Friday, May 11, 2018

Yet Another Oil Service

While I had planned to do an oil service last fall before I put the car to bed for the winter, I was forced to keep the E46 in service well into December while the E36 spent some time at the body shop. By the time the E36 returned to service I was so busy doing other stuff I just forgot to complete the oil service.

Fast forward to last month. I finally managed to swap out the old for some fresh BMW 5W-30 synthetic in the dark blue bottles, which is reportedly equivalent to Pennzoil Platinum Euro 5W-40. While the oil was clearly opaque once in the drain pan it was once again found to be translucent as it drained. Considering the last oil service was nearly a year ago at 20860 miles and I drove the E46 more than usual while the E36 was out of commission for the three month driveline overhaul I judged the oil to be in remarkably good shape for its age.

Migration to Classic Car Insurance

One of the perks of aircraft ownership is the fact that the insurance industry generally provides an outstanding product for a reasonable price. Sure, they tend to bend over owners who choose to buy aircraft beyond their experience level but once the owners gain a certain degree of time in type the cost of insurance drops dramatically to a level far below that of automobile insurance. All the while the aircraft is insured for a value specified by the aircraft owner. If the aircraft is damaged the owner gets a check for the insured amount OR enough to repair the aircraft, whichever is lower.

Automobile owners, however, have been getting bent over by the insurance industry for decades. Insurance costs are ridiculously high now, even for people with good driving records like me, and are continuing to climb as cars become needlessly more complex and hence more costly to repair thanks to the self-righteous nannies at the DOT, NHTSA and EPA. On top of all of this, the automotive insurance industry refuses to provide stated value insurance for daily drivers, so daily driving an older vehicle like my E36 or E46 comes with the risk of a complete loss should some mental midget run into it while texting eggplants to his latest Tinder conquest.

Despite paying big money to insure the E46 in New Jersey with full collision coverage, the reality is this insurance has been pretty much worthless for the last 4-6 years because of the vehicle's low book value relative to its true market value. If the vehicle was involved in a collision the insurance company would likely total it without a second glance and hand me a check for a few grand -- if I was lucky. I've long known that classic car insurance (effectively stated value insurance for automobiles) was the answer to this problem, but I could not accept all of the associated restrictions...that is, until now.

I first contacted my local insurance broker to work with Hagerty to quote the vehicle (as well as my E36 for future reference) but I received an email stating that while Hagerty would quote the E36 due to age and my investment in the vehicle they would not quote the E46 because "they are more selective with modern vehicles and usually require that the vehicle is rare in some way like the M3". Knowing full well ZHPs are significantly more rare than the M3 and the fact that E46 M3s are anything BUT rare, I flinched, mumbled a few obscenities, and then reached for my phone so I could call Hagerty directly.

A pleasant woman answered the phone. She pulled up the request submitted by my broker and we discussed the vehicle and my eventual plan to put the E36 into a storage facility, buy a new daily driver, and put the E36 on the policy along with my E46, but I emphasized I did not want that to be a contingency of the quote on the E46. When she asked me to clarify if the E46 was modified in any way I gave her an emphatic "no". Obviously fishing for the probability that I would need to use the E46 as a backup vehicle she asked "Would you consider your daily driver -- the 98 BMW -- reliable?" I quickly responded "I just wrapped up a very expensive ground-up restoration including an engine rebuild. It better be reliable". I then educated her about the ZHP package, pointed out that there is a following for these cars including an online forum dedicated to the type, and mentioned that my dealer told me they had sold fewer than 100 of these vehicles in the three years they were available. Based on our discussion she overrode the prior determination and decided to approve the quote request and submit the vehicle to underwriting pending delivery of some pictures.

A couple days later I received word from my broker that they successfully transferred the vehicle to the new Hagerty policy. I won't reveal the amount for which I insured the vehicle, but rest assured it is a number that balances the cost of the policy with the value it provides. I'm not saving a lot by going with Hagerty (the policy is only about $150 cheaper for the year) but the coverage is so much better it's really not a fair comparison. The Hagerty policy is BY FAR the better value because it will actually pay me for the true value of the vehicle should it be damaged beyond economical repair. It also includes a recovery / towing service -- something my standard policy does not cover except in the event of an accident. There is, however, no free lunch. Hagerty places a few restrictions on the vehicle, all of which are inconsequential to me at this point:

• I can't drive the vehicle as a daily driver or use it as a backup vehicle to my daily driver anymore. That's fine because I'm done working on the E36 in any significant way.

• I have to keep it in a locked garage. In other words, I have to continue doing what I've done since it was new.

• I have to keep usage under roughly 8000 miles a year. I've averaged 1/4 of that for the last 12 years and have no desire to put more than that on it from now on.

While Hagerty does not require recurring odometer readings I did declare the mileage at policy inception so it won't take a degree in math to figure out, should I submit a claim at some point, exactly how much I've been driving it.

The upside to the Hagerty policy, as opposed to some other classic vehicle policies, is that they do not limit the use of the vehicle to exhibitions only. I can drive the vehicle pretty much anywhere I want, though the rep did say they would not look favorably on driving the vehicle cross-country if the destination was not a car show or equivalent event, because that does not fit their standard of a "limited use pleasure or collector car". If in doubt, she suggested, I should contact them to make sure the trip would not impact coverage. Fair enough.

On a side note, my brother has almost his entire car collection covered by Hagerty as well, though somewhat strangely they would not insure his mint condition E39 because "it's a sedan". That seemed a rather odd differentiator so I told the Hagerty rep that story and asked for clarification. She said that underwriting has noted significantly higher claims on these vehicles because people are still using them as daily drivers or at least driving them more regularly than they probably should. I suppose that is the best testament to the quality of these last great BMWs. Unfortunately, this means that if you want to have Hagerty cover your E39 you're out of luck -- at least until these vehicles get a bit older.

Mileage 24000