Nobody wants to be hit with a surprise repair bill for their vehicle, but that doesn’t mean that you should spring for an extended repair warranty for your car. Most of them probably aren’t worth what they cost.
There are some legitimate extended repair warranties guaranteed by the manufacturer. However, vehicle repair warranties are seldom offered directly from the manufacturer. Those that aren’t tend to come with a lot of restrictions and a cost that exceeds their value — if they get used at all. According to Consumer Reports, 55% of the people who buy them never use them (and even fewer say they would buy them again).
Typically, the amount someone would have paid for their vehicle’s repairs without the policy is less than the price of the warranty itself. Consumers would be better off simply throwing the cost of the warranty into their savings account each month instead.
Indeed, many extended warranties are scams. For example, Pennsylvania’s attorney general launched a lawsuit early this year against Delta Auto Protect, a third-party seller of vehicle repair warranties that engaged in games that were clearly designed to make the warranties impossible to use.
Consumers trying to use their warranty received endless transfers when they called, were left on hold or were simply hung up on. If a customer finally left a negative review for the company online, the company might allow payment — but only in exchange for removing the review.
A scam doesn’t have to involve big bucks to be illegal. Plenty of scams operate on a “volume” basis. They trick a lot of people out of a little bit of money at a time — hoping they won’t get caught. If you think that you’re a victim of fraud, find out more about how an attorney can help.
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