Having a warranty on your vehicle is something that can save you thousands of dollars if you were to ever get in an accident, but not all of them are all they are cracked up to be.
If you’ve been in the market for a new vehicle you probably have been weighing the options of financing or leasing a new car, or getting a cheaper used car on credit. Many times, buyers will opt for a new car strictly because of the warranty they come with, but what they may not know is that some used cars come with a warranty also. If you are shopping at a dealership that offers certified pre-owned cars, they most likely will come with a dealership-backed warranty that will cover major damage within the first few months of ownership.
Don’t get overly excited though because if you’re not working with a reputable dealership you could be in for a big used car warranty scam. There are some dealers and/or private sellers that will try to trick you out of your hard earned money to make a bigger profit by convincing you that this ‘warranty’ is a great deal and you won’t find any better. If you happen to run into any of the following scenarios, you should walk away and find a better company to work with.
Upselling and Underselling the Warranty
Upselling the warranty is when the dealers will make the price of the warrant astronomically high compared to other warranties available, and then offer you a large discount. This allows them bring the price down to what it actually should cost you, and now they’ve got you thinking you’re getting a great deal and that they are working for you. They have now gained your trust and they can get you to spend more money. Usually companies that offer extended warranties on used vehicles will not offer discounts or specials, so if you hear of this tactic it’s likely a scam.
Some crooked salesmen will tell you that you qualify for a low-cost warranty without telling you exactly how little that warranty costs – hence the reason it’s so cheap! You should always focus on what the warranty will cover more so than the price of the warranty, unless it’s extremely high, and always ask if you qualify for one that covers more incidents.
Getting Bumper to Bumper Coverage
Finding a warranty that covers almost every part of your car is possible. You just have to know what to look for. True, bumper to bumper coverage plans are generally called exclusionary policies and instead of listing the parts that the warranty does cover, it lists the parts that it doesn’t cover because it’s a shorter list. If you are given a document that is listing the parts that are covered if they were to break and you’re being told this is a bumper to bumper coverage plan, you’re being scammed.
Some dealerships do this because they know that they can get you to pay more money for a policy that you think covers nearly everything on your vehicle and they will gain a large profit from it. Always read the policy very carefully before you purchase it, and look at any fine print there is. If for some strange reason the warranty company cannot or will not show you the policy – leave!
Pay in Full Warranties Cheaper than 0% Financing
Paying 0% interest on anything is a good deal, and many times this is real financing without any hidden fees or scams, but there are a few exceptions. If you are buying a warranty that is cheaper if you pay the total price in full than it is when you finance it at 0% then you are not getting true zero perfect interest financing.
Another financing tactic you may come across is the company telling you that you must qualify for financing on a bad credit auto loan and an extended warranty, and that paying in full isn’t an option. If this is the case, then the company is full of crooks. Financing allows for them to charge you monthly interest on the warranty, and is just another way to get money from you.
Both of these practices are illegal and also show the type of dealership you are working with. They are more concerned about gaining a profit than gaining loyal customers, and have no integrity. If you run into this issue when looking for extended warranties at a dealership or even at a third party company selling warranties, don’t sign the paperwork. You will regret it if you do.
Getting Notices of Your Warranty Expiration Date in the Mail
Many times, marketing companies will get a hold of your information and tell you that your car warranty is about to expire and that you can purchase an additional one. The postcards or letter heads they use make it seem as if this is a legitimate notice from the car manufacturer itself or from the dealership, but it’s not. The coverage plans they offer you are very rarely worth the money they cost, and usually don’t have the coverage you will need anyway.
If and when you get any notices in the mail, throw them away. Manufacturer and dealership-backed extended used car warranties are very rarely handled through the mail, and if they are they will have some sort of symbol letting you know it’s real. If you can’t tell whether or not it’s from your dealership or if it is a real notice, you can call them. If they know nothing about it you know it’s a scam.
As We See It
Extended warranties on used vehicles can be a real life saver in the event of an emergency, and if you have the option to purchase one, we strongly suggest doing so – but only from a reputable dealer like the ones we work with. Scammers are everywhere and those customers with poor credit histories are the prime target because they seem to be the most desperate.
If your credit puts you in jeopardy of being a victim to these ploys, apply with Auto Credit Express for your used car financing. Not only are we a BBB accredited company — so are the thousands of dealerships we are partnered with. We will be able to get you set up with dealerships in your home town that can help you finance the best used car for your situation and get a good, affordable pre-owned warranty.