OK, so you’re at the car dealer and there are two different warranties that may apply to a pre-owned BMW. The first is a Certified Pre-Owned Warranty which is only available through an actual BMW Dealer. This warranty comes ‘free’ when you buy a Certified Pre-Owned BMW. The second is an Extended Warranty which is available from what I call ‘B-Dealers’ and it is issued by a private company not owned by BMW. These warranties can be a good thing and you can make them work for you. But here are some basic things you need to know before getting all excited about the fact that you are ‘covered.’
The Certified Pre-Owned BMW comes with the Certified Pre-Owned Warranty, which in most cases will cover you up to 8 years or 100k miles and is a pretty decent warranty. It better be, because you paid a lot for it. Compare the purchase price of your CPO car with that of a non-CPO car with the same year and mileage. You’ll notice that you probably spent over $2000 more to get a CPO car. What exactly is so great about a CPO car?? Nothing. It is most likely a lease return that they detail and do an oil change on and then re-introduce it as a CPO car. It probably goes through some sort of ‘146 point check’ which again means nothing. So in essence a CPO car is just a BMW with a warranty built into the purchase price. It’s a pretty decent warranty, but it will only fix things when they break. You also must take the car to a BMW Service Center to have it repaired, which means that in San Diego you’ll be able to bring it in in about 3 weeks from the time you call. For our customers that have a CPO Warranty, we try to find as much items in need of repair as we can and give this list to them. That way they can plan ahead to bring their car to BMW and have those items fixed under warranty. I think the most important thing you can do with a CPO warranty is to have someone look at the car frequently in order to maximize what you have already paid for.
The Extended Warranty is probably the better option. It allows you to go to any service center to have the work performed as long as the service center accepts extended warranties. In San Diego, we do a fair amount of extended warranty work on BMWs. This warranty program is issued through a private company and you may or may not want to sign on the dotted line when you buy that used BMW. Unlike extended warranties for electronics and appliances, these warranties can be great, but you need to buy correctly. If you decide to purchase the warranty, make sure that you understand the terms and that there is not an extreme amount of fine print. More importantly, buythe most expensive package that the warranty company offers. Time after time I see customers with BMWs in San Diego hand me their warranty info only to find out that ‘that item isn’t covered’ because they opted for the ‘gold’ package instead of the ‘platinum.’ So buy the most coverage that you can as it is usually those extra little items that fail and not the engine or transmission.
Making your money back on the warranty is probably the most satisfying thing you can achieve. How can this be done?? First, don’t buy it if you don’t need it. Many BMWs will not benefit from an extended warranty. As a general rule we say that an extended warranty is good for the following cars – X5, X3, 740i, 740il, 745i, 745li, 750i, 760li, 540i, 545i, etc, etc. Any BMW with a V8 engine or any of the X-series cars are good candidates for an extended warranty. These cars need a lot of maintenance and the warranty will cover a lot of it. Most 3-series cars and 5-series cars with the in-line 6 cylinder engine are pretty damn reliable, and they never seem to recoup the money that was spent on the warranty. So I generally don’t recommend that you buy one for those cars unless you are really paranoid about a failing transmission.
In the world of auto warranties, my best advice is to get the best coverage you can, and have a clear understanding as to what is covered and what isn’t. Find a BMW service center that can make the warranty work for you and help you maximize your purchase. Another way to maximize your warranty coverage is to ask your BMW mechanic if there are additional items that could be replaced that aren’t covered, but are items that would have over-lapping labor. For instance, if your water pump fails and the warranty covers it, pay for a thermostat or new belts out of pocket as the labor is pretty much paid for by your warranty. I wouldn’t get too excited about having a CPO warranty, nor would I pay extra for the car because it’s a CPO. Instead, I would opt for the cheaper price at a ‘B-dealer’ and add on the extended warranty — but only if it’s appropriate for the BMW your are purchasing.
Chris Keefer
La Jolla Independent BMW Service in San Diego
This was really helpful. I am looking at purchasing from a ‘B-Dealer’ It is a 330xi and still has the 50,000/4 Year warranty and appears to be in great shape. I know you mentioned the 3-Series remain to be reliable cars, but what about the AWD system? Have you seen it have problems? Would you recommend purchasing the extended warranty after the 50,000/4 year expires?
jd,
I have never experienced any problems with the current AWD systems for the X5 or the 330xi produced after 1999. Keep in mind however that in San Diego, those cars are limited as there is not much need to have the AWD.
That said, I haven’t heard of any problems with it in general from any of my ’shop friends’ across the nation.
I’d put that warranty money in a decent mutual fund . . .
Good Luck and enjoy the car.
Chris
Great write up on extended warranties.
I am considering buying an 05 BMW 645 or an 06 650 convertible with low miles (under 25K). What would you recommend on the extended warranty front? I understand that BMW offers an “Extended Warranty” as well a “Maintence Warranty”. The Maintence Warranty is about $2300 are covers all maintence items for the sooner of 2 years or up to 100K miles. It is my understanding the Extended Warranty is about $3,600, on top of the Maintence Warranty.
Your thoughts?
Also, is there a particular Extended Warranty that you think is a strong one?
Thanks in advance,
Bob
Bob,
For your situation there are a few things to consider:
1. How long will you keep the 645/650? If you typically keep a car for only a few years, don’t get any additional warranty as these cars have minimal issues over the first 6 years/60k miles. If you are serious about keeping this car, I would get the extended warranty. Make sure that it is transferrable in case you change your mind and decide to sell the car at some point.
2. The maintenance warranty issued by BMW makes great financial sense . . . but only for them, which is why they push it. I seriously doubt that you’ll accumulate $2300 in ’service’ over the two years. This warranty typically does not cover a whole lot, and can only be redeemed at a BMW dealership.
3. Most of the extended warranty companies are great to deal with as long as your service center has experience in working with them. I’d almost bet that they all use a similar ‘back office’ that handles claims as the process is extremely similar from company to company.
Like I said, if you obtain an extended warranty, get the maximum coverage or nothing at all. The key to all of this is to make your warranty money back and then some.
Good Luck.
Chris
Good article – good advice. It’s very refreshing to see someone say “don’t buy a warranty for this type of car.”
The advice I always give about extended warranties is to only buy one if you can’t afford to fix a major repair.
This is going to offend some people reading this blog, but I’ve got to say it: If you’re buying a BMW, you sure ought to be able to afford a major repair.
However, if you’re looking for a little piece of mind, then it’s a good idea on any car.
Still, I think that extended warranties for BMW should come with a note that says “If you need this, you’re buying the wrong type of car.”
What if you have bought a new 2005 330xi and got the 50,000 warranty…its about up to 50,000, so you want to extend it to the 100,000. Can I just buy an extended warranty, or do I have to sell it back to the dealer so they can certify it as pre-owned and sell it back to me with the extended? Whats the best play here?
The dealer is now offering an extended service warranty. I’d advise against this as it does not include much for what you would pay. Of the two options an extended warranty with maximum coverage would be best. However, I don’t feel as though an extended warranty is money well spent on that car as there aren’t many expensive repairs to be had in the first 100k miles.
You would simply be paying for peace of mind; I’m not sure if that is worth the cost of an extended warranty . . .
I recently bought a used 2005 BMW 330ci — 25k miles but only a few months left on the 4 year warranty.
I had the car in this weeks for a repair under the warranty and now I am wondering — should I purchase the extended warranty from the dealer?
I will probably drive less than 7k miles per year, so it will take 7 years before I reach 100k miles.
Advice please! Is the cost of the extended warranty negotiable with the dealer? If so, what is a fair price?
Bernie,
I would stay away for an sort of extended service/warranty plan in your case, unless you are able to get an unlimited time frame up to 100k miles. Even then, on a 3-series you just don’t get the money back. Since you aren’t driving many miles per year, the repairs and service that you will require will be based mostly on age of the car.
If you have any questions let me know, but I would buy a nice TV before the extended warranty on your 3 series. The general rule for extended warranties is if you have 8 cylinders or more, get a warranty. Otherwise, you’ll never see that money again.
Chris.
chris,
i just to clarify this. today im am buying my 05 X5 with 49982 miles, should i buy the maintence plan & is this plan only limited to oil changes, rotors, tunes up, & the minors?
thanks in advance for your suggestions!!!
Don’t get the maintenance plan, not unless it’s $500 or less, tehn it would be worth it. Good luck and enjoy the car!
Chris
Hi I am considering purchasing a 05 325 convertible 42K – so I dont’ normally drive more than 10K a year however things could change – what are you seeing as the major problems with this model or a convertible in general? I am single – and was considering a honda accord coupe for reliability but I just turned in my lease 04 clk 500 convertible and hate to give up that “top down” feeling.
Thanks
Jan
Jan,
For a 2005 BMW 325 convertible I wouldn’t even consider an extended warranty. The car will need to have a major cooling system service performed at 7years/70k miles that will cost around $1300. See my post regarding this here. Unfortunately most extended warranties will only cover about $500 of this service.
The Accord would definitly be more reliable, and much cheaper to maintain. But it’s an Accord. . .
Hope this helps.
Chris Keefer
La Jolla Independent BMW Service in San Diego
What would you recommend on a ‘06 530XIT with very very low mileage that has a few months left on the manufacturers warranty, and no where near the 50k limit.
The car is not a BMW CPO’d car. Is it smart to get one of the extended warranties?
Carmen,
If you can get into a warranty that is full coverage for under $1500 it would be worth considering. But only if it is the top line full coverage warranty that is offered. If it were just a 530i I would say no, but you might encounter problems with the tailgate and there is always a bit of concern on the all-wheel drive components. But I still think that a warranty for this car might not be the best financial decision. If you do get a warranty, make sure it has unlimited time for the mileage allowance as you are not putting a lot of miles on the car.
Chris Keefer
La Jolla Independent BMW Service in San Diego
I pretty much disagree with this article. I’ve owned 3 very expensive BMWs… all 1-3 years old when purchased.
1997 M3 Lux Edition – 3 yrs old at 54k miles. CPO warranty and extended maintenance plan. Warranty was used as was maint. Warranty covered a broken power steering hose and flat tire within one week of purchase. Never needed it again. Kept car to 105k miles at which water pump needed replacement and interior dash lights were starting to go. However, later I understand that this model suffered from rear shock mount problems… warranty would have covered that.
2003 M3 – Factory CPO 10 year (engine only) warranty. Didnt ever require warranty work. Again, this car suffered from rear shock mount problems (frame) and SMG issues which are covered under warranty. Otherwise, bend over.
2005 X5 3.0 sport – Paid extra for Plan B warranty. Company went bust last year. BMW will not honor it. Come to find out, I could have paid 1k more for a BMW warranty and coverage at all BMW dealerships.
Now, if given the choice between Extended Service and BMW CPO warranty, id pick the service plan… but it would depend on how many miles were on the car and what kind of car it is.
Saying that the 6cyl cars are more reliable is ridiculous. In fact, they are strained more than most the 8cyl BMW engines. Lets not even start with the twin turbo motors which run much hotter than 8cyls. The engines are not the problem anyway… it is the add on parts. X drive, VANOS, window regulators, sunroom mechanisms, XENONs that cost the big bucks to repair.
Dont buy a BMW and expect it to be a Toyota. Put proper gas in it and keep it maintained and you will be very very happy.
I think the author has no idea about BMWs in my opinion…. and every BMW service center is different. I only have to call in the day before service… dont have to wait 3 weeks. Check your facts man.
Steve,
Allow me to address some of your points/concerns about my article on the extended warranties:
On the 1997 M3, you said that you used the CPO and Extended maintenance plan for a flat tire and a power steering hose and then never used it again. On that car I would guess that those repairs would have amounted to under $500 depending on the type of tire, as well as which hose had failed. On average, in San Diego, a CPO car is at least $2000 more than an equitable car with the same mileage. In this case, assuming that the CPO and extended warranties aren’t free in your area, those warranties did not pay off for you while you owned the car.
2003 M3 – As you said, you never were able to cash in on the warranty. It was money you paid for but never got back. Now on all M cars I feel as though a warranty is a decent idea even if you don’t make the money back. In the world of M cars, M means money and when major components fail it is big bucks. Currently on my e39 M5, I’ll be needing a Vanos unit on my left bank and the list price for the part alone is over $2500. Unfortunately I was unable to get an extended warranty at the time of purchase, otherwise it would have paid off big time.
2003 X5 – As I state in my article, I do recommend a warranty for this car. Unfortunately you had some bad luck with that particular warranty company. Getting the CPO warranty is a good idea for any of the X cars for certain. They have issues particular to the all-wheel drive that are chronic and costly to repair. I recommend a warranty for X cars regardless of which engine is under the hood.
“Paid extra for Plan B warranty. Company went bust last year. BMW will not honor it. Come to find out, I could have paid 1k more for a BMW warranty and coverage at all BMW dealerships.
Now, if given the choice between Extended Service and BMW CPO warranty, id pick the service plan… but it would depend on how many miles were on the car and what kind of car it is.”
This shows again just how confusing these warranties can be. From your comments it seems that you wish you had gotten the BMW CPO Warranty due to your experience with the Plan B warranty on the X5, but then you state that given the chance you would go with the Extended Warranty and not the BMW CPO warranty. If by ‘Extended Service’ you mean the BMW Extended Service plan, that is a different topic altogether. Each warranty and car has its own set of issues that will make an extended warranty a better idea than CPO coverage or vise-versa. It is very important to read the fine print and coverage will vary depending on where you live and where the warranty is issued.
“Saying that the 6cyl cars are more reliable is ridiculous. In fact, they are strained more than most the 8cyl BMW engines. Lets not even start with the twin turbo motors which run much hotter than 8cyls. The engines are not the problem anyway… it is the add on parts. X drive, VANOS, window regulators, sunroom mechanisms, XENONs that cost the big bucks to repair.”
6cyl cars are, in fact, much more reliable and much cheaper to fix than their 8 cylinder counterparts. This is a fact. Any BMW Technician with over 5 years of experience will attest to this. The 8 cylinder cars have various problems with power steering, coolant leaks, oil leaks, etc. all of which are extremely expensive to remedy. You are correct that the core of engines are usually not the problem, aside from the early V8 engines that had the nikasil issues. I recommend that individuals obtain the highest level of coverage available as the entry-level warranties only cover basic engine and drivetrain issues.
“I think the author has no idea about BMWs in my opinion…. and every BMW service center is different. I only have to call in the day before service… dont have to wait 3 weeks. Check your facts man.”
Keep in mind that the frustrations with the BMW dealers are particular to San Diego in many cases. These appointment issues have been conveyed to me by dozens of customers, which is why I said “in San Diego”. Some of my experiences will be particular to the San Diego area as my “about’ section describes. This blog is intended to help those in the BMW Community learn from the experiences I’ve had throughout my career. If you are looking for a BMW professional that has all the answers, you’ll have more luck finding a pot of gold at the end of a rainbow. I see thousands of BMWs a year, 6 days a week, about 11 hours a day, coming up on 10 years. I think I’ve got a pretty decent pulse on BMWs, but that is not to say that I won’t get a head-scratcher here and there.
Take Care and I hope you continue to enjoy BMWs as much as I.
Chris Keefer
La Jolla Independent BMW Service
sandiegobmw:
i’m considering 2007 X5 3.0si with around 20k miles on it with the following pkgs: Sports, Premium, Technology, Cold Weather, Rear Climate Control. I’ve looked at couple of them (CPO and non-CPO) and here are my questions i was hoping you could answer:
1) I noticed significant price differences (non-CPO being 2k to 4k less). Keeping in mind they all have the same options. Is it worth it to get the CPO which has 2 yrs extended warranty or just get the Non-CPO with extended warranty from third party (not sure how much extended warranty would cost, but probably a lot less than CPO’d)?
2) Would you happen to know the difference in drive between Sport pkg vs non-sport and be able to elaborate a little? I basically prefer a smoother ride and not sure if “sport pkg” is for me.
3) Since 07’s are the first generation of the new shape, are there any problems with those vehicles that you may know off (i.e. electric etc)?
4) What’s kind of maintenance cost am i looking at, specially if i plan to keep this vehicle for 5yrs or so (i.e. $1000 a year)?
Any help, direction would be appreciated!
My car was purchased CPO (it was a 3 year old E46 wagon when I bought it).
I probably DID make use of the extra $2k — heck I probably came close just in window regulators
Of course, the transmission failure that I was indeed worried about (reverse in my ZF auto) happened a few months after the CPO warranty ran out….
Hi, I have a 325xi BMW that has 67,000 miles on it. I am the second owner and since I’ve had it, I’ve had to replace the front bushings and a temperature gauge. I am looking at purchasing an aftermarket warranty for 3k that will give me 4yrs, 48000 miles. I am wondering now, however if this is a good ides. Can you advise?
Celeste,
I wuldn’t get that warranty. It is very overpriced for that car. As I’ve said before, your car is actually pretty reliable. Aside from the cooling system replacement, and little things here and there, you won’t have much trouble with this car unless it is a lemon of some sort. I don’t feel as though you’ll be able to claim $3k in repairs that are covered over this time period. Good Luck witht he car!
Chris
Hi,
I am planning to purchase a 2006 M5 with 45000 miles from non-BMW dealers. The car is in very good condition and has clean title. It is still under warranty, can I buy an Extended BMW Service/Warranty or have the car CPO’d?
Are there any issues I should check with this M5?
Thanks
You will not be able to have this car CPO’d. Typically a CPO car can only be purchased from a BMW dealer. I would definitely purchase an extended warranty and get the most coverage you can for this M5. There are a few things that should be checked but you’ll want to take it to a qualified BMW repair facility to check it out before purchase.
Good Luck!
Hi Sandiegobmw,
I am interested in purchasing a 2005 525 BMW WITH ABOUT 58,000 miles. It is a CPO and I was wondering if I should purchase an extended warranty from BMW or look for a 3rd party warranty company. Their quote is about 3200 which is for the platinum package and it extends 48000miles/4 years. What do you think?
Thanks,
uscjrl
uscjrl,
I wouldn’t purchase the warranty, mainly because I really do not feel as though you’ll make that money back in repairs. Do have the car checked out beforehand to make certain there are no current repairs needed before purchase.
Good Luck!
I have a 2006 BMW 525i, 33k miles. The car warranty will be expired on Sept.30. The car is in good condition and I drive the car for pleasure only. Do you think I need to purchase extended warranty for this car. It costs me $2800+tax for another three years or 75000 miles. Thanks.
On the M5, what type of issues should I check. Also, if I purchase from a BMW dealer instead, can I have it CPO’d?
Thanks
What types of issues should I be watching out for on my new to me 04 545i w/sportpackage? I purchased it with 52k, it now has 62k. I generally put between 9-10k on my car per year with a mix of city and highway driving. Would you recommend an extended warranty in my case?
Thanks!
Hi SD BMW,
I just purchased a 2006 750Li, 21k miles, car is CPO’d. A couple of questions for you:
1) The dealer never mentioned any extended warranties, so I’m assuming that you have to find them somewhere else. It sounds like it would be a good idea since the 750 is 8 cylinders. Do you agree, or is this model generally pretty reliable? If not, can you direct me where to look for the extended warranties?
2) What should I have in my hands to show that the car is CPO’d? The dealer said they’d get me a service history to show that. Is that enough, or should I be asking for something else?
Thanks!
I recently purchased a certified pre-owned 2006 X3 with 48K miles from a local BMW dealership. Is it worth purchasing the extended warranty program (2 years or 50,000 miles) for $1900 thru BMW?
Thanks,
Will,
It is important to look at the details of the warranty itself. Also, how long have they covered you under hte CPO warranty? If your CPO warranty covers you until 100k, I don’t see the need to get an extended warranty on top of that. If the $1900 warranty is the ‘extended service agreement’ DO NOT purchase it. Unfortunately the extended service agreement will only get you a few oil changes and a set of brakes.
Check what is covered under the CPO vs. the Extended Warranty and see if the gaps that are filled by the extended warranty make it a smart purchase.
Good Luck!
Chris
Chris:
Thanks for the quick reply. The CPO Limited Warranty covers a wide range of vehicle components, including the engine, powertrain,
electrical system, climate control and more. So basically the major engine components? The BMW Maintenance Program Upgrade ($1900) would cover the 60K service, brakes, oil over the 50K miles. Since I have not had a BMW before, are the mechanical service prices in line with the $1900 cost? You mentioned the extended warranty is recommended on the X3.
Thanks again.
Kathy,
I wouldn’t get the warranty for your car. I just do not feel as though you are going to recoup $2800 worth of claims over the next 3 years. Currently you are driving about 11,000 miles per year which will set-up an expiration date of 3 years from now at about 66k miles. If you want the piece of mind that the warranty delivers, that is understood, but in your case it really isn’t worth it.
Chris