollars paid in claims across the entire portfolio. The gap between the two is made up of administrative costs plus profit margin plus commission paid to the selling agent.
Car dealers are notorious for being paid mega commissions so that they will sell stuff.
I do not know what commission the selling agent is getting in your area but let's guess it is,say, 30%. Imagine that admin and profit is 15% (wild guess).
So you hand over $100 and get back in claims $55.
That is not a great deal. It might be tempting if you were so poor that you could not handle a large repair bill. Otherwise save your money and put $100 under the mattress every year. When you do you save $45 every time.
At least, before buying, quiz the seller as to his or her commission and try to whittle it down.
A side issue is, of course, that the insurer knows the business better than you - it has statistics not available to you so the premiums are more than adequate.
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      02-19-2014, 02:31 AM   #6
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Quote:
Originally Posted by HighlandPete View Post
For me the BMW insured warranty is the only seamless way to go. If lowish mileage, you can argue the point on wear and tear. I've done so in the past, a good dealer will work with you, if parts appear to have failed prematurely.

The biggest risk is getting full cover for component failure, that is what a cast iron warranty is really about. A lot depends on the value of the vehicle, the options and their complexity. My car is loaded with tech, so something like SatNav, HUD, Adaptive Drive failure requires to be covered at BMW rates, no questions asked, IMO. Plus cover for any consequential damage.

I had a new V8 engine (long block) in my 540i, on extended warranty, included other parts like the radiator and consumables, all covered £0.00 invoice.

For me it is a no brainer, for fixed costs, running complex cars. I've had good value out of the extended warranty over the years with BMW, wouldn't run a BMW out of the warranty.

Even something as simple as a suspension spring failure mounts up, if you need recovery and a hire car for several days.

HighlandPete
Thanks for this Pete. Much appreciated. I've gone for BMW Comprehensive + Emergency Cover with a high excess to begin with as the car is only 3 years old and has 29k on the clock. I may reduce the excess (and therefore up the premiums) in the future when it reaches (if I keep it that long) 60k.

You'll never know for sure on the wear and tear get out but as you've said, lower mileage gives you a better argument against it for some failures.
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      02-19-2014, 02:36 AM   #7
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Quote:
Originally Posted by GWA View Post
The discussion is missing the critical issue. Insurance of any sort is attractive if the dollars paid in premium are close to the dollars paid in claims across the entire portfolio. The gap between the two is made up of administrative costs plus profit margin plus commission paid to the selling agent.
Car dealers are notorious for being paid mega commissions so that they will sell stuff.
I do not know what commission the selling agent is getting in your area but let's guess it is,say, 30%. Imagine that admin and profit is 15% (wild guess).
So you hand over $100 and get back in claims $55.
That is not a great deal. It might be tempting if you were so poor that you could not handle a large repair bill. Otherwise save your money and put $100 under the mattress every year. When you do you save $45 every time.
At least, before buying, quiz the seller as to his or her commission and try to whittle it down.
A side issue is, of course, that the insurer knows the business better than you - it has statistics not available to you so the premiums are more than adequate.
There is a lot of competition for policies here so if you get an online quote and then wait, you tend to get a call offering you £200-£300 off a 3-year policy if you decide to go with them over the phone straight away.

The bottom line is that all of the insurance companies make big profits and for each claimant that does well and gets their money worth, there are 10 who pay a lot in premiums and never get any of it back
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      02-19-2014, 03:37 AM   #8
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Extended warranties continued

Yes, you can get discounts.

No - not all insurers make profits. And probably none do every year.

Yes - plenty of policyholders do not make claims. Isn't that how insurance works?

The fundamental issue with assessment of whether insurance is a good deal or not is as follows...

Some insurers will sell directly to the public with no intermediaries earning commission and they will have economies of scale and find fierce competition in their market for that particular class. They then boast, for example, that for every dollar of premium they return 92.5 cents in claims. For policyholders that is attractive.

Now with other, usually minor classes of insurance, the insurance companies compete amongst themselves for business and they win it by encouraging intermediaries to put effort into selling their product, rather than someone else's. And they compete by offering high rates of commission/brokerage. The result is that for a dollars premium the unfortunate policyholders, on average, get much much less than a dollar's worth of claims. Not,say, 92.5 cents in the dollar but perhaps 50. So half the premium goes off, but not to the policyholders. Obviously, some policyholders "win" as their claim is greater than the premium paid. But as the gist of this forum topic was along the lines of is this extended warranty or that one a good deal it seems very pertinent to see whether us policyholders are paying considerable premium for something other than claims.
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      02-19-2014, 03:51 AM   #9
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Quote:
Originally Posted by GWA View Post
Yes, you can get discounts.

No - not all insurers make profits. And probably none do every year.

Yes - plenty of policyholders do not make claims. Isn't that how insurance works?

The fundamental issue with assessment of whether insurance is a good deal or not is as follows...

Some insurers will sell directly to the public with no intermediaries earning commission and they will have economies of scale and find fierce competition in their market for that particular class. They then boast, for example, that for every dollar of premium they return 92.5 cents in claims. For policyholders that is attractive.

Now with other, usually minor classes of insurance, the insurance companies compete amongst themselves for business and they win it by encouraging intermediaries to put effort into selling their product, rather than someone else's. And they compete by offering high rates of commission/brokerage. The result is that for a dollars premium the unfortunate policyholders, on average, get much much less than a dollar's worth of claims. Not,say, 92.5 cents in the dollar but perhaps 50. So half the premium goes off, but not to the policyholders. Obviously, some policyholders "win" as their claim is greater than the premium paid. But as the gist of this forum topic was along the lines of is this extended warranty or that one a good deal it seems very pertinent to see whether us policyholders are paying considerable premium for something other than claims.
This ls mostly irrelevant to me to be honest. The price can be discounted and people will get ripped off by brokers, but the more important part is what is and what isn't covered and how likely you are succeed in a claim. Pay what you like for a premium for it's all money down the drain if you come to claim and it's refused on a spurious exclusion
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      02-19-2014, 11:42 AM   #10
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Quote:
Originally Posted by sfax View Post
This ls mostly irrelevant to me to be honest. The price can be discounted and people will get ripped off by brokers, but the more important part is what is and what isn't covered and how likely you are succeed in a claim. Pay what you like for a premium for it's all money down the drain if you come to claim and it's refused on a spurious exclusion
Agree and why for me the BMW warranty makes most sense. BMW can't pass the buck, as it is as integrated as you can get, from a manufacturer.

True it is an 'insured' warranty these days, but that had to happen according to UK trading rules. BMW used to run the extended warranty internally, and that made it really good value, but competition rulings mean they have to run it as any aftermarket insured warranty.

As I said before, I've had good value out of extended warranties, more value than I've ever paid to BMW or their agent. Plus it is a "one call" warranty/emergency service. If it works right, even if you need the car uplifted, you get a hire car delivered, your car delivered back when fixed and the hire car taken away.

Up here it is a bit more complex, and getting hire cars is complicated as the nearest 'approved car hire agent' is over 70 miles away, but BMW have hopefully fixed this issue. After messing a hire car for me they opened an internal enquiry, and have initiated a method to hire locally and claim back the cost to BMW. I've a letter on file giving the specific instructions.

I'll be extending my warranty when my current car reaches 3-years old.

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      02-19-2014, 11:55 AM   #11
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i'm just gonna take the risk and not get any warranty... had the x3 from new and nothing's gone wrong in that time.. besides my history with the z4/5 series hasn't been too harsh so am quite comfortable with just leaving it alone...
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      02-19-2014, 03:41 PM   #12
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Quote:
Originally Posted by HighlandPete View Post
Plus it is a "one call" warranty/emergency service. If it works right, even if you need the car uplifted, you get a hire car delivered, your car delivered back when fixed and the hire car taken away.
That was a big plus for me too, particularly the continental Europe car hire, hotel and recovery, as we do occasionally take it there and it adds a bit of confidence

Annoying that it's another £120/year just to keep the SIM active for Google send to car and the BMW online stuff, and the concierge service (that I'm yet to use in 3 years!)
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      02-19-2014, 03:45 PM   #13
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i'm just gonna take the risk and not get any warranty... had the x3 from new and nothing's gone wrong in that time.. besides my history with the z4/5 series hasn't been too harsh so am quite comfortable with just leaving it alone...
I was very tempted to do the same and I'm sure you'll be fine. It's really just peace of mind for me, rather than an expectation of an early failure just out of warranty. Particularly given only 10k mileage/year
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      02-19-2014, 03:46 PM   #14
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Quote:
Originally Posted by sfax View Post
That was a big plus for me too, particularly the continental Europe car hire, hotel and recovery, as we do occasionally take it there and it adds a bit of confidence

Annoying that it's another £120/year just to keep the SIM active for Google send to car and the BMW online stuff, and the concierge service (that I'm yet to use in 3 years!)
I just wonder if there's an option to tether your mobile phone to the car rather then using the built in SIM. I know some countries do not have the SIM option so they have to tether. How you enable tethering- don't know!
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      02-19-2014, 03:52 PM   #15
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I just wonder if there's an option to tether your mobile phone to the car rather then using the built in SIM. I know some countries do not have the SIM option so they have to tether. How you enable tethering- don't know!
I would happily pay to find out (given it will now cost me £120/year for a SIM that doesn't even allow 3G. Think it's GPRS/EDGE only.)

Forgot to mention I also want it for the find my car's location, switch on its ventilation and flash its headlights Remote BMW app. Still can't believe they removed the sound the horn remotely option. Spoilsports
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      02-19-2014, 05:16 PM   #16
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Particularly given only 10k mileage/year
am only doing about 8k a yr
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      02-20-2014, 02:08 AM   #17
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am only doing about 8k a yr
I would be on 5k/yr if my wife didn't drive it

I'll update this thread if I need to make a claim
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      02-20-2014, 04:24 AM   #18
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Quote:
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I would happily pay to find out (given it will now cost me £120/year for a SIM that doesn't even allow 3G. Think it's GPRS/EDGE only.)
Yep.

Pretty slow at times. The new X5 has 3G built in, When I looked around one at my dealer the internet option was fast, not like my painfully slow one.
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