Beware of Auto Warranty Scams

Extended Warranty programs have always been highly scrutinized programs and many consumer advocates believe they are rarely worth purchasing. Most of the time the companies who will be contacting you by phone, postal mail, or email will be pushy salesmen who will feed your fears to get you to purchase one of their overpriced restrictive warranty. These warranties can often be 80% more than your dealership warranties and will usually cover less. The letters and emails these companies send out look like important notices from your auto dealership, and may even suggest they are in partnership with legitimate companies. We suggest you take your time making your decision, most legitimate companies (usually from the dealership you purchased your vehicle)  will give you six months to a year to purchase an extended warranty, with that time decide if your vehicle is at high risk (excessive problems within the first few months, or lots of electronic extras). Here are a few things that may help you spot these sketchy programs:

  1. Pushy phone calls at odd times of the day (usually at night).
  2. Companies who wont let you see your service agreement without a down payment.
  3. Warranty renewals well before your expiration dates.
  4. Does not offer a 30 or 60 day money back guarantee.
  5. Demands you make a decision that very moment.

Most the time your best bet on extended warranties will be directly from your dealership or from the Auto manufacturing companies. Also you can get quotes from this BBB approved site (doesn’t always mean its safe) If you have already been the victim of one of these companies you can report the company at the Fedaral Trade Commision. Here are a couple of other articles you may find helpful at and MSNBC.