[HumbleGhost]

Long time reader, first time poster.

Currently dealing with a nightmarish situation at the dealership I work for. Just felt obligated to try and help anyone who’s thinking about buying an aftermarket/3rd party car warranty. First of all, don’t. Just don’t.

But if you insist on doing so, at least do the following:

1. Select an aftermarket insurance company you think you’re gonna like (you won’t)

2. Call the authorized dealership that you want to work with and simply ask them if they work with the 3rd party insurance company you’ve selected.

3. If they say yes, then have that dealership put it in writing.

4. If they say no, ask them if they have a 3rd party insurance company that they do work with.

5. If yes, then have them put that in writing before you buy the insurance.

That is the closest you will ever get to having a warranty when your car is out of warranty.

I will go a step further and also say this. Again, i almost feel guilty for helping someone buy an aftermarket warranty which is why I keep repeating myself in saying I really advise against it, but if you seriously feel you absolutely have to waste your money on an aftermarket car warranty, please make sure you ask the following questions.

1. What EXACTLY, is NOT covered under the warranty you offer? What reasons would a claim be denied? Is there a list of every single component that is and is not covered? Get it in writing.

2. What EXACTLY do you need from the dealership in order to actually pay out a warranty claim. Do you need them to send you screenshots of wiring diagrams and screenshots of the factory labor times from the book?

3. If they say no, have them put that in writing.

4. If they say yes, we need that. Then call the dealership you want to work with and ask them if they are allowed to send that information to random people in an office somewhere who started a random aftermarket warranty company one day, who have absolutely zero affiliation with the manufacturer.

5. If they say yes, we are allowed to send the factory labor times to them, have them put that in writing.

6. If they say no, we can’t send them that. Call back the warranty company and ask them if they still pay out warranty claims without knowing if they are being billed correctly for a claim.

That is the absolute only way you should be buying an aftermarket car warranty. Which again, you should not be doing. You will be a lot happier just donating $5,000-$7,000 to charity or child’s cancer research or the homeless or like, a million other things. It will bring you significantly more joy in your life than buying an aftermarket car warranty.

But if you absolutely must, that’s how I would do it. Which again, I wouldn’t do.

[chenry]

Thanks for the write up / PSA (sincerely)

[DocL]

I've had aftermarket warranties on many cars, and they have always been beneficial for me. I've never had a problem with a dealership filing for a claim, although it sometimes takes a little longer.

I just got one for my 2018 F80 if only for a little piece of mind. I can afford most repairs, but having a little assistance is always a good thing. It's like dental insurance. It doesn't cover 100% of the procedure, but most will cover up to $2000 a year.

[TAZ007]

Thanks for the PSA

[mzwerner]

Thank you

[SpeedyATL]

What are your thoughts on the BMW extended service plans?

They are more costly, but you would have to believe if any extended warranty was going to be honored by BMW dealers, they would be...right?

[LogicalApex]

You were clearly abused.

Who abused you?

I think it would be more helpful for the community if you named the warranty and the issues you’ve encountered. Will help users searching for them online looking for pain stories to help them decide if they should get it. Will help users here who may be considering them.

All extended warranties aren’t created the same. Some companies will pay out and some will be thieves…

Asking the dealer ahead of time isn’t all that useful as they can tell you they are OK with that warranty today and they might not be in a year or two when you’re trying to use it…

The general reality of if it makes sense to get an extended warranty in general is very complex as it is very situational… For some it is a good idea and for some it isn’t. The right choice will vary quite a lot from individual to individual.

[happyjack]

Originally Posted by SpeedyATL

What are your thoughts on the BMW extended service plans?

They are more costly, but you would have to believe if any extended warranty was going to be honored by BMW dealers, they would be...right?

make sure you're talking apples to apples.

extended service plan is essentially prepaid maintenance, and it's pretty easy to figure out of it's worth the money based on your expected mileage. the scale usually gets tipped in favor of pre-paying maintenance if you know you will need something big like brakes & rotors.

as for the extended warranty: i've owned 5 CPO bimmers over the last 15 years -- essentially i paid the premium for a CPO (vs a non-CPO used vehicle) to get the extended factory warranty. i never actually needed the extended warranty on any of those 5 bimmers; so paying the premium for that extended warranty (times 5) probably cost me $12-$15K...

[HerkHealer]

OP, wowza sounds like you got really screwed over.

My local dealership actually SELLS and PROMOTES a 3rd party warranty at the Dealership through their Finance Department. I've already started talking to them and we are in the first stages of negotiations. It lists exactly what is covered and what is not. And, in case you didnt realize BMW CPO do NOT include the majority of suspension components, while this 3rd Party does.

I appreciate you letting people know that your dealership are Con Artists, but the one I'm working with is very up front and explains exactly what will / will not be covered.
My 4 year Factory is up in Oct 2023 and with the extended warranty i'm getting I will be covered for another 3 years and up to 100k miles. AND it can be transferred to another buyer for $125.

My car, a 2020 M550's motor costs almost $30,000 so it's peace of mind for me.

[jkoral]

Originally Posted by HerkHealer

OP, wowza sounds like you got really screwed over.

Since he stated he worked for the dealership, I assumed he is posting the PSA after seeing one of the dealership's customers get screwed over.

[HerkHealer]

Originally Posted by jkoral

Since he stated he worked for the dealership, I assumed he is posting the PSA after seeing one of the dealership's customers get screwed over.

Correct, but what I'm saying is did his Dealership sell the warranty, or was it from another xyz Company? That's a huge difference.

Im thinking it may have been something a customer bought outside the dealership and didnt realize what his/her coverages were.

If that person DID purchase through the Dealership and now they wont warranty it, thats a Law Suit for sure.

[HumbleGhost]

Originally Posted by SpeedyATL

What are your thoughts on the BMW extended service plans?

They are more costly, but you would have to believe if any extended warranty was going to be honored by BMW dealers, they would be...right?

Oh, that’s totally totally different because if you buy the extended warranty from BMW, the actual manufacturer, I think that’s a smart move because it’s from the actual manufacturer of the vehicle. Those are good. Honored at all legitimate dealerships. Extended is also better than CPO in terms of what it covers, extended warranty is meant to imply an extension of the factory warranty. Which is the best possible source. Hope that helps.

[HumbleGhost]

Originally Posted by HerkHealer

Correct, but what I'm saying is did his Dealership sell the warranty, or was it from another xyz Company? That's a huge difference.

Im thinking it may have been something a customer bought outside the dealership and didnt realize what his/her coverages were.

If that person DID purchase through the Dealership and now they wont warranty it, thats a Law Suit for sure.

Agreed! If it was through our dealership and it wasn’t honored that person would be fired and a refund issued. If it was through the dealership and not honored, go directly to an attorney Bc that’s robbery.

[HumbleGhost]

You know what’s funny. I love this place and I love you guys for being you.

Haha I was never abused. Except that time the Aliens gone and done took me and my boy up in the craft and used them there fancy space tweezers. Aside from that one time, no, no abuse, abuse free.

But yea I will clarify further.

Not sure how many years of experience everyone has dealing with sending and processing and coding manufacturer warranty claims as well as attempting to work with random companies that have no affiliation with the manufacturer (3rd party warranty companies) but I have a decent amount.

There are some variables and there’s a lot of details being overlooked.

The difference between a component being warranty and not warranty, usually comes down to the way the advisor and technician word their story in the RO. (Repair Order)
Which is made of the 3 C’s.

The concern: (what is the clients concern)

The Cause: (what did you find and how did it happen)

The correction: (What did you do to fix it)

That information determines if something is warranty. And if we’re being extra detailed there’s also such things as kickbacks Bc all warranty parts get sent back to the manufacturer for them to inspect the part and if they don’t like what they see they can deny the warranty claim even if it was already paid. But they take a sample size. They can’t examine every part. Most manufacturers can’t.

The difference between warranty depends on how the car is written up, what we say we found the problem to be, and what we did to fix it.

It’s how the advisor and tech word their story. Could be something like writing the following in the correction line: “during vehicle inspection of suspension, confirmed customer concern, found RH suspension component to be damaged, technician noted RH xyz component # 12345 had stress fracture or found cracked or failed internally due to premature wear of xyz (or a hundred other reasons me and the tech can come up with) checked entire suspension for damage of vehicle hitting road hazard, no damage found, removed blah blah to access panel blah blah to remove and replace RH control arm. Etc.

But If I initially wrote the car up and said:

Customer states vehicle HIT OBJECT in road and states steering feels loose, check entire suspension for damage and advise on any suspension component needs. (That is not warranty. The manufacturer does not pay for suspension damage Bc you hit some object in the road Bc you were texting or whatever)

Or

Customer states clunking noise coming from right hand side suspension while driving and steering feels loose while turning, check entire suspension and advise on any suspension needs.

Now that can go either way. Because you haven’t hit anything yet.

That is one of many variables to consider.

[HumbleGhost]

Ok. Let’s say the right side headlamp in your car suddenly fails and you bring it to the dealer. If we examine the part and determine the headlamp failed internally with no external damage, it’s covered under warranty. The way dealerships get paid for warranty claims is by charging the manufacturers “x” amount of labor hours to complete job “Y”. (This number is determined by the manufacturer. They tell the dealership how much money we are allowed to charge them for warranty repair jobs.)

So in order to get paid by the manufacturer you need a warranty labor/component operation code. Not just anyone can look that up, manufacturer’s want that information private. But once you look up the warranty coding for a particular job, that tells you how many hours to pay the technician and how many hours to bill the manufacturer.

Let’s pretend the labor code for replacing your headlight is:

Replacement of right hand side headlight is code: 843.52.4a / 1.25

Which is “code” for the dealership to let the the manufacturer know that this claim is in reference to section 843 of the car in the factory manual, part 52, sub section 4a. And the job pays 1.25 hours.

That’s how many hours I can pay the technician and charge the manufacturer to replace the Rh side headlight.

And to replace the Lh side headlight at the same time would probably pay .30 hours.

Why? It’s the same job. Why would it be less hours to replace the left side than the right side.

Because you already have the bumper off the car needed to access the headlights which they paid you for in the previous 1.25 hours, so they’re not gonna pay you to take the bumper off twice.

Ok great who cares. Well. How do you think 3rd party companies pay out claims. They want to see those labor times and they wanna pay those labor times for those jobs.

They say, this is how many hours the job pays, here’s what we will pay. It’s fair.
So then they tell the customer, hello sir, we are ready to pay, we are soo ready, we’re dying to pay, we love to pay out claims, all that dealership has to do is send us the labor times and we’ll pay, the dealership is being difficult.

Except it doesn’t work that way because I can’t even send them that info and I definitely can’t charge them the same labor times as the actual real manufacturer. The 1.25 hours for the headlight replacement. That’s the labor time for the manufacturer—Bc they have actual factory’s that make the cars. They tell us what they’re paying. It doesn’t work that way with non manufacturer warranty companies.

To calculate customer pay labor hours it’s usually the warranty time multiplied by 1.5

So 1.25 x 1.5 = 1.8 hours.

But there is no hard book on that number. I can just make up a number and say oh well there’s extra clips in the bumper there, and then the camera in the bumper needs to be recalibrated once it’s removed and blah blah, 3.7 hours.

But “I” can’t charge the 3.7 hours to the 3rd party insurance Bc a) they’re probably not that stupid it would have to be a lesser number like 2.4 but again I’m allowed to make up whatever I want, which is why people get price quotes from different facilities and b) if they see the labor times they will do the math and know they’re being ripped off and they won’t pay.

So they’ll pay 1.25 but 3.7 was billed out. Who’s paying the difference? Customer? Dealership? 3rd party warranty?

There’s so many variables in these situations.

Just remember whatever you pay for your aftermarket non manufacturer warranty, that company’s business model is to pay out a claim that is less than the amount you paid them or else they lost money. If I give you 2k for a warranty and you pay out 5k in claims, you lost money. So think about that.

Personally, I’m honest and treat peoples cars the way I want someone to treat my car, with care. I don’t rip anyone off, the only purpose of all this was informational.

[1WickedE90]

Originally Posted by HumbleGhost

Currently dealing with a nightmarish situation at the dealership I work for. Just felt obligated to try and help anyone who’s thinking about buying an aftermarket/3rd party car warranty. First of all, don’t. Just don’t.

Thanks for posting & great advice. When I picked up my car in Feb, the finance guy tried running this nonsense on me (after I told him that I wanted the BMW factory extended warranty). Here is what was offered:

https://www.zurichna.com/industries/...cle-protection

A simple Google search will reveal a ton of complaints from BBB & other sites about this company. It didn't seem to matter to him, he went ahead & offered me the BMW extended warranty for $2.5k more than one of the forum dealer sponsors. He had the nerve to say that not only was the Zurich warranty cheaper (false) but it covered more than BMW warranty did (false).

[HerkHealer]

Ghost, Thanks for the Extended warranty info. That customer got screwed bigtime.
I'd be super pissed. I hope he/she contacts an attorney.

In my case, I'm going with the 3rd party through my dealership because not only will they work on my car, but there's a BMW indy shop in town with TONS of 5 star ratings who also use this same company, and have for years without any issues of them paying and resolving issues post Factory warranty. The other reason I want 3rd Party vs CPO is because I can get an additional year of coverage.

The final reason I want to go 3rd party is because I'm about to put a tune on my car along with other mods and the Indy shops could care less, where as if you get the wrong tech at BMW, it could go South fast.

[F15_SGM]

Originally Posted by HerkHealer

Ghost, Thanks for the Extended warranty info. That customer got screwed bigtime.
I'd be super pissed. I hope he/she contacts an attorney.

In my case, I'm going with the 3rd party through my dealership because not only will they work on my car, but there's a BMW indy shop in town with TONS of 5 star ratings who also use this same company, and have for years without any issues of them paying and resolving issues post Factory warranty. The other reason I want 3rd Party vs CPO is because I can get an additional year of coverage.

The final reason I want to go 3rd party is because I'm about to put a tune on my car along with other mods and the Indy shops could care less, where as if you get the wrong tech at BMW, it could go South fast.

What is the name of the warranty company?