It has been just one year since you became the proud owner of a shiny, new Ford Focus. Although you don’t visit the car wash and inspect for microscopic dents as often as you used to, that car is still your most prized possession. Today, you received an automated phone call, seemingly coming from your car dealer or manufacturer, that the warranty on your car was about to expire. The recording indicates you should act quickly by calling the toll-free number provided in order to find out more information.
Like most people, you would think about the countless potential problems your car might have in the future, and the fact that you can’t afford to be without a vehicle for very long. You would probably appreciate the heads up, and you would never consider that you might be misled by the call. Likely you will call as instructed, and once you do, you may be bombarded by unscrupulous sales tactics leading you to believe you’d better take advantage of the offer.
Unfortunately, many of these cunningly crafted notices are from companies totally unrelated to your car dealer or manufacturer. Often times, they are simply trying to sell you an extended warranty that you may not even need. Even worse, once you contact the number provided, the company may ask you to share your personal information, including your credit card number. Sadly, an alarming number of these companies will con people out of their money instead of giving them beneficial coverage.
It’s important that you know whether or not you currently have an extended warranty. If you are leasing your car for a short period of time, you don’t need an extended auto warranty. In fact, you shouldn’t consider an extended warranty unless you will have the car for more than three years.
Often times the term “extended warranty” is used to refer to coverage that’s offered as protection after your original warranty ends. However, the offered coverage is not actually a warranty at all. While a warranty comes with a new car and is included in the original price, a motor vehicle service contract provides coverage for parts and services not covered during your warranty’s duration as well as when your warranty ends. So, it is actually a new service contract you purchase from a company or a car dealer. Motor vehicle service contracts can be, but are not always, beneficial to both new and used car owners.
While approximately thirty-seven states have enacted specific laws governing motor vehicle service contracts, your state may be holding out, and as more and more of us are becoming service industry workers, regulation of the service contract industry has become more important than ever. Even in those states that have protections in place for consumers doing business in the service contract industry, there may be exemptions from certain requirements. So, it’s important to do your research before you enter into a service contract.
How can you Protect Yourself?
A little bit of investigating can go a very long way. You should know that while auto service contracts may be sold by your dealership, vehicle manufacturers and independent providers may also sell them. If you do decide that you need to enter into a service contract, know what’s covered and what’s excluded under the contract, since coverage varies widely. That way, you won’t end up like the countless consumers who’ve purchased a service contract, filed it away, and much later discovered that a required service was not covered due to a long list of exclusions.
Also, you should find out more information about the business you’re thinking about purchasing a motor vehicle service contract from. You can do this by contacting your state Attorney General and checking Scambook for the latest consumer complaints. If you see something fishy, file a complaint with the Federal Trade Commission at https://www.ftccomplaintassistant.gov so that they can stay on top of any patterns of possible law violations. Specifically, if you receive a call peddling an extended warranty on your cell phone, and the call is pre-recorded or placed using an autodialer, it may violate the FCC’s rules, unless you previously gave your consent to be contacted.
And, as always, check with Scambook.com first to see if other consumers have posted simliar complaints.