Toys4RJill

Yes, no incentive to make it longer. One of the selling features of a lease would be that you don’t have to worry about of warranty, longer warranty makes finance perhaps more attractive. I think certified warranties for the second owner are longer than the remainder of the warranty. But not sure.

arentz07

I have a coworker who got a C450 AMG a couple years back. He lives with his parents. Not necessarily the basement, but yeah. Same thing.

He makes decent money and had been driving a beater Toyota Camry for years saving up for it.

tex2670

CPO warranties vary. I have one on my BMW. At the time I bought it (former dealer loaner with 5,400 miles), it was "CPO Elite" (for vehicles with less than 15,000 miles), which was an additional 25,000 miles and one year; at the time, BMW's standard CPO was an additional 50,000 miles and 2 years. BMW's current program is an additional year, and unlimited vehicle miles for any CPO vehicle.

But BMW's CPO warranty is less comprehensive than the original factory warranty. I think this is pretty much industry standard--but would likely cover major mechanical breakdowns. I've had a few warranty repairs for my BMW, but all occurred during the factory warranty period.

Johnhav430

imho CPO is a myth. You will always hear the Doug DeMuros of the world screaming, "hahahahahah I got $17k worth of repairs! Slam dunk, baybee!" And for every one of them, there are 90 people lurking who said, "Oh ****, I got bupkis. The dang car didn't break."

That was my experience with my N54 335i. It was supposed to be a no-brainer to pay the $2700 for the extended warranty, and I even got the 7/100, not the 6/100, nor the 6/70. Ooooh...turbos alone, $6,100, how can you not get an extended warranty.

The only thing that broke? The ABS/DSC hydro out of extended warranty, $4,200 at the dealer. But I diy'd so it's moot. Spent about $450-$480. If I had all the tools, it could have been $249.

Why is it, that people think extended warranties and CPO are not profit centers for dealers and mfgs?

p.s. my buddy Dave, smart guy, CFA, now why in the world has he in his lifetime, never purchased a new car? And why, has he never purchased a CPO car? To include BMW, and Porsche? I would say because in his brain, he completely assesses risk v. reward. An extension of his job. Also, his tolerance for risk is higher, generally speaking. Without being cowboy.

edit pps Dave is a real guy and I'm gonna take a shot at him and his underperforming funds. My other buddy and I saw an aerial drone shot of his house, and I said dang son someone from our HS really made it (you know me I'm always impressed when your full bath count is 2 figs--my buddy said F that the house looks like a hotel lol it does like some resort where as soon as you pull in, guys with gloves unload your vehicle--if he ever sells it I bet a Celtic buys it)

p.p.s my mom would say there you go again, showing the world you're a dummy and admitting you lost $2,700 on an extended warranty. Now why would you want the whole world to know how dumb you are? Well, mom, because if just one person decides not to get an extended warranty as a result, and spends that money on their family instead? I'm happy.

Kense

Because most people can't "afford" the car they are driving. A $40,000 car will cost you $700 a month on a 60-month loan. If you're driving a $40,000 you should be making $110-$115K. In reality after taxes that's really not that much income. Especially here in the Bay Area or California in General. Most people are not earning that much yet they want a nice car. Therefore 72-month loans exist. IT's not that complicated, cars have become very expensive. 40 grand gets you entry level BMW's and Mercedes with hardly any options. A loaded Accord will cost you 40 grand.

Johnhav430

OK, I know this is in fact a Japanese car forum. However, there are folks here, who do own German cars.

We dance around all day long, only to conclude that Toyota is the best car ever made hands down!

Japanese, and German, are completely different. Nary the two shall meet. While oh say BMW is constantly criticized for not making bulletproof reliability cars, it is simply amazing how many of their components cost less than Japanese cars. They have no incentive to make their cars last longer. Um, ok. Yet tell me, then, why do they go to the expense of riveting aluminum hats to iron rotors, to save 16 lbs. of unsprung weight? Why do they bother to attempt to achieve as close to a 50/50 weight distribution as they can? These are two things that Japanese don't bother with.

My cousin tried to emphasize that the vehicles are totally different. Before he got his E36 M3, he drove a Honda which reached 400k. He said he has no expectation that the M3 would go 400k (it absolutely could but the overall cost would be higher). And as I have mentioned, he unloaded it at 240k for about $4k.

tex2670

No one said that German automakers have no incentive to make their cars last longer. That's ridiculous.

They have no incentive to offer longer warranties. Lexus has a longer warranty than Toyota--does Lexus make their cars to "last longer"? No, of course not. A longer warranty is a marketing tool--not a claim that a car will "last longer". And if sales are brisk, an automaker has no incentive to absorb the extra cost of a longer warranty. Supply and Demand 101.

geko29

This is correct. When the vast majority of your vehicles are leased, the warranty has to be at least as long as the longest lease terms. 39 months is about the upper limit, ergo the 4 year/50k mile warranty.

Johnhav430

I'm assuming that a premium warranty is 4/50. Why would anybody want to make it 10/100? Like you said, a marketing tool. Ever try to use a Hyundai warranty? I have not, but coworkers and my brother when he was starting out, have. Didn't go so well, nor did VW, for that matter with my sister in law's Passat.

The constant bashing of German cars is amusing, though. Who in their right mind, would ever consider extending the warranty on a German car, or buy a CPO for that matter? I did, and did. And for that, I was dumb with a capital D. Think about the Dougy way. Do you brag to people how much your medical care cost, because you have health care? Rather, a normal person wouldn't share that info, because it's negative. Well you know I'm so overweight that I needed a triple bypass and medication totaling $160k! But with my health care being $325/mo., I made out! Illogical.

Johnhav430

Yes, and no. I've been driving a 2006 LS430 out of warranty for 2 1/2 yrs. (as long as I've owned it). I've been driving a BMW 335i out of extended warranty for going on 6 years. Nissan Maxima been out of warranty for 16 years. My wife's 2011 GM, the most problematic vehicle we've ever owned, had an extended warranty through last September. Knock on wood nothing since. As long as people stay convinced a car cannot be driven out of warranty, car mfgs can prey upon incorrect assessments of risk. Hey, that's why we have actuaries and they're paid handsomely.

Maybe I'm misinterpreting "basement living" luxury car owner. Where I come from, we've always had a basement. But a lot of friends up in Bucks have ranchers.

mmarshall

I can partially agree from the sales of other brands in that (upscale) class, but some companies even inlayer classes that markedly outsell those German brands, like Toyota, Honda, and Hyundai/Kia, offer longer drivetrain warranties. The drivetrain warranty is usually considered more important than the bumper-to-bumper warranty, because many drivetrain parts are large, expensive, and difficult to repair or replace.

Maintenance, as the term is conventionally understood (oil changes, tire rotations, wheel alignments, brake pads, wiper blades, periodic inspections, etc..) is not really the same as warranty-work. Warranties usually cover things that are not expected to break down early in a vehicle's life or reconsidered routine-maintemaance items.

rmason

Do they exist? Absolutely.

There's a reason why the most typical question asked by salesmen are how much one can pay a month.
The dealers will add on a gap and extended warranty for a "piece of mind" and whoalla: everyone is happy.

It's quite difficult to get used to the yolo concept.... but it's here and in full force.

Johnhav430

Another trick I've seen is selling "extended" items with the pretense that prices are going up. Ask yourself, do you fall for that at work? Then why would you, at home? What did Smash Mouth say?

"So don't delay, act now, supplies are running out"

This is what I mean. With a BMW extended warranty, at least in 2010, it went--6/70, 6/100, 7/70, 7/100, from in-service date. That's honest, straightforward, 4 choices, that's it. What's tricky about it? You can get it as long as your original warranty is intact. Some unscrupulous dealers (aka finance managers) ask you to roll it into your payment. DUMB.

Now, GM, which I also bought, is what I call trickmaster flex. There is no 6/70, 6/100, blah blah blah from in-service. Instead, we'll come up with a huge grid, that determines how many months, and how many miles, from today! Maybe your warranty expiers May 1, in which case you are bang on. Maybe it expires Sept 30., in which case, why in the world do you want to pay for coverage whose expiration is based on today's mileage and date? In other words, why would I extend my warranty for 48 mos from today, and not Sept. 30? Are people this stupid? haha rhetorical

Time value of money was taught when I was in HS. I don't think it's taught anymore. Because nobody needs to get that into it, as mentioned above, just tell me the monthly payment!

tex2670

You are comparing unlike things. BMW is not competing with Honda, and arguably not even competing with Acura. No one is coming into the BMW dealer and saying "The Accord has a longer powertrain warranty; what can you do for me?" It's not about raw numbers of sales--Ford sells lots more F150s than BMW sells cars--so what?

I am well aware of the difference between maintenance and warranty work. It's an example of a marketing tool.

arentz07

Hello, I have a 42-month lease here.

Also, I have seen lease offers/payment estimators on websites for 48- and 60-month leases. But I do think your point is still valid.