Are extended car warranties a scam?

You are led to believe that you are extending your current warranty. This is misleading and, yes, illegal. They usually ignore Do Not Call records and give car owners the impression that they represent dealers or automakers. But your extended warranty may not cover your house being struck by lightning and cooling your TV, or you may be so angry with the loss of your favorite sports equipment that you throw your plate of hot wings on the screen.

Extended warranty scams are plentiful, and without knowing the red flags, it's easy to spend your hard-earned money on a useless guarantee. After conducting an extensive analysis of the industry, we discovered that suppliers such as Endurance and CARCHEX are reliable extended warranty companies. A seller may ask you if you want to include the cost of the extended warranty in the financing of your vehicle. So before you buy an extended warranty, make sure you do your research to find one that is worthwhile, but don't leave it at that.

Especially mobile phones are one of the most common items where people buy extended warranties without even thinking about it. In addition, half of the extended warranty usually goes directly to the seller's commission, not to you. Some mail fake warranty expiration notices, designed to look like they were sent by manufacturers or state motor vehicle offices, with a toll-free number that car owners can call. At the end of the day, it's not worth adding an extended warranty to your car (especially if you owe money for it).

However, many extended mobile phone warranties only cover defective parts and do not help in case of loss, theft or damage to the phone. When evaluating the pros and cons of extended car warranties, look at what you receive from the supplier and compare it to the overall reliability of your vehicle. A cautionary tale Extended warranties are pretty bad as a concept, but fast-money artists make them infinitely worse. When you decide to purchase an extended warranty, you can usually choose your deductible or the amount you'll have to pay out of pocket for repair.

If you own a motor vehicle and live in the United States, you probably received an automatic call to extend your warranty.

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