You certainly like that phrase, but I'm not sure who you're calling the fool here. Warranties are good for some people and some items, IMO a Mini is a car with expensive parts and I expect things to break. This isn't a Toyota, it's a (partially) British car with lots of electronics. Extending the warranty to 100k miles is worth considering for the right price. A bigger concern for me has always been what is coverd with the extended warranty. Typically it is significantly less than the original warranty.

 

Do you have any reason to believe they would replace rotors when pads need replacing? Is it stated somewhere that this is Mini policy? I expect they would use the old rotors (unturned) if they are above minimum tolerance.

 

I was told this by both dealer service departments that I got prices from (I wanted to confirm after the salesman told me this when pitching the extended maintenance). I've never known a reputable shop to not at least turn the rotors when doing a brake job. The pads will just wear out too fast. And if Mini does in fact not recommend resurfacing, then they'd be exposing themselves to a huge liability just to save a couple hundred bucks. I have had to do the same thing with my Mercedes every time I get a brake job and I've never taken that to a dealer for service. Even my friend who used to run a Mercedes dealer service department and now owns his own shop told me the same thing.

-C

 

He's calling me the fool. I hope it makes him feel better about himself.

Anyway, I agree with you. I shopped around and found the best price that I could for a comprehensive warranty (happened to be my credit union). The dealer matched it, so I went with them for the added convenience and assurance that it would match the factory warranty.

-C

 

Your dealer was lying. No, and I repeat NO, auto manufacturer offers to extend the MANUFACTURER'S warranty.

And calling those after-market contracts extended warranties is a FRAUD.

There is no such thing as an extended warranty. Those are service contracts where the company agrees to repair certain things if they break.

But they are NOT in any way, shape or form warranting any aspect of the car.

 

Ok.

But what is the difference between a factory warranty, and a service contract? Isnt it kinda the same? Sure sounds that way...

 

You all should search NAM for "extended warranty." This subject has been discussed many, many times.

And there's always some people who buy these worthless things.

Do a search and you can find all the stuff I posted on these companies, including complaints to the FTC, attorneys general and an article by Consumer Reports.

But if you are convinced by what snake oil car salesmen tell you, heck go for it.

Those "warranties" should be outlawed, as some states have done.

Here are some docs:

http://www.heartinsanfrancisco.com/E...Warranties.pdf

http://www.heartinsanfrancisco.com/E...rantyFraud.pdf

http://www.heartinsanfrancisco.com/e...ontractFTC.pdf

 

Well that's part of the con, to use words that make it sound like an extended warranty. Read my articles attached. And I would not rely on any of the snake oil statements a slick car salesman says [so that he can get his 50% commission on selling these worthless things. Making $1000 to $2000 for a few minutes of work is a strong incentive to con people into buying such products.]

And if you read their brochures you will see that nowhere do they warrant anything. In fact, the opposite is true, they simply agree to repair certain things that break. But they are in no way guaranteeing the manufacturer's parts.

And ask yourself this, why is it that manufacturers limit warranties to a certain number of miles and years. Why is it that manufacturers don't offer extended warranties.

The reason is because they would go broke. So then ask why would a company offer to repair vehicles at the time when the cars will start breaking down? The reason is because they are able to make money by denying claims.

Companies cannot make money if they had to honor some type of extended warranty, to where the car is 100% covered as people are misled to think their cars are covered by the supposed extended warranty.

Lastly, if the coverage is so great, why have many of these companies gone bankrupt, why have many been closed down, and why are there so many complaints.

What other businesses have had the problems and scandals that extended service contract companies. Not many.

 

We address extended warranties,the pros and cons, consumer ratings, reviews and buying tips. Caveat emptor.

 

Hmm, this is all interesting to me.
I happen to own my MINI in Europe, Im American living abroad and my car is American SPEC. Unlike those who buy in America, my MINI only has a 2 year warranty w/ unlimited mileage, another difference is I pay for my oil change and other maintance....except warranty stuff. I was debating on a extended warranty for my MINI through the BMW/MINI shop. Its only 115 euros a YEAR. I consider this a rather good deal. Even if I only use the warranty one time I consider itself paid for.
How much money are they charging in America that makes people consider it a waste?

 

Hey, folks, if you think it's fun arguing with your private health care insurer, over what is covered and what isn't when you need a major procedure, just think of the fun you'll have with your "service contract" provider. They are nowhere near as regulated as health care insurers.

 

Some interesting views here.

I’ve gone both routes, although I’ve only purchased an EW once (and I agree “warranty” is a misnomer, it’s really a sort of insurance contract). I got my money out of it, so I was happy. But you’ve got to be really careful. Many dealer’s who sell these contracts imply they are “backed” by the manufacturer but they may not be. In fact, the dealership may not even want to do the repairs if you intend to have them paid by your warranty company. I also noticed that the BMW salesperson who I dealt with for financing rather artfully confused an extended service contract with an extended warranty. They are very different; one is simply pre-paying for some sorts of service work, another is insurance for certain things that go wrong with your car. They wanted to sell me a service contract for $2400! claiming I’d need a full brake job a year (yeah, the dealer will want you to get new rotors). That was definitely a waste; I could do the same for about $500 less at my local garage, and rates aren’t exactly cheap where I live.

And remember that a service contract won’t help you, apparently, if you move or go where there aren’t MINI dealers. And who knows if your dealership is gonna stay open in these times?

Extended warranties can have similar problems. I can spend the time and have the expertise to work through all the caveats and such, but like with any other contract you take the risk that the other party won’t be able to perform. Manufacturer backing of the warranties, even it if exists, is also risky; the Big Three were whining in DC that people won’t buy cars because if they go bust they fear their warranties won’t be honored.

So should you buy one? Only if you can do your own due diligence. Consumer ratings like JD Power show Minis having lots of problems, so maybe if you can find a good policy. MichaelSF has a link to a good article where research showed that consumers got on average $700 in repairs on $1000 insurance; that may not be bad for some of you. I pay way more than that on other forms of insurance that I never make claims on, it just depends on how risk averse you are.

For infos sake, I got a quote on a used 2007 Cooper with 36K miles, in CA.

A pretty full-on EW with $200 deductible that ran 4 yrs or 60k miles (to 100K) would cost $1862 at WarrantyDirect. It’s backed by General Fidelity Insurance Company, which in turn is owned by BofA. Seems pretty solvent, but these days.... Anyway, the warranty covers pretty much similar stuff to the factory thing. Has a towing benefit, rental car allowance, lockout and some other stuff. The stuff that is excluded is mostly stuff you could wear out, like clutch, battery, door seals and upholstery, stuff that gets broken easily (door handles, headlight lenses, bumpers, and even convertible tops), and high zoot electronic options, like GPS. But it covers your auto trans, water pump, engine, etc etc. IMHO you’d buy this if you are afraid of a pretty catastrophic one-time failure of a big component (since four more minor repairs over four years would have to be around $700 each for you to break even).

For comparison, a new Honda Civic would be about $600 for the same term with $100 deductible if purchased when the car was new.

Note also that the MINI quote was for a USED vehicle; they are much cheaper if bought when the car is new or bought for fewer miles. It was $900 for 6 yrs/75k with $100 for a new 2008 MINI; the Honda would be $428 (ouch) for the same terms. That would I guess about double the factory warranty.

As I noted, I did use this company before on a Ford van we used. It came within $100 or so of breaking even, so we did OK. As it turns out, the warranty company may outlast Ford, but that’s another story....

Rob

 

You're seriously talking apples and oranges here. The financial impact of a medical procedure, serious damage to your home, or liability from an auto accident can easily run into the hundreds of thousands of dollars (or even more), which would be financially devastating for most people. I had one operation and a two-week hospital stay that cost me $140k, so I'm obviously a big fan of medical coverage.

The financial wisdom is to "insure against catastrophes, not inconveniences." On average over your lifetime, you'll likely never get your money back from *any* kind of insurance, but insurance still makes sense in cases where a loss has the potential to wipe out your life savings and force you into bankruptcy.

But for things like an extended warranty on a DVD player or even a car, it makes less sense. You're giving away money up front against the "expected cost" of future repairs (the cost of the repair multiplied by the probability of needing that repair during the extended warranty period.)

Of course, if having to pay out-of-pocket for a new engine or transmission would devastate you financially, then insurance makes more sense.

 

Proper asset risk management includes much more than just potential one time catastrophic/large payout scenarios. No one's going to be convinced here, but everyone should do themselves a favor and take a basic asset or financial management course at a community college. Obviously it won't prepare you like my MBA program did, but it will give you a foundation. You have to do research and educate yourself. To simply dismiss all extended warranty programs (service contracts, whatever you want to call them) is as foolish as accepting them all.

I'm done.

Good luck to you all.

Good bye.

 

Sorry, didn't mean to drive you off. On the chance that you come back to the thread, I'd be curious to find out the situations where an extended warranty makes sense, assuming:

1) An out-of-warranty repair isn't going to be a significant financial hardship, and

2) The actuaries that come up with the pricing for the extended warranties know what they're doing.

Because the way I understand it, the cost for the extended warranty has to be greater than the expected future cost of in-warranty repairs, or else the actuaries aren't doing their jobs correctly and the warranty company will lose money on average.

Of course, if even a slim chance of a major out-of-pocket repair is too much of a financial risk, that's obviously another story.

 

I'm curious to know (I have the extended service plan)
if the rotors are replaced free at the dealer when they
do brakes.

I've followed quite a number of threads here on the
service plan and I've never actually seen a
definative for-sure answer.

As in, yes, they replace the rotors, free, when they do the pads.

Or is it something like they take your car apart, say hey guess
what, we didn't realize this but you need rotors, too. (sure)
And with your car apart and 120 miles from home, they declare,
oh, you have to pay $600 for the rotors.......BUT THE PADS ARE
OF COURSE FREE.

I'd be interested to know the answer.

Because it seems the 1300 or more i paid for this I cant remember
the exact amount after reading all the recommended service
intervals - basically not much until 100,000 miles, the only thing
I will get is a set of brakes and a couple oil changes
(and of course the wipers! ha ha)

So its already 1300 plus, basically for a set of brakes.

Which doesn't raise my self esteem at all.

Everything else you do like spark plugs, trans service, X, Y, Z,
are officially to occur at 100,000 miles. Outside the serice plan.

 

I bought the Wheels and Tire warranty with my mini and i have already gotten a "free" tire out of the deal and one of my Rims is bent a little and they said they will replace that also. That has turned on well for me.

 

Where the financial analysis of these contracts gets muddy is that you pay retail and they pay wholesale. For instance: You get a tire warranty for $800. You fry 2 tires. They say they're worth $300 each. So you're only $200 down with 2 years to play. But they probably pay $100. So they're up $600. They're happy, you're happy, it's a win win!

 

You are making assumptions that do not apply. Extended service, or repair, contracts are NOT insurance. [Note, I am NOT talking about service in terms of vehicle maintenance, which has sometimes been referred to "having the MINI serviced", oil changes, and the like.] Anyway, that's the trouble, by these not being considered insurance they escape regulation by government agencies, hence they get away with what they do and when they spend more than what comes in, they simply BK themselves and reconstitute under a different entity.

These companies are very careful not to call themselves insurance and not to provide any services that could be construed as insurance so to escape scrutiny and regulation.

Moreover, service contracts don't insure against anything. The company simply agrees to cover very specific breakdowns and repairs. Under freedom of contract principles people are stuck with the terms of the contract. That is why people get ripped off.

For example, the contract looks impressive when it says "Transmission" in bold print followed by a list of parts that are covered [or exclusions, that is, items not covered]. The consumer does not understand what anything is, but the list looks impressive and the consumer thinks the entire transmission is covered when in fact the contract has been written to avoid the company from having to pay any sizable claim.

Sidenote: While I don't have a service contract on my MINI, I have property insurance, car insurance and E & O coverage.

 

Condor27596,

I attended a free maintenance lecture at Crown MINI in Richmond last Saturday. The mechanic specifically stated that one reason brake dust is so prevalent on recent MINIs is that they have made the pads softer so they wear quicker. This causes the pads to be changed sooner, but many times allows MINI to avoid having to change the rotors at the same time (softer pad puts less wear on rotor).

True? Who knows? But he did state that to the folks assembled there (maybe 20-30), in response to a question about replacing pads and rotors under warranty.

 

I have the 100k service agreement, and from what I understand, if the service is needed within 1000 miles before or after you hit 100k, it's covered.

This is not so with the warranty, just the service agreement. But, I'll double check.

I got a quote an an extended warranty from AAA, they have several plans average cost about 2500, the best one 3600. Of course, like MINI, they offer 0% financing but still, I really think I'm just going to take my chances that nothing goes wrong with the car, and try to keep a little next egg in case it does.

If I did decide to get the EW, I'd go with AAA's 'approved' 3rd party. I mean if you can't trust AAA, who can ya trust?

 

First, don't confuse service agreements (brakes, oil, etc...) with repairs. Two different animals. I was once told that to get the EW through MINI (third party or not, doesn't matter THAT much to me), they'll insist on the extended maintenance agreement as well to "ensure" that the car is mainaitined properly. No idea if that's true or not, but that's a consideration.

Second, my MA said that so long as the brakes are changed under warranty, MINI requires them to change both pads and rotors and return them as a set to MINI to get $$ credit for the service. Both MUST be returned. Could he be lying..maybe, but I doubt it.

Third, I bought a POS from Carmax and the EW...it paid for itself three times over in repairs. Common, no,or the EW companies would go under. But for cars with expensive repairs like the MINI it can make sense if for no other reason than the piece of mind. Face it, MINI maintenance is expensive...and not just because of the dealer rates. It has a history of big parts going bad (supercharger/water pump, power steering pump).

Fourth...don't get so hung up on the lingo "extended warranty"...we know the car isn't 100% covered, but it does replace parts that break and that's what we want. You never did explain the huge difference that you're implying as was requested by another poster.

 

There is a significant difference between policies that list what is covered vs. policies that list what is excluded. You definitely want the one that covers everything but what is excluded. If it is not on the list it is covered. My excluded items are not major; batteries, tires, interior trim, and not a whole lot else.

You have to decide how much risk you want to take. Life insurance, health insurance, and even auto insurance are profitable for the insurers. If I had skipped everything but the liability portion of my car insurance for the last 10 years I would have been way ahead, but that was I risk I chose not to take.

 

RJ:
Bad move and I know first hand. I went for service yesterday and complained to my SA that I felt a vibration after 65mph. True to form I have 2 bent rims. So I say, hey no biggie, I have the extended wheel coverage that my finance guy told me would cover bent rims especially because I live in NYC. I usually avoid these warranties but with a "guaranteee" that it would cover the wheels why not? It cost me $300 (down from $500) and I figured the first time I needed it it would pay for itself right? Wrong!
It will pay out ONLY if the tire is off the wheel/rim and it doesn't hold air! WTF???? I was so pissed I couldn't see straight. I went looking for the finance guy to DEMAND a refund, of course he wasn't in yesterday. (Must be nice having an even longer Thanksgiving holiday weekend huh?)

 

I didn't get the extended service/warannty contract when we bought our car.
In talking to the 1st dealer/MA, when he brought up needing two complete brake jobs was the "norm" for a Mini in the 1st 100K, I kinda had to ask what was wrong with the design of the brakes. A 2600lb car shouldn't be blowing through brakes under normal circumstances that quickly.
I almost dismissed the Mini Cooper as an option based solely on this sales pitch. I'm glad I didn't though.

As for the replacing of rotors with pads. A long time ago, in a life far away, I did brake jobs, lots of brakes, 100's of them. They are incredibly simple.
At that time the law, consumer protection and safety laws, required that the pad to rotor/drum contact had to be guaranteed to be 100%, or the vehicle could not be released. Henceforth the turning of rotors, and drums. Not because they always needed it, but to meet the 100% requirement, or the repair facility could be held liable in the event of an accident where braking performance was in question.

If Mini is requiring rotor replacement, because they won't allow turning, it may be a product safety liability concern on their part,and not the dealer trying to scam you. It also may vary state to state.