The Worst Extended Car Warranty Companies and How to Avoid Them

Here’s a guide to avoid possibly fraudulent and troublesome extended warranty providers.

The extended warranty market has gotten out of hand. At one point the third-party market was nonexistent and the only way to get an extended warranty was to get one from the manufacturer. But the landscape has changed since the dawn of the 21st century. There are more third-party warranty providers than ever before and choosing the right one can be a daunting task. In a bid to get a piece of the action a lot of third-party warranty providers have popped up that are up to no good. In this article, we’ll look at how to avoid such companies.

Car Warranty Company Red Flags

The Worst Extended Car Warranty Companies and How to Avoid Them
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Filtering out bad extended warranty plans might be challenging when shopping in a market flooded with multiple third-party. Here are a few red flags to look out for in an extended warranty provider.

Forced Sales Calls

If the sales team is reluctant to sell you the extended warranty without disclosing details about the plan and if they insist on giving you details after purchasing the warranty then steer clear of such providers.

Check Reviews and Rating

Always look for customer and agency reviews of the warranty providers on your shortlist. You can examine complaints lodged with the Better Business Bureau (BBB) and check google for customer feedback. Not all reviews might be as transparent or unbiased but looking at a significant number of them should help paint a clear picture of the warranty provider’s credibility.

Learn how to cancel your extended warranty if you need to or what to do if a dealer refuses to cancel your warranty.

Lack Of Clarity on coverage

Most warranty providers will specifically mention the parts that are covered under the warranty and the parts that aren’t. Most reputed companies make sure that this list is as clear as possible and easily legible to prospective buyers. But if this isn’t the case and finding information even via their online channels or from customer care representatives is hard, then try and avoid these warranty providers.

Major Limitations

Processing a warranty claim is probably the most important attribute in a warranty provider. If the process of filing a claim is and getting reimbursed for it is slow and complicated, then that makes the customer experience extremely poor. Similarly, if the warranty provider does not offer the flexibility of choosing from multiple repair shops, it is yet another major inconvenience and a limitation that cannot be overlooked.

Also make sure you have the right type of warranty to fit your needs!

How To Avoid Car Warranty Scams?

The Worst Extended Car Warranty Companies and How to Avoid Them
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Whenever it comes to people asking for money on the phone, beware. Extended Warranty-related scams aren’t uncommon so here are some guidelines laid by Federal Trade Commission (FTC) to protect you from such scams:

  • Walk away from fast talkers. A telemarketer pushing auto warranties is going to use high-pressure tactics to hide any faults in the product. Legitimate companies that care about protecting your vehicle will give you the time you need to make a decision and provide you with written information to reference.
  • Don’t give out any sensitive information. Unless you know who you’re dealing with, never provide your bank account, credit card, or Social Security numbers. It’s best to hold onto your driver’s license number and Vehicle Identification Number (VIN) too. This data can be used against you to commit fraud. If a company asks for sensitive information while you are simply researching plans, it could be a sign that the company is untrustworthy.
  • Beware of unsolicited calls. If you put your phone number on the National Do Not Call Registry, you shouldn’t be receiving unsolicited sales pitches, either from a live person or a recording. If you do receive these, make sure you report them.

Examples of the Worst Car Warranty Companies

The Worst Extended Car Warranty Companies and How to Avoid Them
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Direct Buy Auto Warranty:

Direct But Auto Warranty is a provider that has made rounds for all the wrong reasons. In 2015, the state of New Jersey reached an $810,000 settlement with Direct Buy Auto Warranty because the provider misled customers about warranty protection and didn’t follow through with promised coverage. The lawsuit alleged that the company violated the New Jersey Consumer Fraud Act, as well as the Plain Language Act, the Regulations Governing General Advertising, and the Corporations Act. Direct Buy Auto Warranty promoted comprehensive extended warranties that claimed to pay for most repairs. Instead, the policies had many exclusions that left customers paying for the majority of repairs. After the lawsuit, the business was ordered to shut down.

American Standard Auto Protection Warranty:

American Standard Auto Protection better known as ASAP warranty officially shut shop in the first half of 2019. The reason behind their fall was their inability to fulfill the 30-day cancellation. There customer service team failed to answer any customer calls. The BBB reached out to ASAP Warranty about these complaints and also to substantiate claims of being rated the most trusted extended auto warranty program. Contact attempts went unanswered.

Now those who call ASAP warranty receive a message stating that the company is not taking any new customers and the old customers will not receive any service. The customers who purchased an extended warranty from them are recommended to contact the attorney general’s office and file a formal complaint against the company.

US Fidelis

US Fidelis was a big-time defaulter that was shut due to a series of wrongful practices. The company received upwards of a thousand complaints with the BBB which sparked a nationwide investigation with involvement from multiple attorney generals. Their claims regarding official tie-ups with manufacturers and workshops turned out to be false.

At the end of the investigation, Darain and Cory Atkinson pled guilty to insurance fraud, felony stealing, and other violations in 2012. Darain was sentenced to eight years in prison, while his brother Cory received a four-year sentence.

Do You Need An Extended Car Warranty?

The Worst Extended Car Warranty Companies and How to Avoid Them
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Warranty coverage can come in handy if you don’t want to spend money later or choose to purchase a vehicle that costs higher than usual to run and maintain. In cases of affordable and reliable cars, the warranties might not be as useful especially if you walk around with enough savings to cover occasional repair bills. Before buying an extended warranty make sure you evaluate providers based on cost, coverage, and convenience. Also, don’t forget to compare policies and negotiate to get the best possible deal.

Still not sure? Our in-depth guide will help you decide if you need an extended car warranty or not!

How to Find the Best Extended Auto Warranty Companies?

The Worst Extended Car Warranty Companies and How to Avoid Them
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Research is key when it comes to picking out an extended warranty plan that best suits your needs. As we established from this article, there are plenty of companies trying to take advantage of unassuming buyers. Here’s a list of criteria that you can use to evaluate a warranty provider:

  • Industry Standing
  • Coverage
  • Cost
  • Customer ratings
  • Transparency
  • Professional ratings

Make sure you know the ins and outs of car warranties and whether or not they are even worth it!

Top Recomendations for Extended Auto Warranties

The Worst Extended Car Warranty Companies and How to Avoid Them
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When it comes to third-party warranty providers, we strongly recommend getting in touch with them to try and get the best deal since most of them will offer you a discount over the quoted price if you ask for one. Olive and Endurance are some of the best third-party warranty providers that offer the option of transferring ownership. Here’s a brief review of these providers:

Uproar:

Uproar is based out of Seattle, Washington, but it’s not like any other extended car warranty company out there. Uproar bills itself as an innovator, which makes a lot of sense considering it’s the first extended warranty company to offer a 100-percent digital, subscription-based experience. The main highlights of uproar include an instant quote and signup online, same-day coverage, no long-term commitments, transparency, and no aggressive salespeople or robocalls. They are BBB accredited and have five-star ratings from both Google and Consumer Affairs.

Olive:

With one of the highest satisfaction rates in the industry, a result of their extremely reasonable pricing structure, Olive is yet another provider that has built up quite a fan following. And the cheaper prices mean you can set aside those saving and use them towards routine maintenance.

  • For cars up to 10 years old/ 140k miles
  • 100% online extended warranty solution with customizable plans
  • File claims online 24/7
  • Affordable monthly payments
  • Call for a quote & get a free $5 gift card

Forever Car

This brand is a well-reputed one and offers a plethora of options. There Platinum Plus warranty plan covers repair costs for both mechanical breakdowns and wear-and-tear items such as windshield wipers, fuses, light bulbs, and brake pads.

  • 4 distinct warranty plans spanning a wide price range
  • Cut repair costs with full protection for your vehicle
  • Inspection required before a claim can be filed
  • Deductibles range from $0 to $500

Endurance:

Endurance is one of the biggest names in the third-part warranty space and offers a plethora of plans to cater to a wide range of customer needs. The Endurance Advantage™ plan covers mechanical breakdowns and maintenance through three levels: Preferred, Plus, and Prime. These plans cover all basic maintenance parameters like oil changes, engine checks, and brake pad replacements, along with additional services like roadside assistance, towing, and rental car reimbursement. Some of the other benefits include:

  • Coverage for cars up to 20 years old
  • Basic powertrain warranty options are available
  • Inspection required before a claim can be filed
  • Extra perks with all-inclusive membership
  • Join & save $300 on a protection plan

CARCHEX

They offer coverage for cars with up to 250,000 miles which makes them a great choice for people who plan to purchase a warranty for their heavily used vehicles. They offer a wide range of policies some of which offer industry-leading claim filing processes. With an A+ rating from the Better Business Bureau, CARCHEX should be on your list when shopping for an extended warranty.

  • Covers cars with up to 250k miles
  • First-rate full-coverage protection for new and used vehicles
  • The claim filing process depends on the policy
  • No-haggle, low-price guarantee
  • A+ rating from the Better Business Bureau
Bhavik Sreenath
Bhavik Sreenath
A keen automotive enthusiast with a love for anything with engines. He loves discovering the world of cars and technology to explore new boundaries in the field of modern-day journalism.  Read full bio
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