Auto Extended Warranty Scams

Don’t be fooled by the name “auto extended warranty.” An extended warranty is not actually an extension of the warranty given by your manufacturer. An extended warranty is actually a new service contract you purchase from a company or a car dealer after your warranty expires. If you’re not going to have the car long enough, you shouldn’t buy an extended warranty. If you are, then you need to be aware of possible scams.

First, you need to know if you even need an extended warranty. If you are leasing your car for 36 months, you don’t need an extended auto warranty. If your dealer tries to sell you an extended warranty while you are leasing for a short period of time, it is an obvious scam. You should consider an extended warranty only if you will be in possession of the vehicle for more than three years.

One thing you need to worry about is getting phone calls from telemarketers. If you are on the National Do Not Call list and you receive a call from someone trying to sell you an extended auto warranty, this is clearly illegal and should be reported to the FTC. Scam artists might also ask for personal information, such as your credit card number, bank account number, or Vehicle Identification Number. They do not need any of this information to sell you a warranty, so do not deal with someone who asks for this information.

Something you might think about is to buy your original warranty at the dealership for convenience. Your dealer, however, is a middleman. They often try to resell them at two or three times the amount they bought them. Purchasing an extended warranty online is not only more secure, you could be saving half the amount of buying one from a dealer.

Other situations that are potential scams are financing approval and “buy it now.” Some dealerships claim you need to buy a warranty to be approved for financing, but in reality the two are not related. Some dealers might also say you need to buy an extended warranty immediately after buying the car, and that an extended warranty will never be offered again. While it’s possible purchasing an extended warranty immediately will be cheaper than after your original warranty expires, it is absolute baloney that there is only one time you can purchase it. (It’s also baloney to say you need an extended warranty.) Once again, you should purchase an extended warranty from the actual company rather than the car dealership.

Finally, just like with any business transaction, you need to research to make sure the company is reputable. Don’t do business with a company that fails to show you a copy of the warranty contract. You can also inquire about the business by contacting your state Attorney General or checking the Better Business Bureau for any consumer complaints. Purchasing an extended warranty is something not everyone has to do, so be aware of possible scams before you consider buying one for your car.


Note: Some auto extended warranty reviews can be a starting point when considering the purchase of an extended warranty. Otherwise, you could find yourself with a worthless policy from one of these scams.

Latest posts by David Pilley (see all)
(Visited 77 times, 1 visits today)