Can You Really Trust Your Car Warranty Company?
Did you know the Extended Auto Warranty on your car really isn’t a warranty at all?
A real auto warranty is a guarantee given to the purchaser by the manufacturer of the car. It states that the car is reliable and free from known defects and that the seller will repair or replace defective parts under certain conditions. These repairs or replacements are usually at no cost to the buyer and the Guarantee itself is often included in the purchase price.
What i a Service Agreement?
An extended warranty always costs extra and is really just a Service Agreement. Service Agreements cover repairs and/or maintenance on a car after the Manufacturer’s Warranty expires. It guarantees nothing. It’s called a Third-Party Warranty because they’re sold by middle men with no skin in the game at all.
Most of these third-party providers are scam artists, engaging in deceptive, high-pressure sales practices. Promises of Bumper-to-Bumper coverage vanish into thin air as soon as the customer tries to use the warranty. These companies often give you the run-around to keep from covering a needed part. Often the dealer who sold the car controls the so-called warranty and which repair shops the covered car can be taken too. These mechanics will often install cheap or inferior parts at the direction of the dealer.
Many Warranty companies go out of business after a short time and leave their customers without coverage, costing them hundreds of dollars. USA.gov recently released consumer protection alerts advising buyers to be wary of these types of providers. You can see them here.
How to Check Your Warranty Company
It should be said that there are some reputable Third-Party Extended Warranty providers, but not many. Buyers should check the Service Contract Industry Council (SCIC) membership page and the Better Business Bureau for complaints against the company they’re thinking of using.
How to Get Around The Extended Auto Warranty
So, if your hoopty isn’t covered by a manufacturer’s warranty and you don’t want to roll the dice with a third-party provider, what are your options? Why not lose the middle man and create an auto services agreement that covers your car repair and scheduled maintenance, saves you money, and is under your control?
We’ll discuss how in Part 2.
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