Insurance
To extend or not?
Extended car warranty scams are becoming an ever increasing problem. Companies that offer these plans have embarked on a tricky practice in order to get car buyers to purchase their product. One strategy they are using is pressure. If you should receive a call from someone claiming that your existing car warranty is about to expire and you never purchased one to begin with, be wary. They may pressure you into thinking that if you do not sign up that your automobile will never be repaired again.
Claims to the Better Business Bureau regarding these scams have been on the rise. While there may be some acceptable auto warranties available, usually those following a solicitation by mail or over the phone are suspect.
Ask to read any paperwork that outlines the terms of the warranty. If they are a scammer chances are they will be unwilling to send you that paperwork. Some plans cost as much as $700 per year which is a hefty sum for limited coverage. Terms like 'full coverage' should also be investigated to see exactly what is covered.
The Federal Trade Commission also states that an extended warranty is not actually a warranty at all, but instead is a service contract. The actual warranty will be included in the price of the car. Paying additional fees for coverage makes it a service agreement. Do not let this language fool you.
Ideally, an extended warranty should be purchased when it makes sense. If the car is a used car and will be prone to expensive repairs AND the extended warranty will cover such repairs, then it might be a good idea to consider. Otherwise, the land of extended warranties can be a deceptive place so be careful when deciding to purchase one.
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