I arranged lease deals for my friends and family throughout the years and almost everyone calls from the F&I office (Finance and Insurance) if they should buy their protection products. Most of these products are there for your convenience so you don’t have to deal with it. I know lot of opinionated people on the forums will rage against all F&I products because most of them assume everyone else are OCD (Obsessive Car Disorder) and will keep their car in minty condition or have ninja reflex at dodging potholes. I am writing this article for general car buying friends. The following are list of common F&I products pitched at the F&I office and it is going to be BMW-lease centric.
Paint Protection: (NO THANKS)
Skip! Unless the dealer throws it in for “free”
Wear and Tear Protection aka (Safe Lease): (GOOD)
What does it cover? This one covers wear and tear charge coverage up to $5000, missing parts coverage of up to $3,000 and simply walk away at turn in. This usually cost around $1000 bucks but If you are not OCD with your car and religiously check your bumper from parking berms and driveway. Common damages on leased cars are. Bumper mustache damage will cost you $600 dollar to for a re-spray. A pair of worn RFT will cost you $600. Scratches larger than a credit card would be considered as a damaged panel.
If you have time and connection to do a lease car clean up with a friendly body shop which would probably cost around $1000-$1200 to tidy things up then you can probably pass on it and save some money if nothing happens during the 3 year period. However if you want the convenience and peace of mind. This is a good product if the price is right.
Wheel and Tire Protections: (MAYBE)
This is a wheel and tire protection that covers your tire from road hazard damage (ie. Nails or pothole bubble damage) AND wheel. If your car is running skinny tires (like mine 225/35/R19 and 255/30/R19), then your wheels are prime candidate for bending or cracking if you are not careful with the wonderful potholes in LA or hidden bridge expansion joints for folks in the Tri-State NY area. The cost of replacing the wheel is well worth the cost and BMW RFTs can be expensive once you go above 18” tires.
Depending on model this protection is various from $1200 to $1500. I rate this product as MAYBE because you can only get your money’s worth if you start bending those wheels. I will discuss below the cost effective way to get tire insurance coverage post-delivery of your vehicle.
Since I am a big fan of Michelin tires and I don’t have a choice of what goes on the car as OEM product (unless you drive an M3/4/5/6 which comes with Michelin Pilot Super Sports from factory) My recommendation to get tire insurance cover is to buy a new set of tires from TireRack.com and get the free 2 year road hazard protection. I will use a 2014 BMW 328i with 225/50R17 as an example with cost break down. The overall cost of getting a new RFT with road hazard coverage nets only $300 or less. Also this gives you option of going non-RFT like Michelin Pilot Super Sports and improve your car’s handling save the OEM tires for lease return. I am a proponent of enjoying your car on day 1 instead of waiting for the OEM to wear out first.
| Item | Cost |
| Michelin MXM4 ZP (approved RFT by BMW) | $ 700.00 |
| Installation by ASAP Tire | $ 100.00 |
| Sell your Factory OEM tires | $ (500.00) |
| Net | $ 300.00 |
GAP (Guaranteed Auto Protection):
If you are leasing most luxury the car the acquisition fee includes GAP coverage provided you have sufficient insurance coverage on your vehicle. (Be sure to read the fine print in the back)
Other captive financier like Toyota Financial Services does not include GAP on their leases, so it’s best to check with your auto insurance company if they offer GAP which you’ll find it much cheaper than buying it from the leasing company.
You’ll need this if you are financing the whole car and your insurance policy does not have replacement car coverage. Shop between your insurance company and your lender.
Pre-paid Maintenance:
BMW leases include pre-paid maintenance but only to the first owner. If you were to transfer the lease to someone else then the free service does not travel to the new leasee. For other manufacturers’ program, get a rough idea estimate on the service cost if you pay out of pocket and see if it’s worth buying it up front.
There’s no point of doing pre-paid if you need to finance it at high rate of interest. I generally keep my cars for less than 36 months so I personally never buy it.
Extended Warranty: (too many options)
If you plan on keeping the car for long haul like 7 years or longer, then I highly recommend the extended bumper to bumper level coverage. Newer luxury cars have complex highly stressed engines due to new downsizing turbocharged engines so problems will service after factory warranty is over. Direct injection turbo cars will have nasty carbon build up to deal with and new fancy multi-gear transmission have “life time fluid” inside. (yes good for the life of the transmission) Also if your car is parked outside and baked under the sun most of the time then don’t expect your complex navigation system to survive for many years. (Imagine you leave your notebook computer under your seat for 5 years and subject it to the daily change in temperature).
Caution Flag: There are many underwriters on these extended warranty policy some are branded by the factory or other insurance companies so be mindful on the details on the program.
Pay attention on these things:
- Deductible
- Where you can get it repaired: Any dealer or designated locations
- Who will be responsible for filing claims dealer or yourself
- Check the exclusion clause!
This is not intended to be a comprehensive list of all F&I products but common ones that I get called and asked for. Email me if you have other ones and I can look into it and add more.
References:
BMW Ultimate Protection Programs
http://www.bmwusa.com/standard/conte…
TireRack.com – http://www.tirerack.com/
ZipTire (a mobile tire installer company) – https://www.ziptire.net