Extended Warranty Scams Hot?


There have been reports of a recent increase in phone calls and post cards looking and sounding like they are from your dealer or other authority suggesting that your current warranty is about to expire. Follow up and you will find that they are offering a very over priced (even in an overpriced insurance segment) polity that has no connection with any dealer or existing policy.

Suggestion if you want an extended warranty, (I would never recommend one) be especially suspicious of anyone who calls or sends you mail. Take a very close look at the policy and cost and coverage. Contact your states insurance agency to see if they are licensed in your state and if they have a clean history.


Thanks for the Public Service Announcement Joseph.

Even if they are legit…they are a scam.


Nice heads up on this. I received a call last Monday with a bit of variation. My Lincoln has an outstanding recall on it right now which I have not had performed (the cruise control switch problem).
This call was computer generated and the message stated that since this recall was “about to expire soon” and to prevent this and “any future problems” that I should contact them about coverage.
At that point the phone was slammed down and the rest of the message was ignored. You have to wonder how many people would buy into it though.


I received a letter from one of those outfits reminding me that the factory warranty on my 98’ Ford was about to expire and i should sign up for continued coverage. Original factory was for 36/36.DUH!


I also have received calls. How is it the do-not-call list doesn’t apply to these people?


Actually, that was my mistake. I got instantly ticked and slammed the phone down whereas I should have stayed on the line, got some contact info, and filed a complaint with the state AG since I’m on the Do Not Call list.
Now if they could get that list to apply to politicians and non-profits.


i believe the list doesn’t apply because they bought your name (as an existing customer) from the dealer who sold you the car, with an expiring (whenever, how old!) warranty. this shows there was a relationship with you prior (just bought from the dealership) another reason the be disgruntled about dealerships!


From what I understand these warranty companies have NOTHING to do with the Dealer or the manufacturer. These are just scam artists…So there is NO relationship and they are NOT allowed to call you if you are on the Do-Not-Call-List.

I’d like them to call me because I’ll get the information from them. Then file a lawsuit. Each time they call it’s a $10,000 fine paid to ME.


There is a difference between scam artists who sell something with no value and the type of product represented by Extended Warranties. These products offer some value at very inflated prices. The big risk with Extended Warranties is mainly that these companies go out of business before you need them. And when you have a claim it may be difficult to get paid.

In consumer durables, like appliances and electronics, the margins are enormous, and there are few claims. In an other post, I wrote of having kept track of 11 household items, and the total repair costs during the period that Extended Warranties would cover (years 2-5), my outlay on repairs was only $106.00. The extended warranty costs, however, had I bought them for all these items, would have been $1150.00!!! So they are extemely poor value for your maoney, but not a scam.

Life insurance is poor value for money; I’ve been paying it for years and I’m still alive. When my wife will finally cash it in 20 years from now it will be worth almost nothing. But is is really protection and peace of mind.

Factory Extended Warranties, as offered by Toyota, are for real, but the chance of something that is covered going wrong on a well-maintained Toyota are very small, and therefore they are normally a waste of money.

There are exceptions; if you are buying a car with unproven technology that might be very expensive to repair, it might make sense, since the problem might surface after the normal warranty expires.

You may have noticed that car companies determined to get more market share and stuck with an unknown or poor reliability reputation often go for very long standard warranties. Examples are Volkswagen, Kia, Hyundai and a few others. This makes good economic sense; the actual repair outlays may be very large, and the customers buy with peace of mind.


There is a difference between scam artists who sell something with no value and the type of product represented by Extended Warranties.

If you read the origional post you’ll see that these ARE scam artists. They have NOTHING to do with the dealer. Just some aftermarket commpany that is trying to sell you a worthless (and very expensive) warranty offered by an unheard of company.


I file every one of them away - in the round file. Is there more to it than this?


Thank you for the comment. I was mainly referring to Extended Warranties in general, and have also had calls from service companies that offered items of dubious value.


Mike is correct of course. I did not buy my car new from a dealer anyway; it was purchased used with no warranty and I’m the second owner.
Besides, a company can’t skate around the No-Call list by buying info. If that were the case my phone line would be clogged yet again with every hack under the sun trying to sell me something.
As to the recall on my car, there is no “Use by date” on Recalls. It’s good for the lifespan of the car no matter who the owner is. There may be a time limit on service campaigns, etc.