Rip-off alert: Aftermarket vehicle “service contracts”
Recently my wife and I purchased a 3-year old used vehicle from a small dealer in Dallas. The vehicle was priced very competitively, and a detailed inspection I had performed by an outside group, combined with a basic 90-day vehicle “warranty” covering transmission/engine issues gave me confidence that there were no major secrets lurking under the hood. The vehicle has done well for us so far, no complaints.
My complaint comes not with the dealer, but with the warranty company. The warranty that the dealer gave me, serviced by an outside party, as I’ve already stated, only covered major issues relating to transmission/engine issues. It cost me nothing, probably cost the dealer very little, and gave me added confidence to move ahead with the purchase.
However, this warranty or “service contract” company just sent me a Service Contract Renewal form, urging me to send them money to extend my service contract. And just look at the prices!!
3 Months – $275
6 Months – $410
12 Months – $650
24 Months – $1,050
36 Months – $1,400
MOST ALARMING IS THAT NOWHERE ON THE FULL-PAGE RENEWAL AGREEMENT DID IT INDICATE WHAT ISSUES WOULD BE COVERED BY THEIR PLAN WHATSOEVER.
What are the odds you will have a major engine re-build or transmission problem in the next 3 months, or even year? Not that high, probably. There are times it will happen out there, however, and probably old vehicles. If you have a 15-year old vehicle, maybe it would be worth buying this (if the company would even allow it, but my understanding is they typically impose a vehicle age limit).
Who has ever heard of sending someone money when you don’t even know what they are offering, and the odds of you needing whatever they are most likely offering are small?
Steer clear of these plans.
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