My husband is considering getting an extended warranty on his '01 BMW X5. We got a letter in the mail from “Service Protection Program.” The rep said it would be $100 to sign up and $80/month and includes transmission.
They won’t send anything in writing. I’m skeptical.
Anyone have any experience with these type companies?
I’m in the auto repair field. Some extended warranties are rather good, but many leave much to be desired. It’s not uncommon for the customer to believe that certain things are covered when they actually are not. It’s not wise to trust what a salesman says, what is in writing will prevail. Nor is it unusual for the warranty company to only pay up to a certain amount for various parts and services, sometimes not reaching the shop’s normal price (not unlike some medical coverage). Some shops will bend over and take this but resent it, others will insist on full payment with the customer making up the difference.
All the consumer advice items I’ve read point out that these warranties are a bad deal for the customer on a statistical basis. Sure, they’re nice if you happen to have a major problem that’s covered, but it’s like playing the lottery - most people get little or nothing for their investment and the administrating body makes a killing. I think you’re wise to be skeptical.
I’ve never purchased one, but a lot of customers in Minnesota were left holding the bag not that long ago when one of those companies went bankrupt. The company had been banned from doing business here because they were financially shaky, but they kept selling anyway. Minnesota asked the dealers who had acted as third parties to sell the warranties to make good on the claims of the customers, but I’m not sure how it all ended up.
Anyway, here is an article about it. Not sure if you’ll be able to link to it without a (free) login, though, so here is another article about the same company with comments at the end from unhappy consumers.
Here’s a NYT article about a different company going belly up and leaving folks high and dry. The focus of that particular article is more on the business of extended warrantees than that particular case, however, and may be useful to read. It offers some advice for trying to choose a reputable company if you do go with one.
My own personal inclination is to take the money you would spend on the warantee and put it into an interest-bearing account and use that to pay for any repairs.
They all leave something to be desired. I issue them for my employer. They are obviously in the business to make money (duh). OTOH, I have seen many major claims covered by the policy.
A BMW will cost more than a Chevy Aveo, due to the inherent repair costs. 4WD/AWD costs more (duh). turbo/supercharged costs more.
Basically, you are betting that what you are buying will pay you in the long run. They are betting against you.
A 2001 BMW X5 3.0i AWD with 50k would be 1102.50 through our company for an additional 3y 30k. Other companies possibly charge less, but most will charge more. Remember, markup and coverage is the key. This one would include the following, and note - I can’t sell it to you, nor would I want the karma associated with doing so. This is purely for informational purposes only. It does not cover (nor do most policies) diagnostic work. However, there is also no deductible.
Drivetrain Coverage
ENGINE
Crankshaft & bearings; oil pump; pistons, rings, connecting rods & bearings; timing
gears, chain/belt; camshaft, bearings, push rods, rocker arms/shaft, hydraulic lifters;
intake and exhaust valves and springs. Engine blocks covered if mechanical failure
was caused by above-listed parts.
STANDARD
TRANSMISSION
Internal transmission parts consisting of gears, input and output shafts, bearings,
overdrive housing and transmission case if malfunction was caused by the listed
parts.
AUTOMATIC
TRANSMISSION
Internal transmission parts consisting of gears, input and output shafts, bearings,
front pump, planetary assembly, sprags, governor assembly, valve body torque
convertor, transmission case.
.
DRIVE AXLE ASSEMBLY
2-Wheel Drive:
Drive shaft; ring/pinion gears, pinion bearings; side carrier bearings; carrier assembly;
thrust washers, axle, axle bearings; universal joints, CV joints,* drive axle housing.
4-Wheel / All-Wheel Drive:
drive shaft; differential, & CV joints, transfer case parts listed on contract.*
*Except if boot was damaged or missing.
COOLING
Water Pump, - Limited to 50% parts & labor.
ELECTRICAL
Alternator, Starter and Voltage Regulator - Limited to 50% parts & labor
.
24 HR EMERGENCY ROAD SERVICE
Towing, flat-tire assistance, lock-out service, “jump-starting,” fuel and fluid delivery,
concierge service.
RENTAL CAR ALLOWANCE
Provided to get you back on the road quickly.
We looked the company up on the BBB. We declined based on that info. They’re not a member of BBB and they’ve been sued by Michigan’s AG for misleading advertising, etc.
Thanks for the info. Now I have to get the pesky salesman to quit calling.
Wow, no offense, but that has to be the worst listed coverage I think I have ever seen. The chance of a hard part failure on a modern engine that has had oil changes*, is somewhere between slim and extremely slim. Far more like is a sensor/actuator/control unit failure in the fuel injection / ignition system. YOu will note that this stuff isn’t listed.
*And I bet that in the fine print, they will require oil change records or no coverage, also I bet that the timing belt would not be covered if the customer missed the factory recommended change interval.
I don’t see clutches, brakes, valve body, or the cooler listed. Again these are the most common points of failure.
.
50% on the water pump? No coverage for the radiator? No computers covered. Needless to say a 01 BMW is full of them.
.
Could be helpful, but may duplicate other coverages. (AAA, auto insurance etc)
Conspicuously absent, to my eye, are gaskets, seals, and transmission fluid. May or may not be the case with this particular company, but I have heard of extended warranties that do NOT pay for the gaskets and fluid, even though it’s well known that they need to be replaced as part of the job. Customer who thought “everything is covered” (listening to those salesmen, eh?) gets a nasty surprise when required to pay for part of the job.
:smack:
Yup.
Do realize that the OP is looking to cover a 2001 vehicle - hardly the newest on the road.
So this policy covers the vehicle in relation to its age.
Now, if this was a 2006, it would get what’s known as “factory type coverage” which is basically an extension of the manufacturers warranty with no deductible for an additional 2/3/4 years.