Tuesday 14th March 2006

BMW hikes warranty charges

Is Munich losing faith in product quality?

---

BMW M6 - watch the warranty costs

Is BMW losing faith in the build quality of its cars? It would seem so, judging by the company's recent actions.

BMW M car owners are up in arms following an apparent change in warranty policy by the Munich firm. The upshot is that, according to one BMW forum, in 2006 the cost of an M car warranty leapt by 46 per cent to over £1,000 while cover was limited to the first 60,000 miles only. It's now more than double the price it was in 2004, claimed one forum contributor.

BMW's warranty price is compared to that of Porsche, which charges £725 for any car under nine years old, and for the first 125,000 miles. The contributor has compared the whole life cost and come up with a cost of £9,186 for a BMW over the first nine years, but only £5,075 for a Porsche, assuming one claim and 10,000 miles per year.

Not only is this a reduction in value, it doesn't bode well for residuals, especially those of slightly older cars. BMW is not short of profits so are its M cars really so much more costly to fix over time -- or is this just a way of soaking more cash from enthusiasts for the company's flagship products?

We should be told...

• Off-PH BMW forum

[r988]

Oh well, at least Hyundai are offering long warranties

[dick dastardly]

My next car purchase was almost definately going to be a CSL but now I'm thinking twice. Way to go BMW.

[inttap]

dick dastardly said:

My next car purchase was almost definately going to be a CSL but now I'm thinking twice. Way to go BMW.

The full story, and it is worse than this short summary, is at:

www.bm3w.co.uk/ubbthreads/showflat.php?Cat=0&Number=397962&an=&page=&vc=1

BMW are now (as of yesterday's date) inviting feedback and are willing to review the situation in 6 months.

6 months may be too long for some people who will defect, but it is feedback they are wanting, and that's what we should be sending to their MD Jim O'Donnell. His PA's e-mail address is:

[e-mail]

This is not just a BMW story - if they get away with it, it will be Audi, Porsche next. So we all have an interest in this issue.

>> Edited by inttap on Tuesday 14th March 13:27

[steve-v8s]

I abandoned the BM policy on my 530 for two reasons. The extraordinary cost and the fact that the local main dealer was unable to fix the problems I had. Both of the faults were diagnosed on PH and I then went back to the dealer and told them which bit to replace. The money stays in my pocket, until I give some of it to a knowledgeable and helpful indie.

[BigGriff]

My M series owning friends and colleagues all seem to have suffered various failures so obviously BMW is feeling the strain. Commercially it makes sense from a warranty cost perspective, but from a broader business perspective it sends totally the wrong message.

That's a new M3 off the shopping list

[needham]

I declined to continue the cover on my 330 due to the high cost...it simply wasn't worth it.Servicing is now done better and cheaper by my local garage,with customer care on a personal level.I really don't think residuals are affected.

[havoc]

BigGriff said:

My M series owning friends and colleagues all seem to have suffered various failures so obviously BMW is feeling the strain. Commercially it makes sense from a warranty cost perspective, but from a broader business perspective it sends totally the wrong message. That's a new M3 off the shopping list

Interesting PR though - look at Speed-Six vs M3 straight-six. Both seem to be, ah, fragile if not nurtured, both cost a bomb to fix, yet because BMW very publicly supported rebuilds under/near warranty, while TVR dropped a clanger pretending the issue didn't exist, the BM's have the better reputation.

Yet for a buyer of an older car (say £20k to spend), both have got to be big risks...


Oh...and the comment on residuals is probably pretty accurate.

[4WD]

Precisely why I was predicting new M5 prices to dive on another thread a few days ago. RS4 is the way forward.

[BigGriff]

Most of the failures are simple components like sensors, but due to the factory build processes fixing them is not easy and compenent life is sometimes very short. M5's seem to suufer a number of engine sensor faults which does not bode well for the 2nd or 3rd owners.

My 3 series had the dash out three times. I don't think I would have liked to shoulder that cost, but neither am I inclined to pay the warranty premiums, hence a Honda Accord became the default choice.

Look at Merc when they down scaled on fit and finish. They lost shed loads of cash and a tarnished reputation. Porsche on the other hand have shouldered the cost of the various 996/997 engine DMS failures and go from strength to strength. BMW I feel are going down the Merc route. Style over substance!

R

[havoc]

BigGriff said:

... hence a Honda ... became the default choice.

Interesting how the Japanese aren't suffering anywhere near as many problems as the Germans. Yet which nation, in the general public perception, is better for 'build quality'?!? But for how much longer?

[BigGriff]

I admit I did look at Audi but I just wanted turn key reliability. The TVR keeps me in the garage enough.

BMW's never made it to short list. I love the 320d, but at £10k plus for the BMW, on a like for like spec, the Honda just beat the BMW hollow for what I wanted (not for driving experience mind!). So far my faith has not been misplaced and to be fair I dont expect it to be.

I just wish BMW would work out that loading cars with extras that goes wrong just upsets customers and ruins your hard fought reputation. Similarly oversupply is not just a Honda issue (indeed they seem better on this than BMW)given the amount of 3 series there are around.

[dazren]

BigGriff said:

Most of the failures are simple components like sensors, but due to the factory build processes fixing them is not easy and compenent life is sometimes very short. M5's seem to suufer a number of engine sensor faults which does not bode well for the 2nd or 3rd owners.

Take a look over at www.m5board.com on the E39 M5 forum. Two things to look out for:

1 Carbon Build up, apparantly a £7k fix.
2 VANOS replacement, both sides comes to £4.5k can only be done by main dealer due to specialist tools.

This may go a way to explaining the £1,800+ premiums for warrantys. Certainly not helping their customers, that's for sure. Do high mileage, problems occur get work done under three year warranty. Do low mileage and get shafted as the problems occur when the warranty has expired.

BigGriff said:

Look at Merc when they down scaled on fit and finish. They lost shed loads of cash and a tarnished reputation. Porsche on the other hand have shouldered the cost of the various 996/997 engine DMS failures and go from strength to strength. BMW I feel are going down the Merc route. Style over substance!

I think you mean RMS (Rear Main Seal). DMS is a tuning company that is well known for increasing power and delimiting cars (Oh and hooning their development cars around Bruntingthorpe during VMAX ).

DAZ

>> Edited by dazren on Tuesday 14th March 15:37

[liner]

Inttap is right - it is even worse than the headline story.

With an M car over 60,000 miles premiums rocket by 159% this year, to £1868 (159% rise !!!). And they removed steering & suspension from the cover, also MOT and battery. To cap it all they now charge a £250 excess for all M car claims !!!

The Porsche comparison in the story applies if 10k miles pa. At 15k miles pa the M car warranty (£11,622 for 9 yrs, 1 claim p.a.) is more than double Porsche's £5,075.

Many owners are livid, and reconsidering their stance on owning and/or servicing. BMW don't seem to realise they are damaging themselves by alienating loyal customers and by showing they don't believe in M cars any more. Audi's instrument pod problem pales into insignificance.

BMW blame it on insurers (who are not influenced by BMW!), and on being fair to other models (did any 3/5 series owner notice a slight drop in premium?). Yes, M Cars had engine issues three yrs ago, but these have been fully fixed (design changes/recall) or so they said. Basing premiums on that history is hardly fair (new insurer).

Many M car owners are writing or emailing to make their views known, following a letter from the founder of BM3W/BM5W (see link to the site on Inttap's post). Some are cynical ('they won't change') but if we don't write we have only ourselves to blame.

And if they do relent, I might even keep my M car.



>> Edited by liner on Tuesday 14th March 15:52

>> Edited by liner on Tuesday 14th March 15:54

[BigGriff]

You are correct RMS seal. Not DMS! Doh!

[daver]

With dealers that think the remedy to the failure of the rear view mirror adhesive is to completely replace the windscreen and mirror (see separate thread), is it any wonder that the warranties are becoming more expensive?!

[BigGriff]

Dealers do not get the full charge out rate for warranty work. TVR for example were only paying dealers 40% of their normal charge out rate, hence I expect why so many packed up! No doubt BMW are the same.

Makes me think that if I was a BMW dealer and I can fill my workshops full of paying customers what would my attitude be to warranty work...........

R

[a4dbl]

I run a BMW C1 scooter;without warning all owners were told it was not possible to renew the warranty,even on vehicles just two years old.

[inttap]

a4dbl said:

I run a BMW C1 scooter;without warning all owners were told it was not possible to renew the warranty,even on vehicles just two years old.

Jeez. I can understand (but not agree) that the M engined cars may suddenly fall apart (this is the message they are sending!!!), but the C1 scooter?

I suppose once again their will assert they have bad claims history on these scooters. A bad claims history implies unreliable products (anyone remember Amstrad computers?)

Amstrad & BMW in the same sentence - Would Sugar fire the QC Manager?

[shangani]

BMW have been leaning this way for years. When I lived in South Africa, Beemers had a motorplan which was warranty + servicing and covered brakes, but not tyres. My M3 motorplan increased from £950 a year to wait for it: £8000 a year overnight! That was only for 20000km covered as well!

The resale value of M3's took a huge knock. Mine dropped by over £5000 overnight when that happened. If I had sold a month earlier I would have been laughing. Last Beemer I will ever buy.

[dghm3]

I renewed the warranty on my E36 M3 saloon (FSH etc.) last August at over £700. One month later the service (not the most expensive - yet to come!) cost over £1000 with lots noted but not done . . .

The only thing the warranty covered - after wrangles back and forth to BMW - was the power steering mechanism which I understand will be removed from cover despite the new price hikes.

Will I renew? No, nor will I use the dealer for sevice anymore; despite effects on the re-sale value.

If BMW want to cut costs and keep their reputation why can't they make cars that don't fail in so many areas as seems to be reported? Is it unreasonable to expect to cover high mileages in a car that cost over £40,000? For God's sake they have been making 6 cylinder engines for long enough so why are they so dodgy?

NOT HAPPY ! and hope BMW read the thread . . .