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Re: Used Car Warranties

Jim Newman Asks about used car warranties..     

>From: Jim Newman <
>Date: Fri, 30 Dec 1994 20:02:05 -0800
>Subject: used car "warranty"
>
>Speaking of warranties -- I'm shopping for a fun commuting car,
>probably a 89-91 E30 3 series, and have spent some time with our local
>BMW dealership.  Among the many little things that bug me there is the
>"warranty" they put on their used cars.  It is good for 90 days or
>1000 miles (doesn't take a lot of thought to realize which will come
>first!) and, most annoyingly, it covers only 50% of parts and 50%
>of labor on any needed repairs.  To me, this is a discount rather than
>a warranty -- the dealership is basically writing off its profit and
>perhaps just a little more on repairing whatever is wrong with the car
>they've sold.  They stand to lose much less than the prospective buyer
>if anything goes wrong.  The salesperson insists that this is normal
>and reasonable and persists in calling it a warranty.
>
>Is this typical?  Does anyone know what other dealerships do?  Anybody
>else think it's sleazy?

My general thoughts on these warranties, and a suggestion:

1. This 50/50 warranty is almost worthless. The dealer will charge
you book price on everything - and as you noted, really is only
writing off their profit on the repair. To really see the value
of the warranty, after you've struck a deal, ask how much they'll
discount the deal if you sacrifice the warranty. Betch'a they'll
say they "can't sell a car without it.." basically meaning it's
a no-cost thing for them, and they won't give up $$$ if you want
NOT to have it.

2. Dicker with them for the BMW-Quality Assurance Warranty - the
one underwritten by some independent company, with BMW's blessing.
This warranty, while not cheap give you some piece of mind.

Stuff about this warranty:

a. There is a profit margin built into it - so the price can
be negotiated. I got the dealer who sold me BOHICA to go for
1/2 the "list" price on it.

b. The car is supposed to meet certain standards to be able
to be put under this warranty. This gives you clout later with
the dealer if (as I found) they really hadn't done everything
they were supposed to - to qualify the car for the warranty.

c. The performance of the warranty is greatly effected by the
relationship of the service manager with the warranty claims
adjuster. In my case - the service manager had a good relationship,
and basically ANYTHING I thought should be done was done without
quibling (to the tune of about $5,000 - tranny, driveline, radiator,
etc.. etc..). My cost was $100 per repair (about $500 out of pocket
plus the warranty cost).

d. The dealer may tell you there is only one policy available, with
$XXX deductable. Not true - it can be purchased with $0 to $500
deductable.

e. Check on the policy of the dealership. One local dealer would
not give me a loaner car when in for warranty. The dealer I bought
the car from did. The local dealer wanted to charge for "diagnosis"
seperate from the warranty claim. The selling dealer never charged
for "diagnosis".

Was it worth it? YES!! Would I get one again? YES!!  Although it
added a few $$$ per month to my payments - it saved large repair
bills while I got BOHICA into shape - thank's to BMW.

BTW: They have different length/milage on these things - basically
the one I bought was 24,000/24 months. There was an additional
extension available - but it was the cost of a year, and only
added 6,000/6 months to the policy. I opted for the 24/24.

Best of luck!

=======================================
Don Eilenberger
  Bellcore
  331 Newman Springs Rd. RM 3X224
  Red Bank, NJ 07701
=======================================
EMAIL: [email protected]
PHONE: 908-758-3167
FAX:   908-758-3166
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