The Reason You Lose Money on Extended Warranties
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- Опубликовано: 8 сен 2024
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I bought a 4x4 Toyota Pickup new in 1993 for $14,000...24 years later this past September I sold it for $4,000. Toyota's hold their value very well and it still ran and looked great.
14k in 1993 doesnt equate to 14k in 2017...
Jeremiah makaveli Yeah $14,000 in 1993 has the same buying power as about $23,000 in today's money. Also, 4,000 in today's money has the same buying power as 2300 in 1993.
Ok, but how will the BMW's value under a similar scenario hold up?
Really? Wow. I had a 2003 Toyota 4runner and i only got $2000 for it
Yours was apparently run into the ground and not taken care of.
I was "suckered" into a extended warranty when I bought my 2013 Ford Escape. 4 years later, the transmission failed just after the original manufacturer's warranty expired. I am so glad I got "suckered" into buying that extension, saved me $4000.
Your problem is you bought a Ford, sorry. Buy a quality car like a Toyota and don't worry about the warranty. It will NOT break in 4 years. I got suckered into the extended warranty on the Toyota and not a problem ever.
@@chrismd00 it depends on what kind of Ford. The F and E truck and van series are some of the best vehicles in the world. Not even Toyota can make a better truck or van than Ford.
Chris Coyle smart move better to get a extended warranty and not have a expensive repair bill later
Ford’s make good quality vehicles. I think they’re the best you can buy. Toyota is going to start being trash soon because of CVT transmissions.
Buying a warranty is like putting a little bit of money on the side in case something breaks down. So you really didn't save 4k. Deduct the 4k from the price of the warranty.
If you can't repair minor stuff on a bmw or Mercedes do not buy one
Exactly!!!
She has cash pilled for the repairs. She had 25,000 cash. I think she is in good position!
@@moriahjohnthejohnsons718 Yes, and she's going to need that piled up cash pretty soon. Every cent of it! ROFLMAO! 😂
What gets me is that people will gamble on the lottery or casino when the odds are many times against them. But when the odds are in their favor such as extended warranties they don’t want to chance it.
How could you possibly think it’s in your favor? Do you think the warranty companies do this because they’re nice guys?
@@tombiondi9969 I think he must sell warranties for a living.
I’ve owned Acuras, BMWs, Hondas, Minis, and Toyotas. I had extended warranties on the BMW, Mini, and Toyota. The warranty saved me thousands on the BMW and Mini, the Toyota didn’t have a single repair. So I think it comes down to the brand as to whether you should or should not
Part of my emergency fund is my personal extended warranty plan.
Also self insure my household appliances.
Never needed to use it yet in over 30 years so it just grows.
Wow your rich
Never, ever buy a extended warranty from a third party-even if it is "endorsed". They are an absolute ripoff. The finance man at the dealership will tell you stories (lies) for his and the dealership's benefit.
So where do you buy an extended warranty?
Apparently Dave doesn’t watch Doug demuro and have never owned a vehicle made by Land Rover
Or Scotty Kilmer. BMW is not a GOOD CAR. It is not reliable and it is a money pit.
Yeah he keep saying these cars are good because they are new and have a lot of gadgets in them but they are rolling junk as much as they break.
Wheres Scotty Kilmer when you really need'im.
I was just thinking that lol
Scotty has a video about extended warranties
If you follow both Ramsey and Kilmer and listen to their advice, you'll probably be alright in terms of living within your means. Not having car payments and owning 2 vehicles with less than 5k spent between them is so relieving and you'll be more proud of the ownership of a couple older vehicles than just driving a vehicle that is owned by the bank.
Rubbup your engine
Omg I was just thinking this as soon as she said "I bought a BMW" I could literally hear his laugh and his famous line of "those are just endless money pits, just throw the whole car away" reciting in my head 🤣🤣🤣🤣🤣 the fact that she said she already has $40,000.00 saved up for her car repairs is ridiculous, you're paying more on repairs than what the actual car is even worth ... I mean she practically laughed at herself when dave said "well at that point just buy another one lol" like use your head people 🤦♀️🤦♀️🤦♀️🤦♀️🤦♀️🤦♀️🤦♀️🤦♀️🤦♀️
Extended warranties are a gamble- sometimes you win- sometimes you lose. All it is, is insurance, so your paying for repairs up front, or repairs you'll never need.
not a gamble...odds are heavily in favor that they won't pay out for you
They don't always pay out either. It happened to me. If you have ever had to deal with the games an insurance adjuster has played when they do not want to pay on a covered item you will understand. It happened to me once with a company that was based in Illinois.
Her mistake was buying a money pit such as a BMW. They are not as high quality as they were 15 or 20 years ago. Just wait until she has to take it in for repairs...
BMW were never high quality. I have owned 3...1987, 1992, 1999. All were lemons. Never will I buy another Bimmer.
Want luxury... buy a Lexus! They are extremely fancy Toyota's after all!
@@DeathMammoth91 lexus are not cheap to repair in comparison to a toyota They also do not use toyota parts. It's a common minscomception
With $25000 you could’ve get a brand new Toyota camry and still have money left.
Yup. People have no idea how much maintenance cost on vehicles period smh
I once bought an extended warranty. When it came time to use it the company had magically went out of business. Probably reopened under a new name.
Keep in mind that all of the statistics were “on average”. You should also take into consideration how much you will drive. I purchased a car with 35k miles, with an extended warranty until 109k miles or 4 years. I got to 109k miles in 3 years. The warranty cost me an additional $2,500. By the time the warranty was up, I had accumulated over $10,500 in repairs, ALL covered by the warranty. Do your research on which company the dealership is offering. Some are better than others, but do it on a case by case basis, don’t always look at average statistics
If you had $10500 in repairs between 35k miles and 109k miles then you have a terrible vehicle.
@Andrei MTM - and if that car was a Toyota Camry, you’d have put only about $700 in oil changes over the same period of time. The fact that you have to buy that kind of extended warranty in the first place speaks to the horrible reliability of these over priced cars. People are willing to shell out this kind of money for a badge on a car.
@@aeromedical6750 Exactly. That is precisely why my family of six all drive used Land Cruisers. Superb reliabiltiy, safefty, dependability and low cost to own.
@@richienell You are right Richie! I haven't had any more than that across 9 vehicles in 50 years.
The CPO Acuras now come with a 2 yea 100,000 mile bumper to bumper warranty. That would be good for a few people like you.
Alternatively, Used car warranties are spectacular. In my experience, a few hundred dollars on a 6 month- 2 year on a 5-10k used car can save thousands in getting minor/major issues fixed if you have a keen eye.
u must sell them
He is so right about extended warranties. I got a 2006 Impala in 2007, so I saved on cost there. I got the extended warranty which cost me $2000. I was told if I don't use it I would get it back in 5 years. If I did use it, even on a $1000 repair I would loose it. I never used it. 5 years later the company goes out of business and doesn't return my money. Total scam don't fall for it.
When I buy electrical item...new TV, Washing Machine etc I would always take the extended warranty provided I could get a discount on the main item. I would usually get a discount because there is an incentive for the salesman to sell the warranty. I the U.K. under law you have 14 days to cancel no questions asked. I would then cancel the warranty as soon as I get home...so in that way I always found them useful.
That's called "scamming".
The thing is with BMW is you have to replace the blinker fluid ;)
Are you kidding me? BMW drivers don't use blinkers.
@@orochicc002 The blinkers don't work without fluid, most BMW owners don't even know how to check it.
Its good to have lifetime warranty or extended warranty accompanied in a product in order to guarantee quality control, create maintain GDP as well as abilities of preservation of technical skills in most industries.
You buy a Lexus without a warranty not a BMW.
Yes sir
Ya... Because Lexus doesn't have massive electrical flaws... Lexus is an overpriced Toyota with headaches. If you want to buy a higher end car buy one but don't get just some sloppy car in a frog suit.
@@markwestgate9734 that's a funny analogy...who or what is wearing the frog suit, the car or the driver?
sorry by 'funny' I don't mean odd; I mean haha.
Scott Prost-Domasky probably the driver Although a frog costume for a car might be fun
Very wise young lady. Keep up the great work!
@SpankBuda that car trash
The way I look at it is that IF replacing the item would not be painful, then you probably don't need an extended warranty. If it's a major purchase and replacing it would be a hardship, it might be worth it. Places that push extended warranties really want their salespeople to sell them. You can sometimes get them to discount the item in exchange for buying the warranty. Or sell you a 3 year extended warranty for the price of the one year (technically, they discount the item and you pay full price for the warranty). We did this all the time at the big box electronics store I worked at.
As for warranties on cars can be worth it. Search for "Doug DeMuro" and "bumper to bumper warranty" to see an example.
Life is full of gambles. Dave makes some very good points. The person selling you the warranty is getting a sizable commission, and this makes you wonder about the value of the warranty to you. When they push hard to sell it, including reducing the price when you decline, it makes you wonder. I say buy a car that is historically reliable and look for a CPO warranty if possible. Remember that the warranty is backed by a third party. Who knows what they will and will not actually cover.
Just negotiate warranty’s down to cost. They are pretty good deals
I work for a dealership and get a full warranty for 1500 or sp
Issue is most cars nowadays are built cheap n all have recalls or some long listing issues
Consumer Reports says don't buy them. Half of the people never use it and the half that do don't save what they paid for the warranty.
BMW= Breaking My Wallet
Buying a status symbol only to struggle to try to keep it running.
It really is a shame. BMW has really nailed it in terms of styling and performance (when they are not in the shop). You absolutely are a fool to ever own one of these cars outside of warranty unless you have DEEP pockets. Any extended warranty needs to a BMW certified warranty or it’s not worth the paper it’s printed on.
My buddy bought a used 5 series that had only 55K miles on it. He absolutely loved it when it wasn’t in the shop. Within a year he had to replace the brakes, water pump, serpentine belt, oxygen sensor, and front struts. In total he put over 6K in repairs to a vehicle with 55k miles on it. That was enough for him and he ended up trading it in on a truck.
I need to buy a really expensive car so I can automatically gain respect by the cool people and instantly get laid, of course they arent gonna know that will eat up 90% of my monthly budget and will be broke every week, and still living with my parents
hilarious.....lololol
Yes and no, only buy a bmw if you can afford to spend a few grand a year on repairs, while thats not always gonna be the cost, on average if you dont have enough money to afford the maintenance, dont buy a beamer
bought a 10 year old vehicle for $16k. bought a 5 year 100k mile warranty for $2900. after 5 months needed a $300 repair, I only had to pay $100 deductible. the months later it needed a $1100 repair, I paid a $100 deductible. three months later it needed a $700 repair, I paid a $100 deductible. I have 3.5 years left on the warranty and I pray on a daily that the engine and transmission goes bad within the next couple of years.
Interesting. $3,200 total thus far to repair which is 20 percent of the asset. Small repairs appear costly. The first was 33 percent of cost, the second was 9 percent, the third was 14 percent. You're paying 14.2 percent/1.5 years ~ 9.5 percent/year. Compare those percentages to a blue chip stock that pays 4 percent per year. Unfortunately, the asset depreciates during this time. Sorry G.G.
In my opinion extended warranty is good for high end cars such BMW,Mercedes etc. I have a 2014 bmw 335i Msport for couple years and I can tell you extended warranty covers other parts that a regular warranty wouldn’t cover. Knowing how expensive each parts cost for BMW and to repair as well. I had some minor issues after 2 years and Beamer fix it right away but without it I would be paying tons of money on it.
I don't know, Dave. I paid around 3k for a warranty good until 150k miles and had 50k when bought. No major issues but nickel and dime issues with a Cadillac have arose and that warranty has almost paid for itself. I like the peace of mind. Keep rockin'!
I think what Dave doesn't understand is that not all warranties are bad. I purchased an extended warranty for my 2017 Cadillac which was three years old when I bought it, and paid only $1,927 which covered six years. I used it for a rear axle differential and an infotainment system replacement. Both repairs were $$$$, and I paid only $50 in total deductibles between the two repairs. And then I traded in the Cadillac and bought a Mazda last month, and the warranty company on my Caddy gave me a pro-rated refund check in the mail, so I ended up paying only $1,200 for it to have two expensive repairs done. So it paid for itself, plus more.
From my experience, there is always a loop hole, and they say it's not covered. it's all a scam, Warranties
Agree..I had a home warranty. AC broke in Houston in August. They covered the part $200 but not the mods it would cost to install it ($1100). I happened to know an HVAC guy that hooked me up for $800.
After that, NEVER AGAIN will I trust any warranty company.
Change your oil, don't beat your vehicle, you wont need a extended warranty.
@@mopar21
Ha, not a modern BMW....
@@raydavies6236 what do you drive?
Extended warranties for Subaru’s, Toyotas, Hondas, are pretty useless as they are very reliable and don’t need it but for Chrysler, bmw and Mercedes you’re definitely gonna need it 😂
Any idea on Nissan? I just bought one brand new with the extended warranty 😬
Just toyota, Subaru and Honda are good without warranty all other companies buy it
@@HoaNguyen-th5ml buying a brand new car with extended warranty is even worse lol...it comes with manufacturer warranty up to maybe 3 to 5 years. Most people dont even keep their car that long
@@HoaNguyen-th5ml cvt havent got a great track record... nissan kind of went down hill in early 2000's when renault took over...
@@HoaNguyen-th5ml You did the right thing!! Nissans *_USED TO_* be reliable maybe 20 years ago. Today's Nissans are not reliable at all. You dodged a bullet buy buying the extended warranty. Personally, the only vehicle I would *NOT* buy an extended warranty is for a TOYOTA product (Toyota and Lexus).
As someone stated earlier it's like any other insurance, if you have comp and collision for 10 years but never get in an accident you lost money, but if you total your car in a month you'll be glad you had it. It's also the reliability of the car, the price the warranty costs, what it covers and the reputation of the company you bought the warranty from.
FYI, BMW's are expensive to fix. When it comes to European cars it is best to use factory parts rather then aftermarket parts, which usually are Chinese knock offs. Some years ago I bought a 06 Explorer with the Ford VIP warranty cost $2800. It turns out it paid for itself to just under $10k.(Repairs: Thermostat Housing, 2 fuel pumps, 2 Blend door motors and a Transmission.) I usually fix my own however in this case I figured what was my time worth $$ versus warranty cost and chose to let someone else turn the wrench rather then me. Once the warranty ended we traded off the car.
If you want an extended warranty, buy one on your own not from a dealer. You will save a lot of money, same thing with Gap insurance.
Thank you, Dave for explaining this in a way we can all understand. I have had this policy for the past forty years and came out ahead many times over being self-insured and paying out of pocket whenever something broke.
Sure you did. The warranty/service plan companies are NOT in the business to pay out claims.
@@alinatamashevich3354the many benefit the few I guess.. they've paid out more in claims than we paid for the insurance
I get junk mail from these extended warranty companies who are trying to sell me coverage on my two year old Honda Accord with less than 25,000 on the odometer. What a scam.
jvolstad Did you purchase it from Best Buy? Lol
I'm not sure what they are thinking. I get junk mail offering an extended warranty on my cars, I have a 98 Toyota and 99 Honda.
Oh, those companies are relentless. I’ve gotten no less than ten “this is your final notice to purchase an extended warranty” from the same organization.
Lol
Never take out a warranty through a third party, only get the one from the car company (such as Chrysler).
I have the same vehicle. You have to sell before the 50,000 mile warranty expires. They also have a huge depreciation which I took advantage of by buying a used one for $21k with 12k miles. Used it for two years and sold it with 5k miles left on warranty. They are an extremely fun car but very unreliable and expensive to repair
Most people don't realize that the price of an extended warranty and gap insurance IS negotiable. This is where dealers make most of their money. They will often sell a car at cost, but they mark up the prices of warranty and gap. An extended warranty that they sell you for $3500 will sometimes cost the dealer well under $2000. Gap can cost a dealership $200 but will sell it for $1000. Sometimes a dealer just cares about sales volume to get incentives and rebates back from their manufacturer, because these are all the places they really make their money
don't but the warranty at the dealership and if you did, one cancel it don't let the dealership fool you. Try going thru your bank and the warranty more than likely will be cheaper
Where else can you buy warranties?
I spent an extra $1900 on an extended warranty on my 1 year old Impala. Glad I did, it paid for a $3500 repair a couple years later when the trans went out. The other place I buy warranties is my Dell computers; they have more than paid for themselves, several times over..
Warranties and insurance or legalized gambling. My BMW 335 was piece of junk and the warranty was worth it. I got extended warranty on my Acura for $1218 I didn’t think I’d need it, but I still got it. They ended up paying $780 in repairs, when I sold the car I canceled it really and got prorated refund of $450, so I ended up ahead a few $’s. My experiences are positive but on average they are not good investments, Dave and Consumer Reports agree. If you get one make sure there is $50 to $0 deductible and it is refundable if you change cars before warranty expires.
If you bought a BMW you will probably need that warranty.
Garbage Car
have you owned a BMW? Dont think so
Dave is right.
Whenever I have asked about the warranty whenever I purchased a German car, people get suckered into buying one because they really can’t afford the car; I have never bought any of these warranties because they were very costly (I’d want the best coverage) and the repairs for these cars have always been much less than the cost of the warranty itself.
Man, not the 7 series I bought, but the warranty saved a buddy’s 6 series $3500 brake job from being billed to him
Hks 123 depends you get an m3 or 5 u would be nuts to drive without a warranty
I never had problem with the dealership or CarMax extended warranties in my cars they always solved all my claims but other companies offering these kind of warranties are not good.
Do you recommend Carmax and do you recommend their warranty?
I used to by warranties when I was broke. Now I’m debt free thanks to Dave. I canceled my warranty a couple years into it and got 900 back. I was happy. I’ve come to realize after listening to Dave and hundreds or thousands of calls, if you afford to pay cash to have something fixed, be it a laptop or a car or a pet or a dishwasher, you can’t afford the item.
This is a BMW not a laptop.....BMW warranty is a good buy
I went and looked at a Mercedes S550 and asked the salesman about a warranty and he said he doesn't recommend the one he sells LOL....
I wonder how many salesman feel that way but will never say that to a potential customer...
Honest person is always appreciate.
Cerron Pritchett That's an honest man. I have a 2007 Honda crv every time I go to the dealer for oil change or other repairs they always tell me I need something they wrote down the list that need to be done, it would cost, over $2000. I said how could that be, I have a very good maintenance records. So I had another guy checked my car, he said my car doesn't need anything, that the dealer mechanics were just trying to find something to scam me. He even told me he's being honest in fact he said he's too honest.
@@bb89670 Or he's not honest and is telling you to not repair things that need repaired so that way when they lead to a bigger more expensive problem you'll take it back to him thinking he's an honest mechanic and pay him to fix your car while you're just thinking it's a bad lemon car.
I'm just teasing, but everyone has an agenda, but I hope you did find a good honest mechanic because that would be priceless in value.
At the end of the day, if you can afford to pay cash for a car or truck then you can and should pay cash for an extended warranty as well, especially if you plan on keeping the car along time. All cars break down, you can research this and research that, but Toyota and Honda have service departments just like GM and BMW do. The last extended warranty I bought I paid $ 1927 for it, to date it has covered just over $3000 in repairs and the warranty doesn't expire for another 17 months. Not to mention I was given a rental to drive while my vehicle was being repaired at no charge as well. End of story.
I agree with Dave. Wondering why he recommends collision insurance. Using the same logic, wouldn't it make more sense to cover your own repairs?
I'm applying this logic to my 2015 Range Rover Evoque. I was just offered an extended warranty. I have them emailing me all the coverage particulars but at $6286 for 4yrs of coverage...the decision is already made.
They started at $2k for the extended Toyota warranty on a 2016 and quit after a $400 dollar offer.
$6k? So they are basically telling you they anticipate it dying during that span?
@@RogerPack Yes, or they wouldn't have put such a specific time constraint on it. I do think that they're all set up like that though.
That lifetime powertrain warranty paid for itself. My wife’s car already had to have a transmission replaced. And, I didn’t really pay extra for it, either. I simply didn’t try to talk the car price down any.
I purchased a new Lexus in 2003 ( from a car dealer, not Lexus) I traded in an old beat up SL and saved $27,000 over what the Lexus dealer wanted. Then I purchased the extended warranty from Lexus for $2500! Bumper to bumper coverage for 100,000 mile. It saved me fortune in repairs, like the height adjustment for 4wheel drive broke. It was a $2000 repair but the warranty coverage covered every penny. Heck some of the Mark Levinson stereo system speakers were crackling and they replaced all of those for free. Other than routine maintenance I never paid a dime. To me it was worth every penny for the extended warranty from the manufacture. Still have a car still going great!
I bought an extended warranty once. It was not from the manufacturer on a car. The car had a leaking head gasket three years later. The warranty was for five years. When I went to the manufacturers service department for repairs, the warranty company was pulling a lot of crap, and kept coming up with excuses not to do the repairs. They wanted me to authorize a $1,500 teardown, and did not give an authorization, nor did they approve the repair which required a teardown in order to inspect for the repair. I asked the service department what would happen if they did not approve the repair. They told me I would be responsible for the cost to repair, and cover the repair. The head gasket was also listed on the warranty as a covered item. The warranty company also wanted to send out an adjuster to inspect the car after it was torn apart. All of the service history on the car was also on a computerized record with the manufacturers service departments, and it showed all of the services the manufacturer recommended per their recommendations were completed on time at the mileage recommended. The warranty company tried to say my car was not serviced, and the dealership service department said it was not true, and it showed no signs of abuse. The warranty company did not repair the car, and it sat for two weeks with no approval for repair or teardown. The dealership also told me they used to sell warranties from the warranty company I had but had to kick them off of their premisis because they were a bad company with a history of mistreating customers, and failure to approve repairs on covered items. The $1,500 paid for the warranty was wasted. When I cancelled the warranty, they prorated, and only refunded $350.00. Some of these companies are a rip off, and are in business only to make money for themselves.
What he's mentioning are typical business metrics of any insurance company. An extended warranty is essentially a secondary insurance on your car within certain parameters. You have to decide whether you are keeping that Jeep Wrangler for 10 years till it dies or just buying it for the moment. We buy insurances to counteract risks. So research your insurance/warranty well and make sure it's what's best for your situation. Better yet, lease within the manufacturers warranty period. Some people just want peace of mind. I don't know where Dave lives but where I do there are no older model BMWs on the road. They just don't make it.
Give Honda some love. They are great cars and last forever.
I love my GMC too much
This is true
@@trumpenhammerofkek4821 Government Motor Corporation
Hecho en Mexico
She spent the $4000 on a new transmission after she talked to Dave.
I didn’t 😉 Still running with no issues
In Ontario Canada for example, an extended warranty that cost 5k the tax is 13% plus the interest on the finance. In the end you would pay 8k for that warranty.
Its better to put the 8k a side for repairs you may or may not need as oppose to pay up front for repairs you may or may not need.
I always buy extended warranties. You will make your money back somewhere for sure. I always use my product for full. Whatever i buy i use them everyday
the solution is simple. buy a Toyota Camry and drive it forever
Yuck...too bland.
@@brucefredrickson9677
claiming that something is "bland" is not an argument.
Wrong. Toyota’s break just like any other cars. It’s about chips and computers people, not the engine!!!
Just retired my first Camry at 310000 miles. Engine still runs like a top, CA lame emission laws put it out of commission.
Randy Force right, and what is it- 1999 or early 2000? Anything after 2008, and especially new cars now is not what they used to be. Ur transmission is computer controlled now. Ur electric break switch goes out and that’s a couple of grand for a tiny part and to replace it.
You better have the AWD one if you get REAL winters, and for a BMW, I would get an extended warranty "bumper to bumper " from BMW dealer specially cuz it's a used car. Good luck.
We bought an extended warranty on a bmw and it was a great decision! The warranty cover many of the very expensive repairs, it was worth every penny.
I bought a 2500 warranty for an 8500 dollar car and within eight months the warranty has covered 3500 dollars worth of expenses and the transmission is going out and I’ve still got 18000 miles left on the warranty. Overall it was a good investment for me but everyones situation is different.
I always buy used and have never bought a warranty. 1) I only buy Toyotas and Hondas 2) I always have my mechanic check them out before purchase 3) I usually get a good enough deal that I won't mind putting another grand into the vehicle if I needed to (basically I self-insure). So far I have been fortunate.
2012 BMW 750li extended warranty 5k upfront. 17k in repairs within 15 months. Luxury vehicles need extended warrenty
I owned a 2011 750Li, bought the platinum warranty at BMW$3800, boy did it pay for itself. Fuel pump, high pressure pump, spark plugs, water hoses, overheating... the list goes on.. I no longer own a BMW, stay away from these cars!
I have to disagree on this one. The bmw cost more to fix, and needs big repairs more often. However it’d have to be a warranty through bmw which you could likely only get if it’s certified pre owned. Never pay for a warranty though a used car lot that does 3rd party warranty’s. The 3rd party adjusters will find any way possible to deny the claim.
Spent 2k on a 7 year bumper to bumper... dealership has spent over 6k fixing it. I'd say it's worth it.
for you it turned out to be worth it. for every person that says it's worth it there are 7 that say it was a waste of money. that's how insurance work.... the idea is to charge you for something that you statistically will under consume.
even if you it was worth it for you they definitely overpriced the repairs so it looks for you as if you saved alot of money
Truer words were never spoken. Extended warranties are not practical. Save your money by putting the cost of the warranty in the bank if you have a breakdown you can cover the cost yourself, it's cheaper thst way.
Nothing happened to my BMW during extended warranty ever. It’s afterwards craps started to happen.
I paid for a 2 year extended warranty on my new samsung laptop back in 2012, and now the laptop is 5 years old and still working just fine, apart from the fan getting a bit noisy. There is no money in the budget to replace it. I think its doing really really well. I could have got a Lenovo one cheaper but i wonder if it would still be doing so well. Of course now I wish I hadn't got that extended warranty but then again is a gamble to know what's going to be good and what isn't.
Extended warranties are repair insurance. On any insurance policy you’re expected to pay more for coverage than what they’ll pay out. I wonder if Dave feels differently about homeowners insurance.
My rule of thumb is if I keep enough money in my savings on a regular basis to cover the complete replacemnt cost of said item, (phone, car, house, ect.) Then insurance would be a waste of money, BUT if I don't keep enough in savings to cover than insurance makes complete sense.
Carshield commercials make it sound like your engine is just going to drop from your car at 50,001 miles.
This holds true for all warranties and insurances, on a statistical basis they must return less than they cost, or it would be impossible for the insurance company to self-sustain. They are useful in situations where the money involved is big enough that loss of X value in absolute terms equals loss of a bigger than X value for that specific person.
I can agree somewhat with Dave. I bought the extended warranty for my 2011 Mustang convertible which obviously kicks in when the factory one expires. It ended up with convertible top problems, which the extended warranty covered, along with some other stuff, so I ended up getting some value out of it. After the car got in a fight with a deer, I replaced it with a used 2012, no extended warranty. My best friend is also my mechanic and gets all his stuff wholesale. They wanted over $2000.00 for the warranty. Way too much for what can go wrong with the car. Either way, do your homework and don't buy a model with a bad repair history. Stay away from the European stuff if you can't afford to fix the problems that go with them.
I did really well with an extended warranty on my Ford Explorer. Cost me $1,800. Had to get 3 major repairs including a transmission rebuild and an ac compressor plus a few small things. In the end they paid out just over $5,000 total. Better move was to not buy an Exploder but I didn't know that yet. Warranty company was easy to deal with too, they came out and inspected the car before paying for the transmission but otherwise my mechanic called and told them what it would cost and they paid it, minus sales tax which I had to pay.
I tell sales people that an extended warranty means the car is so unreliable that they want me to buy $500 or a grand in breakdown insurance for it, suggesting that the risk of a loss of umpteen thousand dollars must be pretty high to justify that premium, and maybe I need to look for a more reliable model. Shuts them right up.
Certified warranty on a Lexus is 6 years from day the car was originally sold with unlimited miles. You can extend that 1 to 5 additional years. If you buy a 3 year old certified Lexus and extend it out 5 years at a cost of $3700 you will have 8 years of bumper to bumper coverage with no limit on miles. It is backed by Lexus. It is also transferable. That car can be sold 6 years from now and the warranty will transfer one time. If it has 300,000 miles at the time of sale, the seller can get more money and the buyer will have 2 years remaining on the bumper to bumper warranty... still with unlimited miles.
How is that not a good deal?
You’ll need the warranty + with a plastic BMW !!!!
This just proves that it’s a good business plan not that it’s useless. You definitely need extended warranty. I use to have a BMW 745 and had an engine issue that was 8k, my friend did it for 4K. But if I spent the money on the warranty I would of been covered and could of kept the car. I sold it after the repair just in case something else went wrong because I blew the money I saved for repairs. This guy is smart and I respect him but this is a bad discussion and bad move if you don’t have extended warranty.
There’s a lot of things we pay for and hope we’ll never use it. Home insurance and car insurance for example. I’ve been happy to have an extended warranty because when I needed an engine replaced it was there to cover the cost.
His math is ridiculous.
I just had my AC repaired on a different. $6 grand. I’m so glad I had a warranty
I think it just depends on the price of the warranty and what they cover. For instance, my $500 TV had an extended warranty for $24 covering three years. It broke 2.5 years in and I ended up with a new TV at no additional cost. Not to mention the issue didn't affect the viewing on the old TV and they let me keep it.
My credit union offers a full coverage extended warranty for $800 for 6 years. Even less money if you don't want the "covers anything" package. $800 across 6 years is nothing and you're protected if something happens.
On the other hand the warranty from the dealer was about $2,000. Never get the warranty from the dealer.
It's a BMW. It is going to break and it is going to break a LOT.
Mark of Excellence stereotypes aren't always accurate. One of the least reliable cars I've owned has been a GM, but doesn't mean they are all bad.
y2ksierra Actually, statistics show otherwise. General Motors leads in the top 10 for quality for 2017, while BMW is very low on the list. The common stereotype is that they are better cars. They are not and have not been since the late 80s. This is the same case with Mercedes-Benz.
I'm sure BMW has made one or two good cars over the years. But statistically speaking the majority of what they put out is extremely unreliable.
I should add that this is part of their business model. They do it on purpose. Have you ever taken a BMW for service? It is extremely expensive. That's where they make their money. It is meant to last for the life of the warranty and that is it.
Mark of Excellence I service all of my cars myself, so no I haven't. Taking a GM to the dealer won't exactly make you feel good either, nor is the dealership experience pleasant. They call them "stealerships" for a reason. If you think bmw are bad cars, or break down all the time, then it is your opinion, not a fact. Suggesting that any make or model "breaks down all the time" is simply not the case as cars of today are just about all reliable. Well, maybe except for alpha 😀
Dave Ramsey and Scotty Kilmer need to sit down and chat.
Scotty will have Dave recommending 94 Celicas to all his future callers.
@scottykilmer
Yeah because Scotty Kilmer is right
Lol scotty kilmer needs to sit down with dave and have eric the car guy, south main auto, and flat rate master give them both a talk.
@1234 not true, I have seen him say a new BMW is a good car, and if you know anything about German cars u know BMW are electrical nightmares.
I disagree with dave. I bought an extended warranty for 1200. 2 years later I had to get a transmission and odometer fix for 3000 that the warranty covered. It also paid for my rental while being fix. I think I made my 1200 worth while
The gamble pays off as long as you aren’t the one that needs the $10k repair. It’s one thing if you’re talking about a $500 appliance. Vehicles and repairs are way too expensive to mess with now.
Count on it breaking down more often than your average vehicle, I would never buy a bmw.
You and many sane people! One has to be totally insane to buy a BMW (or Mercedes, or Audi, or VW etc.), unless you are insanely wealthy, and then you can justify that you are buying it for the "drive", "handling", "performance" and what not, as the constant breaking down and cost to fix it, would not matter then. Even then, I would only LEASE one till the warranty ran out!
As Scotty Kilmer would say, those BMWs turn into money pits real fast.
🤣🤣🤣
in uk it's bob marley and the wankers
BMW no warranty don’t keep it they are money pits. Had a 08 335i and 07 650i both had similar issues. Luckily I did most of the repairs myself and saved a lot, but for someone that is entrusted in dealer or indie repairs don’t buy one without it.
Winn3r You are 100% correct! If you want a luxury vehicle I would ONLY recommend a Lexus. They are basically really fancy Toyota's, so you know they are bulletproof and they are!
I've never had a problem with my Infiniti but i would be very scared to buy a BMW without a warranty just from what I've heard about them
I owned 2 BMWs and I can tell from my own experience. BMWs are great cars, some say BMW is addictive, once you own 1, you never want another brand. This is true for me since I like sporty handling.
My recommendation is that you should buy used Beammers (depreciation on BMW is real). The thing is that if your budget for cars is $20,000, for example, you would want to look for a car that cost $15,000-$16,000 and save that $5000 for maintenance and repairs.
Also, unless you are very good with DIY, buy naturally aspirated engine (non-turbo) Beammers. The N52 motor is well known for reliability.
@Nick Le - I’ve always wanted to buy a BMW. My target car is a 328xi. I love the aesthetics of BMW and love how the feel when I’ve test driven them. That being said, I have several friends who have owned them. They all say the same thing -- own them until the factory warranty runs out and then run, not walk to the nearest dealership to trade them on something else. This is really what makes me nervous about owning one. I’m certainly not going to buy one new. If I buy a 3 to 4 year old model, I would essentially be paying 20 to 25K for a car with 1 year of factory warranty left on it. Sorry, I’ll stick with my Acura TL which has a MUCH better reputation for reliability.
Ur first mistake is buying bmw
Dave she didn't buy a Honda!! Rough advice!!
When I was younger I always wondered what it would be like to own a brand new car. Now even though I love how they smell and feel I just can't see putting all that money into something that depreciates so much in short time. I would find a car I really like and want to keep, and find one that's 2 or 3 years old in like new condition and pay for it cash. I don't care much about luxury, just something comfortable with a nice ride and reliable.
Think same way until I seen used car prices on junk or high miles opted for a new Malibu base model for $24650 out door. Longs I KP it for 15 yrs getting my money's worth
I think it'd be smart to buy an extended warranty if she bought a 328i/335i if she was planning on keeping it after the factory warranty ran out, no? I wouldnt buy it for a toyota or honda, but BMW? They're not the best when it comes to reliability. Excellent cars but too much technology to go wrong.
Bmw are nice vheicles. However. They depreciate very quickly in resale price. Toyota/lexus maintain resale value longer and the pool of buyers is bigger by far when it comes to selling them.
I bought an extended warranty on a laptop when it became obsolete in before the warranty expired I dropped it because it covered accidental damage and I got a free upgrade I got $1,000 computer for 300
How is this very different from insurance then, that's like saying since statistically your house won't burn down you don't need fire insurance or whatever.
@william leach -- uhh, because if you are financing a home, you are required to have home owners insurance. Also, you need to go back and listen to the piece he does on insurance in the Total Money Over. He recommends insurance for anything you cannot self insure against. Most people could not absorb the out of pocket cost to replace an entire paid for home if something like a fire caused a total loss. Hence why he advocates home owners insurance. If you plan carefully, you should be able cover the average cost of repairs when a car goes out of warranty.
I bet you all don't think car insurance is a waste. I'm sure you ALL happily pay the premiums each month. The extended service plan ("warranty") is no different...meaning you don't expect to use it, but it's there when you do need to use it. And most people won't use it but the percentage that do, actually save alot. Essentially you need to gamble if you will be a user of it during the term, or not.
with the BMW you will use it and come out ahead.
Bought extended warranty on a Dell computer which kept messing up. They paid several times to send a tech to my house and they could not fix the problem. They replaced the computer. Bought extended warranty on a Canon camera which failed. They gave me back the entire purchase price of over $1000. Bought extended warranty on a Nissan car whose XM radio failed just after the factory included four year warranty. The repair was $200 in parts and 15 hours in labor. I don't know what the labor cost was but we all know it was at least $75 per shop hour. The extended warranty was $3000. So I have got $1325 back out of that now. I believe in warranties.
My God listening to these 2 talk was very painful.
She made a right choice for the extended warranty cause its a freakin BMW . Luxury cars except Lexus start to have problems right after the warranty expires.
But if ur buying a normal car i.e Toyota honda then u DONT need extended warrenty
My brother purchased an extended warranty when he bought a used 2 year old Toyota Corolla with 40K miles on it from the dealer. Within the next 5K miles HE drove the car, the automatic transmission went bad and needed to be fully replaced. On a 2016 Corolla with only 45K miles on it!!! Sure, that's not supposed to happen to a Corolla...but it did. Extended warranty covered every penny on transmission replacement. If I knew the previous owner, I'd lean toward bypassing the extended warranty. But you never know.
Wouldn't a 2 year old vehicle still be under manufacturer warranty?
GREAT ADVICE !" Thank you Dave in 2020 wisdom never goes out of style,God bless you sir forever Amen
I don't believe vehicles in need of $4k mechanical repairs within 5 years to be a "great car."
I agree with Dave on this one. He explains the math well but it's really even more simple than that. The warranty company has to make a profit so they need to take in more $ than they pay out so on average the purchaser of the warranty is paying more for the coverage then the company will payout for repairs. If you happen to have a large repair of a bunch of smaller ones you would be ahead of the game by buying the warranty but obviously thats the exception or the warranty company would be broke. Its much like a casino or an insurance company they need to take in more than they pay out or the math just doesn't work! AND you really need to look carefully at what you are buying. Most domestic vehicles come with a 3yr 36k mile bumper to bumper warranty and 5 yr 60K mile power-train warranty. The extended warranty is usually 60k bumper to bumper so essentially you are only extending the coverage for non power-train repairs for and additional 24k because the power-train is still covered by the regular warranty. Is that worth $1-2K?? Not likely. How many cars need a significant non power train repair in the first 60K miles?? Not many.
I just bought one thru gm directly 2500 covers power train n everything else for 8 yrs or 100k miles
I personally know over 20 people who have bought extended warranties and everyone one of them has used it...
Do you sell them?
Yes, absolutely you need a warranty with all the electronics in that vehicle. I am an Automotive Engineer with Honda, labor and OEM German parts add up tremendously. Now if the extended warranty doesn't cover any of the electronics in the vehicle than it is junk.
Sorry but extended warranty on my laptop was great beats paying another $2000.00 for a new one. Warranty on washer, Dryer, 65 inch or bigger tv makes sense to who can haul it in or afford what $50.00 or $75.00 an hour for repair person.
Have to use your brain would I get a warranty on $20.00 speaker no but on $1000 ipad yes if you drop it, spell something on it. You will pay pretty much close the cost of a new one to get it fixed.