Avoid These Worst Extended Auto Warranty Companies: Top Red Flags to Know
An extended auto warranty can be exactly what you need to provide peace of mind once any manufacturer’s auto warranty comes to an end because they help protect you against expensive car repairs. Not all extended warranty providers, however, can be trusted. Satisfaction, wasted money and, in extreme cases, a more than unfortunate lack of coverage when you need it most can be the result of choosing the wrong company.
In this guide, we’ll help you identify the worst extended auto warranty companies and give you essential tips on what to look for in a reliable provider.
Worst Extended Auto Warranty Companies
There are many reasons to choose the right extended auto warranty provider. The wrong company can have you with unreliable service, denied claims, etc. very high unexpected cost. Extended warranties are not all equal, and some companies will always put profits before customer satisfaction, so it is in your interest to recognize the red flags.
Clearly stated and trusted coverage, fast claim processing and excellent customer service are all things to look for in a good warranty. If your company isn’t up to par in these areas, you may have a sticky situation with a warranty that makes promises it can’t deliver on.
What are Extended Auto Warranties?
An extended auto warranty is a fancy phrase for an agreement to cover repairs and car services beyond your original manufacturer warranty. Manufacturers and some third party providers then package these extended warranties for you to help cover the cost of repairs that would otherwise be unexpected.
The Different Types of Extended Warranty Available
Bumper-to-Bumper Warranty: This is the most comprehensive type of coverage, tho typically covering nearly all parts on the vehicle except things like tires, brakes, and oil changes.
- Powertrain Warranty: Ensures major engine and transmission parts are covered, but not a lot more than bumper to bumper warranties.
- Drive Train Warranty: Like a powertrain warranty but might encompass various items such as the axles and differential.
- Exclusionary Warranty: Excludes nothing unless specifically provided for in the contract.
- Stated Component Warranty: It covers only selective vehicle parts as mentioned in the warranty agreement.
The protection you want, along with your vehicle’s needs and banking budget, will dictate what type of warranty you will have. That said, it’s good to check up on the warranty provider to confirm that the coverage really is legitimate and all encompassing.
Top Signs of the Worst Extended Auto Warranty Companies
Many times it is possible to figure out if a warranty provider isn’t what it seems. Here are the red flags to look out for before considering a warranty company.
A Poor Reputation And Customer Service
Bad customer service is one of the biggest signs of a bad warranty company. When you have trouble at least to reach someone over the phone or they simply reply late to your inquiries, it’s a red flag that the company you are dealing with doesn’t respect customer satisfaction. Such online complaints and comments are a great source to judge the company’s reputation. Warning signs are negative reviews, especially those that mention disputes with claims or customer service.
Hidden Fees and Fine Print
There are some extended auto warranty companies that hide hidden fees in their fine print. Usually, these are also cancellation fees, high deductibles or extra charges for some services. An unclear warranty or a warranty company that won’t be transparent about fees is a big red flag. Remember to read the fine print always before making such a commitment.
Unclear or Limited Coverage
When a company is promising extended warranties that are vague, or there isn’t even a true warranty — be bothered. If the language of the terms is unclear it could mean that some repairs or services aren’t covered. It is often done to make the warranty look cheaper, but it only continues to make you difficult when you want to cash it.
Slow or Denied Claims Process
One of the worst extended auto warranty claims experiences you can have is with a slow or denied claims process. It may be hard to locate repairs you need because some companies will stall claims or reject them outright. Before purchasing a warranty make sure the company has a clear, efficient claims process.
The Worst Extended Auto Warranty Companies to Avoid
Let’s take a closer look at some of the worst extended auto warranty companies, highlighting the issues that make them unreliable.
Direct Buy Auto Warranty
Many complaints from customers of Direct Buy Auto Warranty involve poor coverage and service. Even if customers believed repairs were covered under their contract, they said they’ve been unable to get their claims approved. Furthermore, people are complaining about extra charges and fees that weren’t clearly listed before customers signed on.
Why to Avoid: Denied claims, poor customer service, and coverage isn’t so clear.
US Fidelis
Before it filed for bankruptcy, US Fidelis was among the best known names in the extended auto warranty industry. The company was hit with multiple lawsuits accusing the company of deceptive practices, such as selling people warranties that they did not need, and coverage that did not meet customers’ expectations.
Why to Avoid: Bankruptcy, poor reputation and deceptive practices.
Department of Warranty Services
Lots of complaints had been lodged with the Department of Warranty Services about their denied claims and misleading sales tactics. A lot of customers said they paid for coverage that didn’t pay off when they needed repairs. In addition, the company has become also known for its aggressive marketing tactics, which often mislead consumers into buying plans unnecessary.
Why to Avoid: Denied claims, aggressive marketing, and misleading information.
CarShield
One of the more well known extended warranty companies is CarShield, and they have a somewhat shaky reputation. But while some customers have praised the bridge loans, many others have written about hidden fees, unclear terms and terrible customer service. In addition, CarShield has a history of delayed or denied claims meaning when your car breaks down, you can be left frustrated.
Why to Avoid: Most of their fees are hidden, their terms are all confusing, and their claims are so slow.
ASAP Warranty
ASAP Warranty has come under fire for their false sales tactics and bad customer service. The company was also difficult to reach for many customers, and unresponsive at the time of making the claim. Some have said the coverage wasn’t as extensive as promised.
Why to Avoid: Unconscionable sales tactics, bad customer support and limited coverage.
What to Look for in a Bad Warranty Deal
It’s really about paying attention to all the details of a bad extended auto warranty deal. Here’s how:
Reading the fine print is important
Always take a very careful look at the contract. Look for:
- Exclusions and limitations to coverage.
- Policies and fee related to cancellation.
- Papers work required and claim processing.
A major red flag is if the company can’t provide you with a written contract initially and somewhat tries to do without one.
Read Online Reviews & Ratings
Research the company on trusted platforms like:
- Better Business Bureau (BBB)
- Trustpilot
- ConsumerAffairs
So pay attention to patterns in complaints, especially for denied claims or hidden fees.
Check the Company’s Reputation
But look for lawsuits, regulatory actions or warnings from consumer protection agencies. If company has legal trouble, it is not likely to be trusted.
What To Do If You’ve Already Bought From a Bad Warranty Company
If you bought an extended auto warranty from a bad provider, there is no need to panic. The first thing you need to do is read over your contract to see exactly what your rights are. Most of all, you may be able to cancel the contract, but there’s a slight chance that the company responsible will charge you cancellation fees.
You should keep close track of all communication with the company’s customer service and contact the company. But if the company won’t stand by the warranty, you may have to file a complaint with the Better Business Bureau (BBB) or state consumer protection agency.
What Qualities Make A Good Extended Car Warranty Company?
A great extended auto warranty company provides extensive coverage more or less the associated terms and cost effective pricing. The company should have a good standing, good reputation, good customer reviews and good claims process. Customer service is essential and the claims process should be very simple and easy to navigate.
Conclusion
When you buy an extended auto warranty, you want to shop around and choose a good company. Do not join bad customer service, hidden fees, and unclear coverages companies. There are red flags — be aware of them and always read the fine print before you sign a contract. A good warranty company will give you the peace of mind, and protection that is needed for your vehicle; a bad one will have you frustrated, and out of pocket.
FAQs:
Seek out good, clear, comprehensive coverage, good customer service and transparent terms.
The majority of those are companies that deceive you, have bad customer service, and make it hard for users to file a claim.
Check the fine print, read the reviews, stay away from companies with a shaky track record with claims and fees.
If your claim is denied to you, ask the company to explain why and then contact consumer protection agencies.
In most cases you are able to cancel your warranty, be sure to check that there aren’t any cancellation fees as well as whatever terms you have agreed to in your contract.