August 14, 2013 - by
In the world of automobile protection, the landscape is vast and the danger of meeting with deception along the way is not only possible but probable. With countless thousands of companies offering warranties, both online and off, it can be nerve-racking to wade through the endless list of potential providers without a little guidance from someone with an inside track into the industry.
Sales reps from car dealerships and third-party insurance brokers selling extended warranties work on commission and, to them, the more you spend on obtaining a policy and the quicker you make your decision to buy is all in their favor. They know if your decision is to “think about it” then they’ve probably lost the deal. Because of this, many are not shy about saying what they think they need to say to close the sale right now, even if that means saying things that may be totally untrue.
Unfortunately, this is an industry where buyer confusion is common and many consumers end up with less than they thought they were getting. They may not find out until they’re down the road (literally) and they need to use the coverage and it’s not what they expected.
What are the most common lies?
Following are some of the more blatant yet common lines you’re likely to hear from dealers and sales people willing to stretch the truth (or tell outright lies) to sell you their particular vehicle service contracts, also known as extended auto warranty products.
- The best place to buy a service contract is from the dealership. This may have been true 20 years ago, or before the Internet, but today it’s absolutely false. Besides being expensive, since dealerships merely tack on additional commission charges to coverage you can buy directly from the provider, dealership warranties often restrict your ability to have your vehicle repaired at the facility of your choice. Dealerships are third-party resellers of seand will always charge more for a policy than it costs when purchased directly from the provider for whom they are acting as the “middle man.”
- A dealership representative may tell you that the only time your car will qualify for an extended warranty is when it’s being purchased. Not true. These policies can be purchased any time, often when a vehicle has as many as 100,000 miles on the odometer. Service contracts are also available after original manufacturer’s coverage has expired, although this will generally cost more than if you had taken the coverage while the original coverage was in force.
- Dealerships may also try to convince you that, by taking their service contract offering at the time of your vehicle purchase, it will help you qualify for or save money on vehicle financing. Also not true. Financing qualification is determined by vehicle price, amount of down-payment (or trade-in) and your credit score. If a sales rep says s/he can get you a better interest rate if you add on extended coverage, realize that a more attractive interest rate is in no way related to your purchasing add-ons such as a vehicle service contract.
- If you’re told that the vehicle you’re purchasing automatically comes with extended coverage understand that this add-on coverage has already been factored in and will increase the vehicle’s sales price.
These falsehoods used to sell automobile warranties should be a strong indication of the veracity of the company with whom you’re dealing. Our goal is to provide you with trustworthy advice on who the best companies are and to connect you with the handful of top-rated providers in the industry. You don’t have to settle for less. If you are planning on purchasing your service contract online please read these tips about how to find the best coverage for your automobile.