Auto Loan 101s
 STORY HIGHLIGHTS
  • Consumers should be aware of purchasing extended car warranties from third-party companies
  • Policies usually won't cover your car's problem and the company already has your money
  • Experts suggest you shouldn't buy one of these warranties at all
Extended Car Warranties Not Worth the Money
By Liz Opsitnik
Monday, Apr 27 2009 14:52

While we, as consumers, know we should do our homework before making any major purchase, sometimes we slack a little.

CNBC has a consumer alert/buyer beware story about extended auto warranties on its site, informing consumers that these warranties may be a rip-off and may not cover what they say they will cover.
NBC News investigated US Fidelis, a company that offers third-party extended car warranties, and found that this company is misleading its customers, leading them to believe US Fidelis is associated with the manufacturer. The investigation also found that more than 1,100 customers have filed a formal complaint with the BBB for things like not covering a repair that it said it would cover, leaving the driver on the hook for the repair bill.
In the video below, NBC News interviews US Fidelis’ CEO, who says the company is honest, and former employees, who claim they were trained to lie to customers to sell the warranties.
Experts say that the only time you should purchase one of these third-party extended warranties is if your car is past the manufacturer’s warranty, unreliable and expensive to repair. And if you do decide to buy one, the experts say to read all the fine print, because they usually only cover your car’s moving parts (i.e. engine or transmission parts), not things like air conditioning or electronic problems.
Click the video below to see the entire clip, which gives consumers good tips on things to look for when considering whether or not to purchase an extended warranty.

Comments

Harry Brent
As usual, our wonderful TV news investigations show a bad company and encompass all businesses of like kind to be the same. This investigation AND a RECOMMENDATION of do not purchase a third party extended warranty is just more of the one sided "crap" TV is noted for. Pure sensationalism. Yes, there are dishonest and misleading warranty companies on the market. There are also many good and honest warranty companies that save vehicle owners a lot of money. I know because I purchased a used vehicle, with no warranty, and also purchased an extended warranty. The warranty company has paid out over 00 on my behalf. So I say, open your eyes before you purchase a warranty. Ask a repair shop or three which warranty company they have received payments from. It's a good sign if the repair shop has been paid properly that the company is good. If not, don't buy that warranty and keep looking. If the dealer that sold you the vehicle doesn't work on them, be careful. If the dealer does work on them, ask the service department how good is the company. Again, do some homework but don't consider all of one kind the same as one individual. What if the TV news
did an investigation and found a certain business to be good and honest. Now ALL in this kind of business are good and honest? Yeah, right. Just USE YOUR HEAD!.
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J. Dill
If thats true ! who was it and show us proof .
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Rob Van
wow let's label every warranty company together. I believe that US Fedelis is a rip off but what about manufactures extended warranties, so your saying that I should pass on the Toyota or Honda manufacture warranty ok I will and then if something happens i need your address so I can send you the bill. "Extended Car Warranties Not Worth the Money" your exact caption so if you want to really educate then differentiate.
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k cosme
wow, guys. what the hell were you reading? the bottom line i read was just don't buy an extended warranty unless intact warranty is about to expire and just don't buy extended warranties from car sellers. easy peasy. harry, you did just that, so why the gripe?
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Alex P
Harry in your first sentence you are sarcastic about TV investigations, Yet not so long after you admit there are dishonest and misleading warranty companies out there. That MSNBC piece was primarily about US Fidelis, and it sure as hell is pretty evident to me that they use deceptive and dishonest tactics to lure people into buying a worthless product. So park your sarcasm, it wasn't warranted if you will pardon the pun. So far we have received two calls at my business premises from someone claiming our car warranties are about to run out. One was for me, the other for an employee who doesnt' own a car, and never has! Obvious cold calls fishing for saps. As was said in the video, "if they call you" it's a red flag.". Tell them to piss off and never call again. I did.
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Rod
Any type of "Insurance", which is what extended warranties are, MUST be a loss for most of the consumers paying the policies. It is gambling on the odd and the "house" (company) always wins. Get smart, save your extended warranty payments in your own account and pay your own repair bills. The is the only way consumer will "win".
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Delores Blagmon
I brought a warranty from where I got my 2002 ford explorer three months ago I started having trouble with the car .I called the warranty company they told me to take it to a shop and let them put it on the machine to see what was wrong with the car , the motor mound is cracked ,so that is part of the engine covered in the warranty they told the people at the shop where I took it to do a tear down of the engine now they do not want to pay for the repair . I went on line to Wynn warranty rip off and rip off,com and so many people all over the country have TROUBLE with this company paying for repairs I will be calling the attorney general in my city.
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