Vital Facts about Car Warranty Companies

March 28, 2012

Learn what to look for in the best car warranty companies, and find out the red flags for spotting car warranty company scams.

Car Repair Under Warranty

If you are thinking of purchasing an extended warranty for your new or used vehicle, you definitely want to find and review the most trustworthy car warranty companies. While there are many companies that offer extended warranties, not all of them are the same when it comes to honoring their warranties or providing acceptable customer service.

In fact, there are many fly-by-night car warranty companies that simply take your money and leave you high and dry when it comes time to file a claim for warranty service.

Searching for Car Warranty Companies
In your search, you will find that there are a few names that will appear at the top of the search rankings for car warranty companies. Some of the names that you will see most often are CARCHEX and Warranty Direct. These companies are nationally known and well-respected. Although these are perhaps the largest and most well-known car warranty companies, there are many others and you may want to do an in-depth search and spend some time looking for alternatives.

Ratings and Review Sites
Spend some time reading ratings and review sites that enable users to post opinions and ratings based on their experiences with various car warranty companies. Popular websites like ResellerRatings, Epinions and Bizrate are well known for allowing consumers to post their thoughts about most types of businesses—even car warranty companies.

You should be aware that sometimes companies post positive remarks about their own services. Always search for sites that offer multiple postings about a particular company and try to factor in that both the best and worst ratings may be false or planted to provide misinformation. Consider the opinions and ratings of these websites, but do not allow them to be your only source for making a decision.

Post Questions in Forums
Another great way to find reliable car warranty companies is to post messages in car related forums. Search the Internet for forums that discuss cars and car warranties. On these websites you can post questions about a particular car warranty company.

Car Warranty Company Scams and Schemes

If you have the time and patience, you can sort through the thousands of different warranties offered by various companies. Much of the time, car owners are in a hurry to get the paperwork done and get on the road. Some less than honest companies know how to take advantage of the uninformed. Scams and confusing fine print can cheat you out of what you pay for, so take a look at the most common scams that are going around.

Bogus Renewal Alerts
The most recent scam doing the rounds is calls and post cards asking you to renew your extended car warranty that has expired. Most dealers offer extended warranties or bumper to bumper warranties that last for at least three years after purchase. If you want to buy an extended warranty you can do so and extend the time that your car is protected. But after a certain period of time, renewing your dealer's extended warranty isn't possible. Do not listen to sales people who insist that you buy an extended warranty because the bank requires it. There is no legal basis for this and lenders do not require you to have an extended warranty before they sanction money for a car loan.

Pressure to Purchase
As soon as you buy a new car, a few unscrupulous dealers will try to force you to buy an extended warranty on your new car. They will stress the point that a new car will run through its mileage limit faster and your manufacturer's warranty will expire faster than it should. As a result, getting an extended warranty will save you a lot of money. Unless you do an abnormal amount of driving, this is not so. Remember, you can opt for an additional extended warranty for up to 30 days after the purchase of any new car.

Hidden Bundling
A few dealers will not inform you about the extended warranty but will add the warranty into the cost of the car—especially when buying a used car. As a result, you will be unknowingly paying much more than you expected. Read the fine print carefully before you proceed.

Be as patient as possible while buying your car warranties from dealers. Read the fine print and find out exactly what you are entitled too before you go ahead. It's your money, and you should get full value for it. If the dealer is not taking the time to explain the warranty and what you are entitled too, find another dealer who will.