North Carolina Department of Justiceskip to main content
North Carolina Department of Justice
North Carolina Department of Justice
Submit this request

Extended Car Warranties

Car owners sometimes receive phone calls or post cards in the mail warning that their vehicle’s warranty is about to expire and needs to be extended immediately. These urgent messages are designed to look and sound like they are coming from your car dealer, the company that made your car, or another official source. Radio and television ads are also used to market extended warranties. Consumers should think twice before acting on these offers.
  • Companies that pitch extended warranties often use misleading and manipulative sales tactics. For example, the mailer you receive may be labeled “2nd Attempt” to make you think that a previous mailing was lost. Mailers also claim that the offer is “Time Sensitive,” to try to trick you into calling their toll-free number immediately.

  • Costs are high, and so is the pressure to buy. If you call, you’ll get a high-pressure sales pitch for what’s called an extended warranty but is actually a service contract. These contracts often cost hundreds or even thousands of dollars.

  • The companies rarely pay claims. The contracts usually contain fine print that allows them to deny most claims. For example the company may insist that your repair is only necessary due to normal wear and tear, which isn’t covered. Claims may also be denied if you can’t prove to the company’s satisfaction that your vehicle has been maintained according to the manufacturer’s recommendations.

  • Mechanics may decline to honor the warranty. Even if your claim is approved, you may be unable to locate a local repair shop that is willing to deal with the warranty company. Mechanics sometimes turn away customers who hold these warranties because of the time and hassle involved in getting authorization to do the work.

  • Refunds are delayed, or reduced by bogus “fees.” When consumers sign up and then cancel, the companies make excuses about why the promised refund checks are delayed.  Even if the consumer receives a refund, the company will often take out a “cancellation processing fee.”

  • These companies are frequently in trouble with the law. Because of their questionable business practices. Attorney General Cooper has taken a number of these companies to court, to prevent them from harming North Carolina consumers. Many of the companies are based in Missouri, and the St. Louis Better Business Bureau has issued a report that is highly critical of the industry.
 
We can help
If you're interested in purchasing a service contract for your car, check with a reputable car dealer for recommendations on service contract companies. Then check out the company with our office by calling toll-free in North Carolina 1-877-5-NO- SCAM. You can also file a complaint with our office if you are experiencing difficulties with an extended warranty you purchased.