Are Extended Car Warranties a Scam?

Leave a Comment - 17


Robert kloss

Subject: Auto Plus Service agreement

My Wife and and I bought an auto plus service agreement when we purchased our new Toyota Corolla. We purchased the agreement through Our Canadian Toyota dealer. At the time of sale we were told that we had to have the vehicle inspected every 24 months and that as long as we had the car serviced at a Toyota dealer, they would notify us of the schedule, About 30 months later we tried to have the cloth seats repaired and were told that we could not because we failed to have the 24 month inspection. We did however have every oil change done through Toyota and were never reminded of the schedule.

Toco warranty

Subject: Extended Car Warranty

We should gain knowledge before buying an extended warranty. Toco warranty recommends that while buying a new-car extended warranties are usually a bad deal. Beware of auto extended warranties with no affiliation with the manufacturer.


Subject: Endurance Warranty

Before you buy anyting from Endurance, please read the review below. I bought the 3500 top end plan, sold as bumper to bumper, then 5,000 miles later when the engine blew, they denied my claim as normal wear and tear. Normal wear and tear? On a power stroke diesel which has an average engine life of over 350k miles, this truck was 155k when the engine failed. Two mechanics gave me a report of abnormal wear and tear, still they denied the claim with no further recourse on my part. When I complained, they reimbursed me the premium. Typical scam if you look online at their reviews. don't get burned like I did.


Subject: SAme problem

The dealer and I both tried for 5 days to try to make a claim. They would not answer. I had set up automatic withdrawals from my credit card so I called my card and had them block any more withdrawals. Amazing how fast they called me when they could not get there money. I told them to stuff it.

Solomon Wilson

Subject: Warranty Info

Extended Warranties are not a bad thing. Educating yourself and performing due diligence will serve you best in the long run. Being a consumer first, and now a 12 year automotive professional, I have seen a lot. Here are some facts and misconceptions you should be aware of:

A. Buy a warranty in this order:
1. Manufacturer Backed. This is the brands own warranty backed by their name and company. (Honda, GM, Ford, Mercedes, etc).
2. Dealer Represented. Most popular names in the business that I know of are (West Coast): Caregard, CNA National, JM&A, Warranty Solutions, Portfolio (dealer backed). Why these companies? Because the Dealers reputation is on the line, and with review companies like Angies-list, dealers will offer the best solutions to keep there customers protected and their image in the best light. And because these companies are solvent, and are not fly by night companies mass marketing you after your purchase. You will never see these companies send out a mailer, ever! They are only offered through dealer. These companies offer roadside, rental reimbursement, trip interruption reimbursement, fuel delivery, lockout services, All above have A+ ratings with BBB.
3. Insurance Companies - The coverage's are usually good. But, most of the insurance companies offer MI (mechanical breakdown insurance) and are stated component. Meaning, if the part isn't on the covered list, then it is not covered, no exception.
4. Marketed through mailers and phone. I've seen plenty of these companies come and go. Heck, one tried to pitch me and they told me I had to buy a special oil from them to get power-train coverage. I almost choked when I heard that! Look, there are plenty of options mentioned above. If you are considering going this route, ask yourself why? Cost? You usually get what you pay for. You've been warned.

B. Bumper to Bumper means a warranty covers everything. Not True. All of your maintenance items including tires, brakes and rotors, wiper blades, weather stripping and molding, and rubber hoses are considered maintenance items and will not be covered. Also, emissions are almost always not covered or offered at an extra expense due to user error damaging emission systems quite frequently (wrong fuel is the most common). I've seen people put Diesel in a Gas motor and Gas in a Diesel. Hey we all makes mistakes, but if the emission system is damaged because of this, its not covered.

C. Piggy backing off the above, buy warranties in this order of coverage:
1. Exclusionary (most Dealers call this comprehensive). Available from 1 mile to 80k miles. This is the highest tier coverage as possible. This means all parts and repairs are covered, accept what is mentioned in the exclusions list. Do you know most cars have 5k plus components! And most Exclusionary plans exclude coverage to approx 75 - 100 components.
2. Stated Component - These are the lower tier coverage and mostly available on cars with higher miles (80k plus up to 125k). Something is better than nothing, but do know what you are buying. Most range from 1k components covered to 4k components covered including Major Mechanical, electrical, A/C, suspension, etc. Ignorance is no excuse! If you buy one and do not know what it covers, its your fault, not the dealer. Read your contract. You have a 60 day full cancellation period.
3. Power-train - This is the basic level of coverage and only cover the Engine, Transmission, Drive axles, and most components directly related to the vehicle moving forward. No, your Gauges do not count. Technically, the car still drives, you just do not know how fast you are going!!

Hope this helps. Warranties get a bad wrap in general due to lack of education. People either don't use them, buy them incorrectly based on their need, or just plain old don't believe in them. Me, since I've been on the other side, I always have one on my car. I've seen people max our credit cards, have to take a personal loan, let their cars get repossessed, cried in the service drive, begged to try to get it covered, offered to pay off the repair in labor, try to sue the dealer because they were not pushed hard enough to get the warranty (still scratching my head over that one), and countless other examples of what can happen when you don't have one. I've also seen those who do have them, drop off their cars, leave in rentals, thank the dealer for offering them one and showing the benefits of getting one, etc. The average cost is $1,500 - $2,500 or $30 - $50 /mo depending on the level of coverage. Luxury brand owners, add $1000 or an extra $20 a month to those figures. Sorry, if you buy a luxury car make sure you can afford to maintain and repair it.

You be the judge and do what's right by you, and you only.

John M

Subject: CNA is no better. Glossy

CNA is no better. Glossy brochure says interior electronics are covered including radio and navigation and CD player and specifically "factory installed entertainment chassis including radio". Contract has a statement added to that clause which says "coverage limited to these listed parts". So, in-dash radio? Nope. Audi puts the receiver in the trunk. In-dash CD player? Nope. Audi puts that in the glove compartment. Navigation? Nope. There are about 10 components connected by fiber ring to the navigation and entertainment system. If any one fails, you have a blank screen - no radio, no nav, no bluetooth, etc. The Audi Music Interface (for connecting your IPOD and $700) is defective and one of those 10 components. CNA's response? Not a listed item - claim denied. What do they define as chassis? The physical frame that holds the entertainment module in place. Never again.


Subject: Car warrenty

I placed to clams to USCG one for my transmission and and for my engine they were both rejected the reason they gave me for the transmission was I change my fluid to soon I change it at 77.000miles when the book says 50.000 first change they tell me that for hard driving bunch of bullshit than once again the rejected my clam for my engine the ask me for my oil receipt gave them to me one had the wrong milage the shop manager wrote down the wrong milage but correct ed and now they won't honor the service contract they are give me the run around so I fill if I paying for this service it should be honored but its not so what can I do


Subject: Extended warrantee

I purchased an after market extended Warrantee for my Mercedes Benz. Every time the service tech called them they were put on hold for long periods of time or had to phone many times. Sometimes the repairs were covered sometimes not. Sometimes the tech had to fight to get the coverage because of how the covered parts were explained in the Warantee.
Have your mechanic check the documents to see what is and is not covered before you buy.


Subject: Warranty

Hello, we too are looking to purchase an extended warranty for our Mercedes Benz. What was the company you selected? So many to choose from and not sure about coverage for each.


Subject: Extended warranty

I have read many comments but no one seems to deal with how they handled your repair only buying the contract. Those that had repairs put them at a 1 for customers service.
I talked to one place and could get a good deal if I lied about the mileage. I won't do that. Help


Subject: Questionable Extended Warranty Sellers

I am being bombarded daily with telemarketers trying to sell me extended warrant for my car. Somehow they know the year, make and model of my vehicle. I suspect they are getting this information from the DMV. I just wish they would stop calling. This must be a very unregulated industry.


Subject: Extended Warranty Caller

Same here and today a call came from a new a different number. There has got to be a way to get of the Kia Owner List. You can tell one caller to take you off the list but you are only taken off that one not the others. Help!

vito oliveri

Subject: extended warranty

i bought mine right from the dealer and asked all the questions. one being, What IF YOUR DEALERSHIP GOES OUT OF BUSINESS? the oweners wife stated that i can take it to any ASE certified mechanic or dealership.that made me feel better because the dealer that i bought my previous truck went out of business and i started taking it to another gm dealer for service. gm has a ," shake hand" agreement with its customers. just makes me feel good.

Patricia Madaras

Subject: Extended Car Warranty

I just purchased an extanted warranty. I called my credit card to report it as a scam; which I found out after the purchase, to see if they would take off the initial charge and stop accepting the further monthly charges. Because I gave them my credit card info, the credit card could not help me at this time. Even after I told them I looked them up on Google and found out they are a scam. How do I get out of this mess?

Stanford Douglas

Subject: Credit cards

Call your card company and tell the card was lost. Cancel it and have them send you a new one. Call all the companies that you want to have your card and not the warranty company with your new number.

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Hi, i worked in the automoble field for 8 years, I was the CIO of a large 8 location dealer group.


 Frankly, i would be leary of doing business with a company that is still pushing paint protectant or undercoating.  Undercoating is BIG no no as it will actually cause rust.  It traps water between the steel and the undercoating causing corrosion, it plugs up the door and rocker panel drains as well as drain holes in the uni-body frame rails.  The dealers cost for the undercoating is about 250.00 including man hours, it is a huge profit booster and nothing more.  Although Paint Protectant will cause no damage, it does no good.  It is nothing more than an acrylic polymer protectant which can be purchased at an automotive store...cost for the dealer including man hours, 75-100 dollars.  It is nothing more than a profit booster.


 Gap insurance is worth it, if you are involved in a collision and your car is a total loss, the insurance company generally pays you the trade value for the car.  Gap insurance will pay the difference between what the insurance pays you and how much you owe on the car.  for instance, if the insurance company pays you 2k dollars and you owe 3k, the gap insurance will pay the difference of 1k.  However, if you are finanacing 75 percent of the vehicle cost, then gap is not needed.


  Here is my best advice, pay for the car and not a single additional item.  Pay no more than 10 percent over cost, ask to see the dealer invoice, add 10 percent and pay that price.  Gap insurance can be purchased through the finance company after the purchase.


 So, if the invoice states the car cost the dealer 20k, you offer 22k and not a dime more as that is a fair profit for the dealer.  Puschase no other add ons, none.  If they wont show you the invoice, there are plenty of honest dealers that will.  I would be very careful with this dealer.


 Dealers also make money on financing.  for instance, they submit your loan for approval, the bank comes back and approves the loan at 6 percent interest.  The dealer will add 2 or 3 points charging 8-9 percent interest and the dealer gets the money for the points at the time of sale. Ask them how may points they are adding to the bank rate.


 I summary, be careful.  dont fall in love as there are many dealers with the same car.  Offer 10 percent over the dealer invoice and purchase nothing else.  if the dealer gets defensive, fails to show you the invoice, or pulls other sneaky tactics...WALK.  go to another dealer.


 I strongly recommend visiting visit to find the dealer cost for your car as well as many other informative car buying tips.




If it is the original timing belt, then yes - check your owners manual for the recommended changing frequency, but from a quick web search (not knowing your exact engine model) it looks like 60,000 recommended internal, and typically last 80-100,000 miles to failure if not changed.

The most frequent comment (and a red note items on manufacturer's website) is that you probably have a "zero-clearance" engine, an idiotic design that means if the valves are not fully closed when the piston come to the top, it hits the valves and breaks or bends them or punches a hole in the top of the piston. Talk about planned obsolescence !

In short, if that is the case and your belt breaks or gets so loose it strips the "teth" off it or slips, your valve timing will be off, and could cause catastrophic engine damage that would require a complete engine overhaul or replacement !

Unfortunately, after looking at a video on how to change the belt, they build it so almost all the auxiliary equipment has to be taken off to change the belt - the alternator, water pump, radiator upper hose, power steering pump, air conditioner, etc - so rough cost is $800-1200 ! If you are getting it changed, it is also recommended to replace the water pump while it is off.

Hopefully some Montero mechanic will hop on this question and expand on this, but NO engine belt of any type should be trusted to go 115K miles.

A great deal depends on the use of the vehicle.  If you do a lot of mountain driving or heave towing, then a flush would be necessary.  Under normal driving conditions, a flush is NOT necessary at 46K miles.  The shops make money on flushes, that's why they recommend them.  Most transmissions are good for 100,000 miles before requiring maintenance.  Your owners manual should say.....if not then leave it alone.  Maintenance is debated between a flush and a fluid drain and fill.  Both have merits and down sides.  Alternative Car Care is not a fan of flushes and will not do them.  We would rather drain the fluid and change the filter.

Assuming automatic transmission:

At a quick lube type place, with unknown brand of fluid - from about $30-60 depending if done as part of a general fluid change package or all by itself. If transmission fluid filters need replacing too (usually are changed with fluid change on an automatic transmission), more like $75-125 range.

At dealer, using OEM parts and fluid, about twice to triple that. Normal auto repair shop about halfway in between those two. One reason for higher price is they will not (if reputable) extract the old fluid through the dipstick tube and put in new - they will remove the pan or maintenance panel (which commonly has to be done fgor filter replacements) and clean the pan at a minimum regardless.

This assumes you do not need band or continuously variable shift friction surface replacement or adjustment, which can crank it up from $50-100 for band adjustment to several hundreds more for replacements.

Do NOT let some shop convince you to pay for a transmission flush - not only is it unnecessary, but usually uses contaminated fluid from other cars or harmful chemicals (sometimes even tap water or diesel fluid) and can seriously damage your transmission. If your transmission filters were not doing their job or you smoked your transmission fluid, the proper cure (assuming not bad enough to require transmission overhaul) is to change to new fluid and filters, then replace them again in a short time - typcially 50-250 miles recommended by manufacturers, to let the new fluid pick up the dirt and sludge and transport to the filters for cleaning.

IF manual transmission - from about $40-75 for one with drain pan and no filters, to as much as $200 range for one with filters that requires removing side panel to change filter and clean it out. Again, higher end at dealers.

My recommendation - ALWAYS require OEM fluids be used for all but engine oil - mixing brands and additives in equipment is just not a good idea, as they can react with each other and cause serious degradation of the lubricating properties, and even cause gel or sludge in the fluid. A transmission, transfer case, differential, etc should be able to run at least several hundred thousand miles without maintenance if you change the fluid as recommended and use only the same OEM fluids in it. The small amount you will save using cheap fluids is not worth the mega bucks to repair or replace a damaged unit. If you go to an auto shop, find out your required refill quantities and buy the fluids at the dealer and tell them to refill with those - just be sure to get enough to allow for a bit of spillage.