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Vehicle warranty scam calls are oddly common — why is that and what can you do about it?
“We’ve been trying to reach you about your car’s extended warranty…”
Chances are you’ve heard these oh-so-annoying words. That’s because there were almost 13 billion of these auto warranty scam calls last year — or nearly 40 calls per US citizen. Yikes.
Phone call and voice mail scams aren’t just an irksome disturbance, they’re expensive. Last year, they cost Americans approximately $30 billion. Double yikes.
If you’re here, you’ve either had enough of these robofools or you want to extend your warranty — but you’re unsure if you’re getting scammed. (Or maybe you’re genuinely curious as to how strangers got your phone number).
Whatever the reason, we’ve outlined everything you need to know, including what warranties actually are, how to decide if you need a warranty, and what you can do about those pesky, unwanted calls.
When you buy a new car — or any new product for that matter — it should meet basic quality and performance expectations. In other words, your car shouldn’t have any visual or functional problems that aren’t a result of normal wear and tear.
For example, if you drive your new vehicle off the lot and suddenly the “check engine” light comes on, your car probably has manufacturing defects. (Your vehicle, in this case, could be a “lemon.”)
An auto warranty is an automaker’s promise to live up to those standards. This isn’t an add-on — it’s baked into the price of your new car. Should your car fail to meet this standard, the manufacturer is on the hook for repairs. Hence why it’s also referred to as a manufacturer’s warranty or factory warranty.
Factory warranties are temporary. In most cases, they’re only valid for three years or 36,000 miles — whichever comes first. If your new car falls within these parameters, your car manufacturer’s warranty may still be active.
That said, some automakers are well-known for offering substantially longer warranties. For instance, Kia and Hyundai both offer 10-year/100,000-mile powertrain warranties. You can check with your vehicle manufacturer or local car dealer to confirm if your car’s warranty is still in effect. They’ll ask you for your vehicle identification number (VIN) as well as the mileage reading from your odometer, so have these numbers handy.
Keep in mind that car warranties only cover manufacturer defects, not maintenance, wear and tear, or driver negligence.
Used cars are another story. Certified pre-owned (CPO) vehicles come with manufacturer warranties. However, in other cases, the vehicle would need to be relatively new and hardly driven to still have a warranty. That’s because used vehicles are often beyond the mileage and term limits of the original warranty.
Lemon laws may grant you some sort of consumer protection if your used car is beyond your factory warranty. However, that depends on where you live. For example, Rhode Island covers defects and malfunctions for up to one year or 15,000 miles from the day you were delivered the used vehicle.
No, manufacturer warranties are not the same thing as extended warranties. The former is offered by your automaker and embedded into your car purchase. The latter is an add-on that can be purchased at any time from third-party warranty companies.
However, “extended warranty” is somewhat of a misnomer because it implies the manufacturer will re-up their coverage, which isn’t the case. Scammers can exploit this confusion and may try to lead car owners to believe otherwise.
The only situation in which a warranty is truly extended is for a CPO vehicle. Regardless, make sure to check a vehicle’s buyer’s guide to see what’s covered.
Vehicle service contracts (VSCs) are a form of extra protection that cover unexpected mechanical issues and errors. It’s worth noting that this typically doesn’t account for maintenance work like oil changes, tire replacements, etc.
Although coverage varies, your contract would likely include a list of included and excluded parts. For instance, your contract may cover your infotainment system. Once you file a claim and meet your deductible (if you have one), your VSC provider would then reimburse you for the repair.
Unlike manufacturer warranties, VSCs are add-ons that can be purchased from dealerships, finance companies, or third-party providers at any time. That said, it’s not uncommon to roll this plan’s cost into your financing and pay it off in monthly installments.
The terms “service contract’ and “extended warranty” are often used interchangeably, but that’s misleading. For starters, service contracts do not fall under the legal definition of a warranty. Second, there are key differences in how they’re structured.
Coverage from extended warranties may not start until your manufacturer warranty expires, whereas a VSC can be used in conjunction with your factory warranty to account for any missing gaps in your warranty coverage.
Moreover, VSCs can be adjusted according to your needs. You could get a plan for minor issues like your AC or radio — or broader coverage for things like your alternator or water pump. Conversely, extended warranties typically don’t offer this flexibility.
The primary reason you’d purchase a VSC is to protect your car (and wallet) from extensive repair bills. Also, they’re typically more comprehensive than a manufacturer warranty, which usually doesn’t cover minor issues like broken AC systems. And you aren’t limited by time or mileage limits, so you can purchase a VSC at any point.
However, a VSC is similar to insurance in that you could go through an entire policy term without needing it. Also, the details of your contract matter since coverage can vary — your contract might still exclude certain parts and services that wind up needing repair.
Long story short, the value of a VSC depends on your needs and budget.
If you elect to get a VSC, be mindful of whether you have a deductible or not. If you do, it could be on a per-visit or per-repair basis, which can drastically impact your bill. Let’s say your car needs three separate repairs and your contract has a $100 deductible. With a per-visit plan, your financial obligation would be capped at $100. However, with a per-repair plan, your bill jumps to $300.
Now that we’ve discussed warranties in-depth, let’s answer an all-important question that’s probably bugging you: “Why do I keep getting calls about my vehicle warranty?”
We can’t think of many people who intentionally sign up for spontaneous sales calls. So, how do these people/robots get your cell phone number?
Believe it or not, you may have unknowingly agreed to allow businesses to share your personal information. Think of how many times you hurriedly click “I agree” when faced with a Terms of Service prompt. Sometimes, a clause within those agreements permits the business to sell your information to marketers. Even government organizations, such as the Department of Motor Vehicles, sell your information to earn extra income.
However, bad actors may have acquired your personal information via more nefarious methods, such as a data breach or through illicit channels.
Regardless, you’re getting calls about your auto warranty that you most likely don’t want to receive. Before we outline how you can put an end to these calls, let’s discuss how you can differentiate a scammer from a real person at a legitimate company.
When you answer the phone, it only takes a couple of seconds to figure out if a robocaller or telemarketer is on the other end. But how are you supposed to tell if it’s a scam? Beyond an unfamiliar caller ID and pure intuition, there are a couple of red flags to be wary of.
If you receive a pre-recorded sales pitch that lacks details and presses you to make a decision, it’s probably a phone scam. For instance, they may throw in general descriptors like “great deal” or “you won’t want to miss this exclusive opportunity.” A vehicle service contract is hardly a time-sensitive purchase. There’s no reason for you to rush into anything.
If the individual or robocaller threatens you, either directly or indirectly, they’re scammers. For instance, the caller may say you’re “at severe risk” by driving without an extended warranty. That’s simply not true.
In other cases, scammers may impersonate members of the IRS or SSA and threaten to fine or arrest you. It’s important to know that this is only a scare tactic. Government-sponsored agencies will never solicit action or information over the phone — they’ll send a written notice.
If the caller suggests that you need to provide personal information — such as a credit card number, social security number, bank account number, driver’s license number, etc. — in order to proceed, it’s probably a scam. It’s never a good idea to give money or personal information to a stranger over the phone.
You’d be hard pressed to find someone who wants more unsolicited phone calls. So, you’re likely here to figure out how to permanently zip the robotic lips of these incessant scammers.
There are various options you can pursue to prevent car warranty robocalls from bothering you:
At this point, you might be interested in a VSC — but how can you be absolutely sure you aren’t getting ripped off by a scammer? The easiest way is to avoid the auto warranty robocalls and go directly to the source. There’s no need to take the risk of transacting over the phone when you can visit a legit provider’s website.
You can check with your preferred local dealer to see if they offer this product or vet online providers by investigating their standing with the Better Business Bureau.
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