OK I can hear it already - that's because BMWs are unreliable. Or could it be because BMW have confidence in their reliability?
The answer is neither
It’s all down to a combination of how much of the purchase price of the product the manufacturer is prepared to allocate to future warranty claims, how much of the costs of those claims can be met by the suppliers of the faulty components and how much benefit the extended warranty will give in supporting sales and residual values of the product. Naturally, the sales person will always say that “it’s down to the confidence that the manufacturer has in its product”.
Of course, it’s always helpful that any costs associated with a longer warranty are being pushed forward into the distant future; it’s like the manufacturer taking out an interest free loan on every bike sold.
There’s no right answer here; in the car world, it’s certainly helped Kia, the purveyors of economy Korean 💩 boxes, leave that market far behind and move up to the big league.
