Never, Ever Buy An Extended Warranty...

[ericthehalfbee]

Extended warranties are very popular, especially with higher end cars like BMW & Mercedes simply because people have a perception that these cars are very expensive to repair if something goes wrong. So they're an easy sell for the dealers. Here are experiences with two of our customers (I intentionally changed some details as a lawsuit is pending and I don't want to do anything that would hurt our customers case).


Customer #1 had a problem with their car that would be about $1,000 to repair. Reading the fine print the repairs are covered under the warranty. The warranty company wanted to see the copies of the service records to make sure the vehicle was being serviced regularly. Customer sent them in and the warranty was denied. Why? Because in the fine print the warranty states you need to have your car serviced (and oil changed) regularly. What do they mean by regularly? 4 months or 5,000km. Never mind that according to the manufacturer of this vehicle you can wait much longer than 4 months/5,000km for service. So no warranty because the customer was following the manufacturer's recommendations on service intervals which were longer than what the warranty company required.

Customer #2 is worse. They had a serious mechanical problem with their engine. It will cost $7,000 to repair the damaged engine. Again, warranty company wanted to see service records. Again customer was denied warranty because they waited too long between service. This particular customer was actually changing their oil more often than what the manufacturer recommends, but it was still not often enough.


If you look at BMW, Mercedes and Audi (for example) oil changes can be anywhere from 7,500km up to 15,000km depending on the conditions under which the vehicle is driven. This is because the vehicles use synthetic oil (which lasts longer) and because modern engines are so efficient and clean that oil doesn't get dirty like it used to in old engines. So right away you're way over the requirements of the extended warranty companies who required service much more often. Even changing at the minimum (7,500 km) still puts you over.


What's worse, these customers essentially have their warranties cancelled. Since they have sent in their records the warranty company now knows they haven't been serviced according to the "fine print". So any future warranties will be denied for the same reasons these claims were denied. So by being diligent and keeping records, and by following the manufacturer sevice intervals, they have screwed themselves out of getting any future repairs.

Now you are probably thinking "what if something else failed, besides the engine? surely engine oil has nothing to do with electronics or other systems." Well, customer #1 had a failure of something else on their car. The warranty company's excuse for denying warranty? If the car was serviced when it should have been, there's a good chance the problem could have been spotted and the problem resolved before it caused the damage it did. So not only are you supposed to service your vehicle more often than what the manufacturer says, but the people servicing your car are supposed to be able to predict future failures just by looking over your car.


To be fair, Customer #1 did have an electronic module go down several months after the first claim was denied, and they had purchased the optional extra coverage for electronics (which is never covered under standard extended warranties and is always an extra cost option). The warranty company still complained about her service intervals, but after threats of legal action from the customer they caved and covered it. But they are still screwed if their engine or other major mechanical parts fail.


Bottom line, don't buy an extended warranty. Better yet, if you're buying a car and the dealer is selling you an extended warranty, specifically ask to see the fine print on service intervals in the warranty and compare that to what the manufacturer recommends for your vehicle. If the extended warranty interval is much shorter, don't buy the warranty and make sure to tell the dealership why (and tell them about our customer who had to fork out $7,000 for engine repairs).

I persoanlly think this is going to open up a huge can of worms if any RS'ers buying a car with an extended warranty ask this simple question. Dealers sell warranties like crazy, and I wonder if they are even aware of this issue with service intervals. Imagine if everyone buying a car knew about this? Do you think a dealer could ever sell an extended warranty again if customers knew about this? I doubt it.

[Iron Chef]

this is only and issue with AFTERMARKET extended warranty.

Factory backed extended warranty is worth every penny and i wouldn't recommend you own a high end euro car like Merc , BMW, and Audi.

This issue is for cheap ass people that buy high end cars at used car dealerships to save a couple of bucks but have to pay in the end.

[ericthehalfbee]

^ These customers bought their warranties at dealerships, not used car lots. Sure they were aftermarket warranties, but they weren't flogged by some shady Kingsway lot.

Do you think all used BMW's are sold at BMW dealers? What about the numerous BMW's that people traded in to get a Mercedes or Audi? Will Mercedes put a BMW Extended Warranty on a BMW they sell that someone traded in?

New car dealerships sell a ton of these aftermarket warranties for various reasons.

My personal opinion is an extended warranty isn't worth it even on BMW or Mercedes because most people will never need enough repairs to cover the cost of the warranty itself. Add the fact that they will try to deny it for the stupidest reasons and you should never buy an extended.


I do agree a factory warranty is good, though, but only for coverage not for value for $$$.

[ilvtofu]

I think mercedes offers their own factory extended warranty, I remember getting a pamphlet on it.

[fliptuner]

Same with BMW on their certified used Bimmers.

OP should've clarified AFTERMARKET warranty. Extended warranty on new cars is a great option.

[Blinky]

On average, buying an extended warranty, be it from the OEM or aftermarket, will cost you more than if an extended warranty isn't purchased at all.

[Presto]

If the dealership is the one that sold the warranty then they should be involved in the dispute. They shouldn't be selling a product that people can't use unless they package it as an anus enlargement, because they're only paying for an ass fucking.

[fliptuner]

Originally Posted by Blinky

On average, buying an extended warranty, be it from the OEM or aftermarket, will cost you more than if an extended warranty isn't purchased at all.

[Blinky]

Originally Posted by fliptuner

...silly image macro...

Then why do you post this?

Extended warranty on new cars is a great option.

Maybe a great option for the dealer. Not so much for the purchaser.

[ilvtofu]

Originally Posted by Blinky

On average, buying an extended warranty, be it from the OEM or aftermarket, will cost you more than if an extended warranty isn't purchased at all.

On our w203 c class which we've sold already, a year after the 48 months expired, the A/C went, quoted for just over $3000 by a third party shop. what a rip! that and numerous minor issues with the car's electricals which would've been covered as well.

[taylor192]

Originally Posted by Iron Chef

Factory backed extended warranty is worth every penny and i wouldn't recommend you own a high end euro car like Merc , BMW, and Audi.

FAIL.

No company sells a product they lose money on. None. Zero. They would be out of business.

Extended Warranties are a gamble, with the odds stacked in favour of the house. Sure some people will win big, yet they are the exception, not the rule. Most will pay $2-3K for an extended warranty and barely use it.

Case in point: my lemon. I have had numerous problems with my car, yet if I add them all up I'm only $500 more than what the extended warranty would have cost. I had problems with AC, ball joints, bearings, cam sensors, O2 sensors, MAF sensor, engine harness, fuel pump, ...

Most cars should not have this many issues in the 2-3 years most extended warranties cover, and most people will lose by taking the extended warranty rather than paying for repairs when they happen.

Originally Posted by Iron Chef

This issue is for cheap ass people that buy high end cars at used car dealerships to save a couple of bucks but have to pay in the end.

Wrong, again.

This is an issue with people who cannot manager rainy day accounts. They need to buy "insurance" (aka extended warranty) to cover anything bad that may happen cause they cannot save enough for those rainy days.

Its mainly people stretching themselves to keep up with the Jones.

[taylor192]

Originally Posted by ilvtofu

On our w203 c class which we've sold already, a year after the 48 months expired, the A/C went, quoted for just over $3000 by a third party shop. what a rip! that and numerous minor issues with the car's electricals which would've been covered as well.

The W203 is an exception, its a POS.

Yet $3K? WTF! Mine cost $1500 to fix, or better yet, $50 to refill every year and not fix

[sexyaccord]

BMW's extended warranty( 4yr+) is sourced to a 3rd party on new cars, not sure about the used ones though.

[slammer111]

I don't see any strange fine print like the 5000km clause, just flipped through my paperwork. Then again, mine was the real deal from MB Canada.

I bought the extended warranty for $2386 and got maybe $100 of use out of it, yay for me. But the amount of repairs (all covered by warranty, thank goodness ) this thing required during the first 4 years of ownership right up until I bought the EW was a whole lot more than 2k (my guess is 4k), so in the end I guess I still won?

Most people with W203s that I know bought the EW out of fear after repeated trips to the dealer. You guys have no idea how many times things have broken on my car, and mine wasn't even the worst case on the forums. Of course it's hit and miss, but I also know some guy who did NOT buy the EW and had the infamous Valeo rad leak that destroyed his tranny ($6-9k repair bill). His modded coupe is now scrap.

[Mugen EvOlutioN]

wow thats pretty gay


i always thought on higher maintenance vehicles like AUDI/BMW/Benz u always try to stay withint that warranty time frame so u dont get a huge repair bill in case sth goes wrong, and that includes the extended warranty



I guess buttom line, get a Lexus...far more reliable than those. So u dont have to dealing with this warranty bullshit

[jlenko]

I never buy the extended warranty bullshit. That's like the extended warranty that Future Shop or Best Buy tries to sell you. If you're stupid enough to buy it... well...

[GSdreamin]

Welcome to Lubrico Warranties.

I've heard of this happening MANY times with people. They blame EVERYTHING on regular servicing and if you're 1km off of the interval they say you must follow, your screwed forever

[godwin]

Not sure at other marques, but my experiences with BMW is you get a Certified Used, they sell you the service along with the warranty. They also drop you a letter or email when to come in. They also use synthetic oil by default, so their service intervals are already based on synthetic oil's life. The oil change cycle is based on the trip computer or a year whichever comes first. So in the end you still have to change the oil at the minimum at an annual basis, because the oil breaks down due to moisture even when it is not driven.

Engines keeping efficient and clean vs oil life are two independent factors. Oil breaks down and due to heat cool cycles, unless engines are so efficient that no friction happens or even better doesn't produce any heat... oil will break down over time.

From the sounds of the OP, the warranty is not a factory warranty. Usually the factory warranty knows the manufacturer's own procedures. Not to mention most places are computerized, the warranty company won't need the buyer to prove anything since they can pull it from the dealer service computer network themselves.

But yes, there are usually 2 types of used cars on a dealership.. Ones that are certified used and have factory warranty. The others, usually got via wholesale or trade-ins etc, just have generic 3rd party warranties (confusingly could be the same marque as the dealership's principle marque). It is up to the buyer to discern the difference.

My M5 is a certified used and I am happy with the service and warranty service.

Originally Posted by ericthehalfbee

If you look at BMW, Mercedes and Audi (for example) oil changes can be anywhere from 7,500km up to 15,000km depending on the conditions under which the vehicle is driven. This is because the vehicles use synthetic oil (which lasts longer) and because modern engines are so efficient and clean that oil doesn't get dirty like it used to in old engines. So right away you're way over the requirements of the extended warranty companies who required service much more often. Even changing at the minimum (7,500 km) still puts you over.

[Expresso]

My buddy was saved $8G+ on an engine repair because of extended warranty, its not all that bad.

[Mugen EvOlutioN]

^ wat car

[Ikkaku]

Better safe than sorry with W203's


and I'm not randomly poking fun, we have one