Friday, October 10, 2008

Kay Robinson: BBB Report

Posted on
Sunday, March 23, 2008
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Do Not Fall For Pricey Vehicle Warranty Offers
Every week, like clockwork, a postcard arrived in the mailbox warning that my car's warranty was about to expire. If I didn't drop everything and buy an extended warranty within 72-hours I would be in serious trouble. The card looked official. It had a picture of my car, the date I bought the vehicle and looked like it was being sent from the auto manufacturer.

Does this sound familiar? Let me continue. When we didn't take the postcard bait, the company started calling our home. Obviously we said no, the car stills runs and I still have $385 in my pocket.

Bottom line, these notices usually aren't from your manufacturer or dealer; they're ads from businesses that want to sell you an optional, pricey plan to cover future repairs.

The extended warranty business is big business and people who sign up for the auto warranty aren't too happy.

The BBB received more than 300 complaints about the auto warranty brokers. Consumers complained the companies failed to provide refunds, distributed misleading advertisements, provided poor customer service, failed to honor terms of the warranty and misrepresented warranty coverage.

When the card arrives in the mail or the phone rings during dinner, remember, there is no rush. Extended auto warranties, or vehicle service contracts, may be unnecessary and very expensive.

Your Better Business Bureau offers some advice:

  • Get it in writing. Don't buy an extended warranty contract until you understand the terms and who is responsible for providing the coverage.

  • Ask, "Who backs the service contract and who will perform or pay for repairs?" Check to be sure you're not limited to a couple of mechanics hidden somewhere in the Midwest.

  • Ask whether you must pay a deductible each time your car is serviced or repaired. Under some contracts, you'll pay one charge per visit for repairs regardless of how many you have. Other contracts charge a deductible for each repair.

  • What, exactly, is covered? The fine print usually protects the extended auto warranty company - not you or your vehicle.

  • You'll want to know how the repairs will be paid. Are shops paid directly or do you have to go through the hassle of reimbursement?

  • Check out the company's reliability report through the Better Business Bureau at www.bbb.org.

    • Kay Robinson is president of the Better Business Bureau of Central East Texas, serving 19 East Texas counties. To contact the BBB in Tyler, call 903-581-5704, and in Longview, call 903-757-3611 or 800-443-0131, or visit the Web site at www.easttexas.bbb.org. The organization can be e-mailed at info@tyler.bbb.org.


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