Review of Warranty charges in 6 months
Friday 17th March 2006
BMW M5: too expensive to run?BMW's attitude to its new warranty charges, which caused outrage among some customers for its most expensive products, has softened slightly. It could mean a reduction in the cost of a warranty on an M car, which rose 46 per cent this year (see link below for full story).
BMW softens warranty stance
Potential price drop in the offing?
BMW M5: too expensive to run?
The changed stance is revealed in a letter from BMW to one customer who complained. Hedged with apologies, a representative of the Munich-based company responded saying that, in essence, its warranty charges were based on the cost of supplying the guarantee but that they could be reduced if that cost fell.
Here's the letter in full:
Dear Mr xxx
Thank you for your recent email sent to Mrs Fay Wells, regarding changes to BMW Insured Warranty products effective from 1 February 2006. Your email has been sent to me for response. I was sorry to learn of your dissatisfaction and, on behalf of BMW UK, regret the frustration this matter has caused. Moreover, I must stress that the loyalty you have shown to BMW is indeed appreciated and I apologise that changes to this warranty product have caused you to lose faith in our brand.
I acknowledge your request that I should respond to your email personally.
However, I have noted your comments and the points you raise are answered by our company response below:
The actions taken, as with any insured product are based on historic costs and the impact these have on the fund held by the Insurance Underwriter. Whilst BMW have in the past priced M product the same as its equivalent BMW model derivative, we believed that this was unfair to these owners who represent a lower warranty cost base.
None of our insured warranty products are profit making and the changes reflect our cost prediction based on actual historic trends.
With regard to the insurance excess we have introduced, this was done to keep the premium as low as possible.
Whilst we are very sorry that you have had cause to complain, we regret that it will not be possible to reduce the cost of these warranties in the future unless actual costs reduce. However, a further review will be undertaken in six months time to see if the situation has changed, giving due consideration to customer correspondence.
In closing, I thank you for taking the time to contact us with your feedback. I regret that you have had cause to contact us under these circumstances and hope that future experience will reaffirm your faith in our brand.
Yours sincerely
...
Customer Service Executive
Taking this at face value and given the high purchase and running costs of M cars even before the new warranty price hike, maybe BMW should redouble its efforts on making cars that tolerate being driven as they were designed to be driven. If it did, maybe the warranties wouldn't cost as much to fulfil.
Discussion
Since ALL dealer labour costs increase weekly together with the monthly increased costs of parts, dont hold your breath for any reductions.If the product was of better quality for the purpose that BMW markets it for, we wouldnt need to keep insuring it cos it may break--once again.Independent service specialists dont seem to have anything like the rampent inflation found at the megadealers.
[quote bmw tw@t] Whilst BMW have in the past priced M product the same as its equivalent BMW model derivative, we believed that this was unfair to these owners who represent a lower warranty cost base.
[/quote]
Yeah, well why has the warranty cost on the lower warranty cost base gone up by 50% then.
T.ssers
[/quote]
Yeah, well why has the warranty cost on the lower warranty cost base gone up by 50% then.
T.ssers
They are sending that same response to anyone who complains.
Sorry, but I don't think they are going to review the situation at all. They aren't bothered about backing up their premium models now that they have set their stall out as a mainstream manufacturer.
When they charge a £250 excess for every warranty claim for M models and £100 for the same fault eg heater reistor pack on a "normal" beemer, they just want more cash in.
This will affect residual values and will reduce dealer work on older cars - at £2k pa I'm not interested in renewing the warranty and won't be going back to the dealers for servicing work - so BM lose out on about £3k of income and I doubt now that I'd have another M car if the manufacturer isn't prepared to back up design faults after 3 years/60k miles.
And it has to be remembered that at 100k miles they will NOT let you have a warranty, ergo they expect the 100k mile cars (4 years old for a reasonable business user?) to be a nightmare to maintain. Says a lot about their belief in their own product I reckon
Sorry, but I don't think they are going to review the situation at all. They aren't bothered about backing up their premium models now that they have set their stall out as a mainstream manufacturer.
When they charge a £250 excess for every warranty claim for M models and £100 for the same fault eg heater reistor pack on a "normal" beemer, they just want more cash in.
This will affect residual values and will reduce dealer work on older cars - at £2k pa I'm not interested in renewing the warranty and won't be going back to the dealers for servicing work - so BM lose out on about £3k of income and I doubt now that I'd have another M car if the manufacturer isn't prepared to back up design faults after 3 years/60k miles.
And it has to be remembered that at 100k miles they will NOT let you have a warranty, ergo they expect the 100k mile cars (4 years old for a reasonable business user?) to be a nightmare to maintain. Says a lot about their belief in their own product I reckon
Well said Mondeoman...
Also I heard yesterday that the dealers will still only be charged £700 for a used M car warranty that they supply to a customer and that they will not have to pay the increased price, but the customer has to pay the full new price once the insurance/warranty has expired.
Aren't we lucky?
Also I heard yesterday that the dealers will still only be charged £700 for a used M car warranty that they supply to a customer and that they will not have to pay the increased price, but the customer has to pay the full new price once the insurance/warranty has expired.
Aren't we lucky?
My initial reply from BMW was similar to the one posted on this thread.
I subsequently replied and received the following response.
Thank you for your further communication.
We do appreciate the strength of feeling within the BM3W.co.uk web community but are not in a position to change the terms of our Insured Warranty products. We also appreciate that this may ultimately result in you not purchasing this product and regrettably may have a detrimental effect on your loyalty to our Brand.
Any further communication will be retained on file for future reference but will not receive a response.
Yours sincerley,
Harkan Suleyman
Customer Service Manager
BMW UK
Before writing to them I did not know the BM3W Site existed.
I subsequently replied and received the following response.
Thank you for your further communication.
We do appreciate the strength of feeling within the BM3W.co.uk web community but are not in a position to change the terms of our Insured Warranty products. We also appreciate that this may ultimately result in you not purchasing this product and regrettably may have a detrimental effect on your loyalty to our Brand.
Any further communication will be retained on file for future reference but will not receive a response.
Yours sincerley,
Harkan Suleyman
Customer Service Manager
BMW UK
Before writing to them I did not know the BM3W Site existed.
Gimlet said:
My initial reply from BMW was similar to the one posted on this thread.
I subsequently replied and received the following response.
Thank you for your further communication.
We do appreciate the strength of feeling within the BM3W.co.uk web community but are not in a position to change the terms of our Insured Warranty products. We also appreciate that this may ultimately result in you not purchasing this product and regrettably may have a detrimental effect on your loyalty to our Brand.
Any further communication will be retained on file for future reference but will not receive a response.
Yours sincerley,
Harkan Suleyman
Customer Service Manager
BMW UK
Before writing to them I did not know the BM3W Site existed.
Here's the text of another letter sent by BMW
"Thank you for your response.
We appreciate the strength of feeling within both pistonhead.com and BM3W.co.uk web community but the terms and conditions for this years warranty will not be reviewed again until 2007.
In closing this is our final view on the matter".
Clearly they don't want to recognise that people on the BMWCC are also not happy. or the M5 Forum .......
Initially they said a review would take place in 6 months. The changes took place on February 1. Add 6 months = August 1, 2006. So why are they now saying 2007? Not only are the cars more unreliable (according to BMW) but it seems so are the people employed at BMW.
>> Edited by inttap on Friday 17th March 15:18
I have never had a BMW outside of its 3 year warranty. My experience of BMW M power cars has left me amazed that the extended warranty used to be so cheap. All my cars have had massive problems, an average of £3,000 of work per 12 months owned!
To be fair many of the failures have been due to bad workmanship in the dealers hands, not bad design. My current E46 M3 for example, Split its floorpan in 3 places due to the dealer not correctly replacing a diff that had broken. This mean't new dampers and springs as they had cracked, another new diff, new propshaft, new boot floor, and lending me a 120d for 7 weeks and 5,000 miles while they fixed it. Very expensive.
Design issues have come up though with the E36 M3 and Vanos units, I had 3 in 30,000 miles, and the SMG gave up! The rear damper snapped on My M Coupe which was interesting at 80mph. The Electric M diff on the E46 M3 seems to gain excessive play in it every 3,000 miles and blow its oil seals if used in any anger. Likewise the front hubs give up and give a feeling like having warped disks on a regular basis.
I will only ever consider a sub 3 year old BMW from now on, if a BMW at all, as I am sick of them breaking all the time. Shame as all have been good fun to drive.
To be fair many of the failures have been due to bad workmanship in the dealers hands, not bad design. My current E46 M3 for example, Split its floorpan in 3 places due to the dealer not correctly replacing a diff that had broken. This mean't new dampers and springs as they had cracked, another new diff, new propshaft, new boot floor, and lending me a 120d for 7 weeks and 5,000 miles while they fixed it. Very expensive.
Design issues have come up though with the E36 M3 and Vanos units, I had 3 in 30,000 miles, and the SMG gave up! The rear damper snapped on My M Coupe which was interesting at 80mph. The Electric M diff on the E46 M3 seems to gain excessive play in it every 3,000 miles and blow its oil seals if used in any anger. Likewise the front hubs give up and give a feeling like having warped disks on a regular basis.
I will only ever consider a sub 3 year old BMW from now on, if a BMW at all, as I am sick of them breaking all the time. Shame as all have been good fun to drive.
I wrote an email too, similar reply to those already shown.
They do refer to BM3W community website, perhaps now the link should be sent outside the UK and find out what our overseas BMW drivers pay/increase on their warranty and get more people to bombard BMW for a proper response.....now what was AutoCAR's email address again...
I think BMW will hold on until the last minute before making any changes, but I have a feeling they will reduce the costs or offer a different, more value option!
I will watch this space
They do refer to BM3W community website, perhaps now the link should be sent outside the UK and find out what our overseas BMW drivers pay/increase on their warranty and get more people to bombard BMW for a proper response.....now what was AutoCAR's email address again...
I think BMW will hold on until the last minute before making any changes, but I have a feeling they will reduce the costs or offer a different, more value option!
I will watch this space
Nostrils said:
I wrote an email too, similar reply to those already shown.
They do refer to BM3W community website, perhaps now the link should be sent outside the UK and find out what our overseas BMW drivers pay/increase on their warranty and get more people to bombard BMW for a proper response.....now what was AutoCAR's email address again...
I think BMW will hold on until the last minute before making any changes, but I have a feeling they will reduce the costs or offer a different, more value option!
I will watch this space
You are right, they will play brinkmanship etc etc, but do not realise that the smell from this problem is spreading faster than Bird Flu.. much much faster.
Nostrils If you have any overseas site addresses, do let me know.
In the UK the premiums went up:
from £399 to $450 OK
from 450 to £510 OK
from £510 to £720 that hurt but Ok (many dropped out)
from £720 to £1,868 What happened??
Something must have happened in 2005 to increase the premium by this staggering amount/percentage. Katrina? QC?.
BMW, please explain with an itemized account of the disasters that occured in 2005, and why you expect more of the same.
>> Edited by inttap on Friday 17th March 19:11
I wrote to them and received the exact copy of the letter quoted at the top of the page. I cannot understand why BMW are ignoring their customers and seem not to notice/care that many of us are going to be thinking very seriously about moving to other car brands. Surely they're gonna start losing money on this whole fiasco.
Has anyone written anything about the differences in price for warranties between porsches and BMW and received a reply... I think the thought of floods of customers buying Porkies could give them a bit of a fright, and maybe get someone at BMW to actually write an email that isn't just reconstituted bo***cks.
C'mon BMW. SORT IT OUT!!!
Has anyone written anything about the differences in price for warranties between porsches and BMW and received a reply... I think the thought of floods of customers buying Porkies could give them a bit of a fright, and maybe get someone at BMW to actually write an email that isn't just reconstituted bo***cks.
C'mon BMW. SORT IT OUT!!!
billy83 said:
Has anyone written anything about the differences in price for warranties between porsches and BMW and received a reply... I think the thought of floods of customers buying Porkies could give them a bit of a fright, and maybe get someone at BMW to actually write an email that isn't just reconstituted bo***cks.
C'mon BMW. SORT IT OUT!!!
Check this out
www.pistonheads.co.uk/news/default.asp?storyId=13342
Also www.bm3w.co.uk (look under busiest 10 threads) for the full story & uninspiring responses from BMW
BMW are already battening the hatches - their replies are ever shorter, and merely regurgitating the same old stuff - " We will never negotiate with Customers. We will never listen to customers, You should be grateful we sell you a car, We are BMW. We are Superior.....
>> Edited by inttap on Friday 17th March 20:13
billy83 said:
Has anyone written anything about the differences in price for warranties between porsches and BMW and received a reply...
See www.pistonheads.co.uk/gassing/topic.asp?t=246572&f=72&h=0&p=2
The important point for me was "the changes reflect our cost prediction based on actual historic trends". In other words "we noticed the M series cars breakdown a lot so we jacked up the price".
This is also my experience and one reason why I no longer drive an M5.
I bought a 2.5 year old 39000 mile E39 M5 in 2003 from a BMW dealer and the trouble started the next week. To keep a long story short the following happened during 2 years and 15000 miles -
The clutch was knackered by the previous owner,
the MAFs were faulty,
the spark plugs needed changing 1 service interval before they were due,
the car failed to start one morning without any explanation why by BMW,
it ran out of fuel when the gauge read 1/4 because the fuel tank level sender broke,
the left rear ABS sensor broke,
the trafficmaster (part of the comms pack) broke,
a wheel nearly fell off when three wheel nuts broke,
the brakes grossly overheated during a 30 min fun run on a A/B road,
the rear suspension bushes were knackered,
the diff was making weird noises and didn't seem to work very well at the end,
finally it changed it oil consumption from 1 litre per 4000 miles to 1 litre per 800 miles almost overnight.
After all that I got a warrenty renewal letter for £940 up from £620 the previous year, that was April 2005.
>> Edited by ColinM on Saturday 18th March 09:48
This is also my experience and one reason why I no longer drive an M5.
I bought a 2.5 year old 39000 mile E39 M5 in 2003 from a BMW dealer and the trouble started the next week. To keep a long story short the following happened during 2 years and 15000 miles -
The clutch was knackered by the previous owner,
the MAFs were faulty,
the spark plugs needed changing 1 service interval before they were due,
the car failed to start one morning without any explanation why by BMW,
it ran out of fuel when the gauge read 1/4 because the fuel tank level sender broke,
the left rear ABS sensor broke,
the trafficmaster (part of the comms pack) broke,
a wheel nearly fell off when three wheel nuts broke,
the brakes grossly overheated during a 30 min fun run on a A/B road,
the rear suspension bushes were knackered,
the diff was making weird noises and didn't seem to work very well at the end,
finally it changed it oil consumption from 1 litre per 4000 miles to 1 litre per 800 miles almost overnight.
After all that I got a warrenty renewal letter for £940 up from £620 the previous year, that was April 2005.
>> Edited by ColinM on Saturday 18th March 09:48
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