BMW Offers Greater Warranty Coverage Time on Certified Pre-Owned 2007 Models

By Brendan Moore

02.08.2010

BMW logo smallFor those of you that are interested in purchasing a late-model used BMW in North America, BMW is offering optional longer warranty coverage on its certified 2007 pre-owned model vehicles at no charge, but only for a short time during a promotional period.

The offer is good between February 2 and March 31, and can be taken by a retail buyer in lieu of the 0.9% financing being offered on the 2007 models by BMW Financial Services. And, this is an important caveat, even if you take a pass on the special financing from BMW Financial Services, you still have to finance the vehicle through BMW Financial Services using their regular financing in order to get the warranty offer. You cannot pay cash, or, get financed through another source, and be eligible for the extended warranty.

The longer coverage period for the certified vehicles is for two years or 50,000 miles, whichever comes first, and extends the new car factory warranty, which covers everything.

When I write “everything”, that is everything. The plan covers all service inspections, oil service, wiper blades, and normal wear and tear, like oxygen sensors and brake and clutch replacements. BMW Certified Pre-Owned estimates that costs for those services could add up to $1,800 USD over two years without a maintenance plan.

And what that means to the new owner is that he/she will be buying a vehicle that will be covered under this type of warranty for six years or 100,000 miles, since the warranty extension kicks in immediately after the (identical) new-vehicle warranty expires at four years/50,000 miles.

So, is this a good deal?

Maybe, depending on your point of view.

2007 BMW Z4 Coupe front 3-4 medium

Since it’s all free, there is little chance either the owner that has the car during the new-car warranty, or you, the buyer of the certified used car, will skimp on maintenance, which is reassuring when you buy an expensive used car. You do have to give up the special financing, though, and, it has to be said that the certified used BMWs (sold only at BMW dealers) go for a premium compared to what you can buy the same vehicle for out on the open market. And that difference in price is considerably more than the $1800 BMW says the typical maintenance cost is over the warranty period.

The allure here is peace of mind; certainty that BMW mechanics have gone over the car thoroughly before it is eligible for the certified program, and then more peace of mind as a result of the extended warranty. In order for this to be appealing to you, that certainty and peace of mind has to be worth the inherent price premium you’ll pay for a certified pre-owned vehicle through BMW’s program, and, it also has to be a strong enough draw so that the required financing through BMW Financial Services is not a problem.

This is the legal disclaimer in BMW’s current advertisement for the offer; we reprint it here as a point of information to our readers:

These offers are valid only for qualified customers who finance a Certified Pre-Owned BMW through BMW Financial Services and a participating BMW Center. Not all BMW Centers participate. To qualify, you must enter into a retail installment sale contract between February 2, 2010 and March 31, 2010 at a participating BMW Center. *The free maintenance offer is valid for up to 6 years or 100,000 miles from the original in-service date, whichever comes first, on 07 MY 3, 5 and 7 Series CPO models using standard BMW Financial Services rates. Only certain contract lengths are eligible. Contact your local BMW center for participation details and vehicle availability. ** Financing starting at 0.9% APR is available on Certified Pre-Owned 2007 model year 3, 5, 6, 7, X3, X5 or Z4, and on 2008 model year 3 and 5 series (M models excluded). Financing starting at 3.9% APR is available on Certified Pre-Owned 2007 M models. ***Protection Plan, backed by BMW, provides coverage for 2 years or 50,000 miles (whichever comes first) from the date of the expiration of the 4-year/50,000-mile BMW New Vehicle Limited Warranty.

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Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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3 Comments

  1. Sounds like BMW is stuck with a glut of cars coming off leases like the countless rows of them you can find at any Manheim Auction.

    But the fact remains that any prudent car buyer still needs to get any used car, CPO or not, checked out by an independent mechanic. Amazing how few used car buyers bother with an independent inspection in this day and age.

    One needs to keep in mind that the extensiveness of CPO inspections varies from dealer to dealer which performs the inspection.

    I know several CPO purchasers (of various makes) who did not follow such advice to discover that the vehicle had major collision damage (not revealed in a Carfax report) or major mechanical issues. Common to a large quantity of CPOs (again of various makes) are mismatched and severely worn tires (with plenty of tire shine on them), old oil, unchanged coolant and worn brakes.

    While the mechanical issues will be repaired if discovered timely – the fact of the matter is that the purchase price paid in theory was for a car without the issues.

  2. Good advice, George. I bought a Nissan Murano through Nissan’s CPO program, and it looked fine, had a completely clean CarFax report, etc.

    I started having small problems with it immediately, and the dealer’s own service department told me it had been wrecked badly. They bought it back from me and made me whole on the deal, but an inspection beforehand would have avoided that problem.

    And I’ll never, never trust a CarFax report again.

  3. Not a bad deal, but not a great deal, either. I don’t think it would sway me if I was on the fence. I think I’d rather have the lower fiannce rate.

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