There are several interesting observations worth making about some mailings most of us have received at one time or another; they offer extended warranties on our motor vehicles.
And just to put an end to the suspense right away, we’ll urge most people in most cases not to buy.
On to the interesting observations. It’s curious how these offers land in our mailboxes just a few weeks or months before the express warranties on our cars or trucks are due to expire. We’ll leave questions about the timing of such offers to a future article.
Another curious thing is how insistent those offering extended warranties are that we respond within the next few days. The best response, from their viewpoint, is a quick one which includes an initial payment and perhaps the OK to hit up our credit cards monthly for the next couple of years. What’s the hurry, we wonder, since a legitimate offer contains all the features next week as it does today.
All that hurry may be a way to play on our fears of being without coverage, should some major part of our vehicle break down. The offer in our mailbox last week suggested that its “platinum coverage” would deal with just about anything that could go wrong.
Some of these extended warranty plans may do as their promotional materials suggest. However, we’ve heard of many more that promise the world and then deliver on very little.
The truth is, many of these offers are scams that accept any money people send them, then refuse to make payments on any claims that are filed. A common excuse is “normal wear and tear.”
Consumers are often caught in the rush-to-buy pressure, sending payments before seeing the contract that spells out their coverage. Many companies won’t let buyers see their contracts until they’ve forked over their money; when the companies send the contract, many buyers are sadly surprised by the lack of coverage.
The attorney general’s office in Missouri has gone after several such companies (many of which seem to be headquartered in the Show Me state) for misrepresenting offers and deceiving consumers. The AG took aim at contracts that contained a 30- to 90-day, 1,000-mile period during which buyers could not make claims. That same contract included a provision that a full refund will be provided only within the first 30 days.
Some companies in the Missouri example sent buyers an additive with directions to use it in the vehicle right away to make the warranty valid. Only later did those buyers learn that they could not receive a refund because they had used the additive. The Missouri AG called this a “bait-and-switch” scheme by the companies that supplied the additive.
Some websites offering extended warranty coverage are nothing more than “phishing” sites. By dealing with them, you’ll be giving up personal information that could be used in other scams, or even used to access your secure accounts.
Jim McKenna of the Maine Attorney General’s Consumer Division says, “We have always taken to heart that service contracts are very expensive insurance.” If you feel you need such coverage, do careful research and deal only with reputable companies with proven track records. A better option for some may be to set up a savings account just for vehicle repairs; then you can decide what is a “covered repair.”