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June 25, 2008 Extended Auto Warranties Help Consumers Control Expenses The sluggish economy is forcing consumers to try to better control their budgets, to minimize large expenses, and to reduce financial risks. Many Americans are only one paycheck, one rent payment, or one car payment, away from financial ruin. Click here to read this article The luxury of the choice to buy a new car has disappeared for many, as the record losses of the auto manufacturers indicate. But that doesn’t mean that people are no longer driving. It means that people are keeping their current vehicles longer, rather than getting new ones. However, there is a silent risk for people who will keep their current car: That of a major, unexpected failure, requiring an expensive repair. Some vulnerable people are only one major repair away from financial collapse, and don’t even recognize the danger. A $600 repair for a broken power window may be safely postponed. But a $2500 transmission repair cannot be ignored, because the vehicle may not be drivable. The problem is compounded in that, without a vehicle to drive to work, there is no income to pay to repair the car. Having a functioning vehicle is not just a convenience in modern life, it’s a necessity. Click here to read this article For such people, there is a way to eliminate that risk, and to truly control their budget: Obtaining an extended vehicle service contract, popularly known as an extended warranty. By getting an extended warranty, consumers can proactively control their expenses for a major tool they use every day, their car. With a quality extended warranty, consumers are protected against unexpected vehicle repairs, even the smallest of which can cost upwards of $500. Extended warranties are available for most vehicle for terms generally ranging from two to seven years, with prices between $1300-2800 for comprehensive coverage. Those prices can almost always be paid monthly. An expected $80-150 per month warranty payment is much easier to budget for than a surprise $3000 engine repair, which takes the vehicle out of commission. Click here to read this article Amber Gizzy of Warminster, PA, had intended to use her tax rebate toward a new vehicle, but decided her financial condition was too unpredictable. She had heard that a popular consumer magazine advised its readers against an extended warranty, which she was considering. “My mind was pretty much made up that I wasn’t going to get a warranty, then my sister’s car fell apart,” said Gizzy. “She ended up paying almost $2000 to fix her transmission, and my husband and I actually had to lend her some of that,” she explains. “The worst part was,” Gizzy notes, “that she had to miss a few days of work because she had no way of getting there. She almost lost her job. Her car was just out of warranty but not even really old, so that whole experience definitely changed my mind about getting a warranty.” Gizzy’s story is not unique. Peter DiPersio, a service advisor in Boulder, Colorado, says that there’s an obvious difference between customers with a warranty and those without one. “The average day at my shop sees repair costs anywhere from $400 to $3000 in some cases,” said DiPersio. DiPersio adds that “Right now because the economy’s so bad people are putting off expensive repairs because they have to, if they can, even though I tell them that their just going to be back here with even bigger problems. The people with warranties just tell me to fix whatever the problem is, whatever the price, because they aren’t paying for it anyway.” Click here to read this article Amber Gizzy said that her extended warranty cost about $1700 for four years, which she is paying for monthly. She explains that “Even I can budget for $110 a month if I know it’s going to be coming up every month. But I definitely know I won't have $2000 or whatever to pay for something wrong with my car if it just happens suddenly. And I need my car!” There are many quality companies offering extended warranties. AutoWarrantyResearch.com, which launched in May, offers a free, complete, user-friendly guide to finding and purchasing an extended warranty. With an extended warranty, consumers can help their lives become a little more predictable, and can help make sure that their vehicle is ready when it is needed. Click here to read this article
May 30, 2008 The Advantages of Online Auto Warranty Shopping As worries about the economy grow, people’s desire to spend big bucks for a new car shrinks. So many are exploring the option of an extended warranty to protect their current vehicle. And, more important, to protect themselves from unexpected, and high, repair bills. We are pleased to introduce AutoWarrantyResearch.com as user-friendly, informative guide for consumers seeking objective warranty information. We offer a complete auto warranty glossary, a frequently-asked questions section, and a comprehensive summary of warranty fundamentals. We also provide links that can help consumers research other aspects of their automotive needs. Our goal is to provide unbiased, verifiable, quality information for consumers investigating auto warranties. Click here to read this article The AutoWarrantyResearch.com staff has decades of experience in the automotive, warranty, and insurance industries. We’ve pooled our resources and combed our contacts to produce the most authoritative and comprehensive online resource for consumers. The demand for quality auto warranties has lead to an expansion of the industry. With more options, better quality companies, and prices much less than the average new car down payment, now is a great time to buy an extended warranty. Not long ago, consumers were captive to the high prices and limited selection of dealership warranties. Now, just as the internet has revolutionized shopping for books, music, and so many other things, finding an auto warranty that is perfect for a consumer’s needs and budget takes only a few keystrokes and mouse clicks. Yet, not only is buying a warranty online simply another option, it’s an altogether better option than going with the car dealer. Click here to read this article Here are some of the major advantages for consumers who take their warranty search online:
More Choices
Cheaper Prices
Better
Coverage
More
Customer-Friendly We encourage consumers interested in learning about extended auto warranties to break free of the dealer’s grasp, and to investigate the many online warranty options. Consumers can save themselves time and money. A good place to start their search is AutoWarrantyResearch.com. Click here to read this article
Marc Karman
May 26, 2008 Preventing Car Loan Delinquencies If you
think homeowners are the only ones taking a beating in today's economy,
think again. While the mortgage crisis is still making headlines the
number of Americans falling behind on their car loan is skyrocketing. source: http://www.wxyz.com
May 15, 2008 Let the Buyer Beware.com
The cliché that the internet is like the Wild West resonates because it’s a generally accurate description. At least in our collective imagination, the West was wild because of the lack of law enforcement, or at least strict law enforcement. People did what they could get away with, simply because they could. The same is unfortunately true for many internet businesses, warranty companies not excepted. Click here to read this article In that highly competitive industry, companies go to great lengths to stand out, and to make a positive statement about themselves. It’s when those statements are not bound by the limitations of truth that the consumer is put at risk. A warranty company’s website is its most powerful marketing tool. On their websites companies say many things to try to appeal to the customer and to set themselves apart. But, how much of what they are saying is true? Naturally, the truthfulness of a company is a measure of how important honesty is to it, of how much honesty is a part of its corporate culture. Simply put, if a warranty company makes misleading statements on its website, how much should it be trusted to take care of us? How much faith can we have in its products? The general lack of regulation on the internet makes lying with impunity very easy. But companies that make deceptive claims should be exposed, and that’s why we’re taking a hard look at what warranty companies are asking us to believe, and whether we should. Click here to read this article The transgressions range from silly to serious. On the silly end of the spectrum, we have claim from Auto Service Warranty, whose website boasts that they are “Rated #1 in Customer Satisfaction.” But, who bestowed the rating? And when? The website does not elaborate. You can imagine why. Continental Warranty’s website wants you to know how important customer service is to them. They say “Perhaps most importantly: we believe in a straightforward way of doing business. When you decide to purchase an auto warranty with Continental Warranty, you will get the quality and service you pay for. Plain and simple.” That “plain and simple” approach has rewarded them with nearly 300 complaints over the last 36 months on their Better Business Bureau report. They style themselves the “industry leader,” and they are - for their astronomically high number of complaints. Carchex, also known as Smart Auto Warranty, is at least a bit more modest. They do not highlight their customer satisfaction record at all. Indeed, Carchex/Smart Auto Warranty Company is so shy about their customer service record that they have not even bothered to become an accredited member of the Better Business Bureau. That is typically the first step any online company takes that wants customers to know that it can be trusted. Click here to read this article On the extreme end of the deception spectrum is Warranty Direct. They carefully protect their reputation, yet recklessly mislead consumers with their website. Warranty Direct does not want you to read this:
The companies focused on here are not the only ones that don’t let the truth stand in their way of a good slogan. However they are among the most popular, and therefore, we believe, have even a greater responsibility to be truthful and honest in their marketing. It’s all-too easy for a successful company to succumb to greed and to engage in practices that may bring more profit in the short-term, but will certainly bring ruin in the long-term. “Sunlight is the best disinfectant,” the old saying goes, and we’re happy to shine a bright light on some shady practices. The Wild West was simply too big for law enforcement to cover. Similarly, the internet, with its billions of sites, is simply too massive to allow policing by regulators. In the Wild West, when law enforcement couldn’t do the job, a posse of citizens would meet out rough justice. And again, in a different time and context, in order not to be tricked by the people who want our money, we have to be an electronic consumer posse for the 21st century. Click here to read this article Consumer references for this article: http://www.labbb.org/BBBWeb/Forms/Business/CompanyReport_Summary.aspx?CompanyID=13128932&sm http://greatermd.bbb.org/WWWRoot/Report.aspx?site=41&bbb=0011&firm=23015869 http://www.nscic.com/management.html http://www.answers.com/topic/interstate-national-dealer-services-inc?cat=biz-fin http://biz.yahoo.com/ic/51/51834.html
http://www3.ambest.com/ratings April 11, 2008 Extended Vehicle Warranties: Knowing a Good Investment From a Good Scam Late last month the Missouri Attorney General announced lawsuits against five companies that offer extended vehicle service contracts, popularly known as extended warranties. The lawsuits allege misleading statements and failures to disclose critical information about coverage and procedures. How do consumers know whether they are working with a responsible company? Click here to read this article According the Missouri Attorney General’s website, the companies being sued engaged in the following practices:
The firms being sued are essentially telemarketing operations which happen to sell vehicle warranties. They purchase lists of customers from lenders, dealerships, vehicle manufacturers, or other sources, and directly market to those customers, typically by sending postcards. Giving credibility to the mailings is that the consumer’s vehicle information is printed on the postcard, and the return address or company name is, in one case, “Dealer Services.” Consumers may be forgiven for believing that the mail they have just received originated from their dealership, and is backed by the manufacturer. In fact, it is from a third-party telemarketer unaffiliated with any car dealer, or any manufacturer. The unwillingness to identify themselves properly, and to intentionally mislead consumers, are parts of the reason that these companies are being sued. The other part is that the warranties they are selling are poor quality. Click here to read this article The companies being sued are:
Trustworthy, responsible companies that offer vehicle warranties are out there. Such companies are registered and accredited with their local Better Business Bureau, and should have very few complaints – well under 100. Honest warranty companies will have their contracts posted online, requiring no commitment or payment to view them. They will not hesitate in identifying themselves as either warranty brokers, or direct sellers of their own plans, unaffiliated with any dealership or manufacturer. Reliable warranty providers will also have a rigid privacy policy which forbids the selling or distribution of customer contact information. A good warranty company will contact a customer in response to a person’s inquiry, rather than making an unsolicited phone call or sending an advertisement through the mail which pretends to be a notification of warranty expiration. Click here to read this article Vehicle service contracts can be a worthwhile investment, as millions of car-owners have learned, and many others who pay expensive repair bills have realized. Selecting a dependable company demands the same caution necessary with any other high-ticket item. For the careful consumer, the signs of a company people can trust are as clear as the signs of a scamming company are now notorious. Click here to read this article
April 3, 2008 Would You Like Some Risk with Your Warranty? The corporate irresponsibility of the early part of this decade was not confined to big names like Enron, WorldCom, and Global Crossing, nor to the energy and telecommunication industries. There were some high profile failures in the auto warranty industry, due to certain companies being built on the cheap. But the consumer ended up footing a huge bill after their warranty providers went belly-up. With people keeping their cars longer due to a sluggish economy, consumer protection organizations are again sounding sirens about the common cause of the collapse of most warranty companies: The RRG. Click here to read this article A risk retention group (RRG) is essentially a pool of money contributed by multiple warranty companies, from which these companies can draw if their own reserve accounts are strained by unusually high claims costs. Many warranty companies succumb to the temptation of joining an RRG because the associated costs are so low, since it amounts to being self-insured. In the competitive world of auto warranties, keeping costs low – therefore prices low - can give that needed edge to attract consumers. The more expensive alternative for warranty companies is to pay for independent, direct insurance from an established insurance company. The costs are higher for the warranty company, so that their policy prices may be higher, too. The amount of money available to a large insurance company, however, is vastly greater than that which is available to an RRG. If a warranty company is suddenly hit with high claims, the amount of cash at hand is what determines whether your warranty contract will pay your thousand-dollar claims for the next several years, or whether it’s merely an expensive piece of paper. Click here to read this article RRGs are vulnerable to failure because, compared to traditional insurance companies, they are weakly regulated, poorly funded, and most important, are linked to the warranty companies that they are supposed to protect, and are therefore subject to the same pressures straining the warranty company’s own reserve accounts, and subject to the same (mis)management of their associated warranty companies. The warnings from consumer advocates about RRGs seem well-founded: Every major failed warranty company, most notoriously Warranty Gold, Ultimate, and First Assured, were backed by an RRG. Those companies’ customers may have spent slightly less for their policies compared to other companies they researched. But, years later, the money they saved has been paid out of their own pockets many times over in car repairs that their defunct warranty companies were supposed to pay. It’s best not to even ask one of these customers whether they have, or will, ever get their warranty price refunded. They won't. Click here to read this article Just because a warranty company uses an RRG doesn’t mean that it will fail. It means, however, that if it encounters financial dire straits – which can happen anytime, especially these days - the likelihood of complete meltdown is much higher, because less money is available, compared to a warranty company that is directly insured by a traditional insurance company. Based on the history of the last decade, the security that warranty-purchasers seek will not be found in a company whose financial health relies on a shaky entity that has “risk” built into its name. Click here to read this article |