We’re having a run on car warranty scams in my area. When a customer comes in to question, I call over to their dealership or advise them to pay a visit before purchasing anything. I do this because coverage I want them to have the best coverage.
In my driveway, I have a 2001 SUV. This car has 185,000 miles on it. We keep it to use in the snow and bad weather because it handles nicely and gets the job done. It’s also a good to use if one of the newer cars is in the shop.
I carry liability only on this car because it has no value. The car warranty ran out years ago. Yet, every year about this time, we get the car warranty notices and/or phone calls warning us that the warranty has expired. Rest assured, if anything happens to our old SUV, the car is getting junked – not repaired.
I am not alone here. At the agencies I have worked at, I have customers who want to buy a car warranty from me. They often produce the letter or refer to a phone call they have received. So, with a heavy heart, you have to explain that it is a scam.
There are two things to keep in mind. First, they may already be covered by the dealership. For instance, when the warranty on the SUV engine, the warranty protection on the axle, sensors, and dashboard modules continued for another six months.
Second, customers often have no idea what is covered or even if the dealership/repair shop they use will accept the warranty they purchased. The majority of your car manufacturers do not condone these warranties and their dealerships will not accept them – so the customer has paid for coverage they cannot get.
One insured who purchased the warranty did not receive a policy booklet, insuring agreement or even an exclusion list. There was no telling what was covered under the warranty they purchased or how long it was good until. To me, that is no guarantee for coverage.
You don’t have to look far to see lawsuits against legitimate car manufacturers and/or dealerships. So, you can imagine if the car warranty offer was legitimate, they would need a ton of backing. If they didn’t, the company would be out of business sooner than later.
It’s best to warn customers – if you’ve gotten the call/email, they have. Use it during retention, write a newsletter about it. Our insured’s need to know.
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