2016 650xi - Extended Warranty VSC

[artieg30]

Hey All,

The factory warranty on my 2016 F06 will end this coming April. I received a letter in the mail from my BMW dealer for extended warranty so i inquired on available options.

First off, i'm certainly interested in purchasing extended warranty after reading and doing some research online on the F06's. I understand my F06 has a N63TU which is slightly better than the N63 in reliability, though i'm still concerned at the possibility of a major breakdown/repair that i'd be on the hook for.

I got the quote back from my BMW dealer and they're basically asking for $3175 CAD for 60 months and 80,000km, or 72 months and 100,000kms at $4590 CAD. I can't say i'm surprised as the F06 is a more premium car, definitely not the price points i got for my F30 a few years back.

My question is:

1. Is purchasing the extended warranty worth it in this case?
2. Can you "shop" around for quotes from other dealers or is the price set the same everywhere?
2. From other N63TU owners, have you experienced any major issues with your cars after the warranty period?

Realistically i'm trying to get a sense of what to expect after the factory warranty runs out on my car and whether it'd be a good idea to buy this warranty or just save the money and put it into a "repair" fund. Any input is appreciated. Thanks everyone!

[Opie55]

"Is purchasing the extended warranty worth it in this case?" It depends on what you mean by "worth it." Many people put a price on peace of mind. I don't. If you mean "worth it" because repair costs may exceed the warranty price, there is no way to know except to say that statistically that is not true in most cases. The house always wins. I take the simple approach and take my chances. I never buy warranties on anything ever. My 2015 only has 37k on it, and has been out of warranty since last June. I am the second owner, but I have all the records. Nothing forward of the firewall has ever been touched on the car.

[RVAGuy]

Originally Posted by Opie55

"Is purchasing the extended warranty worth it in this case?" It depends on what you mean by "worth it." Many people put a price on peace of mind. I don't. If you mean "worth it" because repair costs may exceed the warranty price, there is no way to know except to say that statistically that is not true in most cases. The house always wins. I take the simple approach and take my chances. I never buy warranties on anything ever. My 2015 only has 37k on it, and has been out of warranty since last June. I am the second owner, but I have all the records. Nothing forward of the firewall has ever been touched on the car.

My research also suggests as we drive few miles the extended warranty package is not “worth it”. I make sure all scheduled service it performed by BMW and have contact information of a reputable independent service facility should a major repair be necessary.

[Walt White Coupe]

I will echo the advice of the others that the "House" always wins but add "over the long term". I've never bought an extended warranty on anything and so far I have never regretted that decision. You can figure that over the time of an extended warranty that most people never recoup the cost of that warranty in repairs. Also consider that the cost of the warranty covers not only possible car repairs but also profit for the insurer and profit for the seller.

One reason that these cars are so affordable as they age is that people have an unrealistic fear of astronomical repair costs if they break so they shy away from buying them. That fear allowed me in 2016 to buy my 2013 650ix that windowed for just over $100k with 15,000 miles and a CPO for $54,000. I've always thought that the current 650 style was the prettiest BMW made and thought I would never have one because they were just too expensive. $100K was not doable for my second car, $54K was. So far I've put 15,000 more miles on mine and it has been trouble free and I absolutely love this car just as much as I love my C7 Corvette.

[jdsaengine]

As Walt said above, these 650's are a great deal used. Got my 2013 650x vert in 2016 with 23K miles, was stickered at $105K and got it for $52K. My CPO expired 8/2018 and I went ahead with an extended plan, 30K mi/3yr for $4K. A little high $$ I think and I'm not one for warranties much, but with V8 history I decided to take the deal thru my BMW dealer.

By the time the extended expires in 2021, the car will have approx. 44K mi. on it at my current driving rate, so I'll just float along for a while and decide whether to dump it or hold on for a few years more.

[bimmer12]

As others above have said, the house absolutely wins, and this is a zero-sum game. For one party to gain $x of benefit, the counter-party necessarily has to lose the same dollar value. Based on this, and given the probability and expected cost of repairs, the price is set by BMW (or any other party selling warranties) at a point where they win and you lose.

As a drastically simplified example. If the probability of a blown engine within 60 months/80,000 km is 5%, and expected cost of repairs is $30,000, without warranty, your expected repair costs during this time is $30,000 x 5% = $1,500. BMW would price the warranty at some point higher than the expected $1,500 for them to profit.

But the point to consider, is that we don't live on an Excel spreadsheet. Fully knowing that you are expected to lose, you might be more willing to dish out $3K for the warranty which could end up providing you with no financial value, than accept the 5% chance of paying $30,000 out of pocket, again knowing that this is the mathematically incorrect decision. As long as the decision is made with full understanding and acceptance of this business model, buying the warranty can still be the right decision for some people based on their personal risk tolerance.

There are also intangible benefits to warranty, which some people will value much more than others. e.g. peace of mind (me, sort of), lack of discipline to "self-insure" (me, 100%).

Having said all of the above, aside from the general pros vs. cons of warranty, the price actually seems pretty decent considering the # of years, mileage covered, and the hidden CAD penalty we pay on just about everything. Assuming this is a comprehensive warranty on par with CPO warranty for instance. Personally, I would probably buy the warranty at this price, but again, only you can make this decision for yourself.

As for your question #2, the extended warranty price is set by BMW. Dealerships have a document issued by BMW detailing the price depending on the engine "tier." I would imagine the business office at dealerships have some leeway in discretionary pricing (i.e. discount) but it's not going to be significant, and presumably your best offer will be at your home dealership. But again, the price you were quoted seems pretty good to me for what it is.

As for your other question #2, it's very difficult to gauge this based on anecdotal evidence. You could hear back from 10 owners with problems, but you're likely not going to hear from the 1,000 who do not.

I hope any part of this is even remotely helpful, as none of it may be lol.

[dsocold]

honestly i cant see how the house can win with a bmw

Atleast thats not the case for me on both my bmw's by a great distance with 2 types of warranties.. Wheel warranty/ cpo warranty.
My 135i had over 30k put in it from warranties
My 6 had atleast 7k and it is still under cpo(my cna kicks in in unison with my bmw cpo coverage)

i paid 5k for cna warranty for my 640 for 6 yrs or 160k miles whichever comes first and they have been amazing. They cover everything cpo doesnt also bushings and like literally everything but tires and body panels...

[BMPOWERED]

I posted about this same subject months ago and got similar answers. Many of your questions have been answered. I will add though that you may want to shop around regarding the price. There are many 3rd party warranties available, but of course you wan to be careful to choose a reputable one. I asked my BMW service adviser, and was told that Safeguard was a reputable one. You also may want to consider Mechanical Breakdown Insurance which is offered through many insurance companies such as Mercury, Geico, and AAA here in the US at least.