[ezmaass]

Anyone giving this guy advice of simply, "buy a warranty" or "don't buy a warranty" is overlooking QUITE a lot of factors that should be considered.

In general, the concept that the "house" (insurance company) usually wins, is correct. In order for an insurance (or warranty) company to stay in business, they need to take in more in premiums than they pay out in claims. But that's far from the whole story.

When you're purchasing a car without a warranty, you have two options:

1. Self insure.

2. Buy a warranty.

That's it. IF something happens, somebody will be responsible for it financially. That can be you, or that can be a third party. You're gambling, of course, in terms of who might get stuck with the bill. But going back to the statement about the "house" - the house DOES pay out, and sometimes quite a lot. But they generally keep from going bankrupt because (a) they have the capital reserves to pay out, and (b) it's far from every contract that will cause them to pay out (and then more than the premiums collected).

Self insuring is a perfectly respectable option, but make sure you're doing it for the right reasons and can afford to play that game.

Ask yourself - if there was a catastrophic failure of something like the engine or transmission, how would you respond? If your answer is something like, "I'd be annoyed but then would proceed to the shop to pay for repairs" then you may be a good candidate for self insuring. However, if your answer goes something like, "I'd panic, not know where I'd get the money, and may end up in a dire financial situation" then you're definitely NOT a good candidate for self insuring. Of course, there's a whole spectrum in between.

I bought my R8 V10 new in 2014. While at 3.5 years of ownership (about 6 months shy of the warranty expiring), and with about 16k miles on the clock, the engine had a catastrophic failure - valve cracked. Now, the R8 is an incredibly reliable car - it has its problems, like any car, but in general they're considered relatively bullet-proof as far as the engine goes. My dealer had never seen something like it. The bill, had it not been under warranty? Over $55,000.

Prior to that incident, I was considering whether I got an extended warranty or not as I plan to keep the car indefinitely. Thankfully, I'm in a position where I could easily pay for any issue like this - but it doesn't mean I WANT to, either. I would have been really annoyed if that was 6 months later and I had decided against the warranty. But I would have paid for it, life would have gone on.

On the flip side, I've seen guys make similar self insurance gambles, especially on expensive cars, and it hasn't worked out well. Now, that engine failure is a true worst case scenario - in fact, my dealer said it was THE single most expensive warranty claim they've ever had. But it's also a good reminder that sh*t happens, and you need to be prepared - hope for the best but expect the worst.

Now, I've never purchased an extended warranty on any other car. But again, I've also known that I can absorb the cost should the worst happen. With my previous BMWs, it's worked out well when I've kept them beyond the warranty period. They had issues, but they never added up to what I would have paid for the warranty. But that was pure luck.

My 2007 335i? I bought it new in 2007 and kept it for close to 7 years and 89k miles. It had a few minor problems. Some of the guys on this forum - in fact MANY of them - had multiple turbo failures, multiple HPFP failures, wastegate problems, etc. The N54 was NOT known to be reliable... I got lucky.

Long story short, you need to contemplate a number of factors when deciding to buy an extended warranty or not. You'll be gambling either way, but you can do so from an informed position - the least of which should include your personal financial capacity to deal with a worst case scenario, the car's reliability history (as a model), and the UNIQUE car's maintenance and reliability history.

Lastly, I'll say this about the BMW V8 - it's NOT known to be the most reliable. The N63 was a total disaster, and the N63TU, while better, was still far from trouble-free. I had an N63TU in my 2014 550xi. I had it for 3 trouble free years - but then again, I put all of 18k miles on that car, so it was barely broken in when I got rid of it. Another member with a 2014 550xi on this forum had BMW buy it back because the problems it was experiencing just couldn't be fixed after multiple attempts. So yeah, things can go wildly different. You need to consider all the factors for your personal situation and make an informed decision.