Yes, don’t believe it! That Nigerian Prince isn’t worth a rubber nickel slug, nor is he probably a Prince – But robo-call warranties are probably not a whole lot more honest either!
Recently, I received a call from a computerized voice trying to sell me a extended service plan for my late model Lexus, or in fact, any other car I may own over 100,000 miles or over five years old.
I was intrigued, so I listened intently and took notes. The service plan would have cost me over $3,000.00 for my Lexus, but it supposedly covered my vehicle from “bumper to bumper”. Having some experience with vehicle warranties I decided to give the “caller” my information so they could mail out the particulars.
When I received the details it revealed coverage so full of loopholes it would have been nearly impossible to get a single item covered. It made me angry for the industry that suffers from so many horror stories where these charlatans, disguised as insurance companies offer to sell you “coverage”. It’s almost laughable that what they do is even legal, but it falls under the scope of “let the buyer beware”. Unfortunately, far too many consumers fall prey to these rats.
Look, if you have a late model car that is getting “mature” there may be no easy answer besides socking a few extra bucks away each month to cover the unexpected, but here is some basic rules in buying an extended service plan:
Only buy a manufacturer’s warranty when possible. Companies like Ford, Toyota and Chrysler offer a series of long term warranties, but don’t expect them to exceed 100,000 miles – Most will only extend the vehicle’s odometer an additional 50,000 and you’ll pay for it. The manufacturer’s most common extended warranty is just a one year/12,000 mile plan that will give you piece of mind when driving that used car off the lot.
Secondly, there are good third party warranties out there, like Wynn’s and National Road Ready, that allow service throughout the U.S and Canada at any ASE certified shop – but if you are getting a Robo-calls during dinner hour, or opening up your mailbox to “great deals” they probably belong in a circular file.
Third party warranties I would look into would be ones that assume a low deductible and are represented by used car dealerships that have been in business long term. Keep in mind, when a car they sell breaks down on them – the bad “word of mouth” of an angry customer can spread like wild-fire. This is something all small business people would like to avoid, but in the car business, it is sometimes completely unforeseeable.
That is why reputable car dealerships will swear by their third party warranty companies – they not only insure happy customers (when the worst happens), they turn what might otherwise be negative “word of mouth” into a positive, when that customer is not only still bragging about the car they bought from “X-dealership” but the wonderful warranty they sold them as well.
It just makes good business sense.