November 19, 2010 The Better Business Bureau's Grading System Questioned ABC News's investigation into the Better Business Bureau's questionable grading system made headlines in the wake of its report. Businesses throughout the nation are coming forward with stories about mistreatment and unfair handling by the BBB. With the BBB's reputation as an objective consumer advocacy organization tarnished, consumers may be wondering who they can now turn to for fair information. Click here to read this article November 12, 2010 Terror
Group Gets 'A' Rating From Better Business Bureau? The Better Business Bureau, one of the country's best known consumer watchdog groups, is being accused by business owners of running a "pay for play" scheme in which A plus ratings are awarded to those who pay membership fees, and F ratings used to punish those who don't. To prove the point, a group of Los Angeles business owners paid $425 to the Better Business Bureau and were able to obtain an A minus grade for a non-existent company called Hamas, named after the Middle Eastern terror group. "Right now, this rating system is really unworthy of consumer trust or confidence," said Connecticut attorney general Richard Blumenthal in an interview to be broadcast as part of an ABC News investigation airing tonight on 20/20. Click here to read this article June 2, 2010 Nine ways to save money on car repairs I have a deep seated fear of taking my car to the mechanic. My understanding of cars is limited to what I learned in high school in small engine repair. You will be even less impressed with my educational credentials when I tell you that I attended public schools. The fear is a macho thing. I know very little about cars and my biggest fear is that the mechanic starts talking about fuel injectors, brake lines, struts, axles etc. and I do not understand him / her. That being said, I have learned a few things over the years and have been fortunate enough to keep my car repair costs to a minimum. Here are a few things to keep your car repair bills down: Click here to read this article Due to new regulatory standards, use of the word "warranty" is to be discontinued and replaced by the phrase "service contract" in the marketing and servicing of what is commonly known as the auto warranty industry. Although we appreciate any attempt to help promote transparency and accountability, it is our contention that eliminating the word “warranty” from such materials will only serve to confuse consumers and open the door to “here today – gone tomorrow” predatory companies which will take advantage of the opportunity and further throw the industry in disarray. The following is an article from our friends over at warrantyweek.com: January 21, 2010 Vehicle
Service Contract Industry: As we continue our tour of the extended warranty industry, we've come across a problem regarding the terminology we're using to describe the automotive portion of the business. We thought we knew what to call it, but vehicle service contract turns out to be less popular than we suspected. Click here to read this article January 14, 2010 Vehicle
Protection Association: Soon, it will be safe for all of us to once again tell the people we meet at parties and weddings what we do for a living. "I work in the warranty business," we will say, and what they will not say in response is "Oh yeah, one of your buddies called my cell phone yesterday and told me that my car's warranty was expiring." That's because the scourge of "expiring warranty" scams is showing signs of winding down, thanks not only to the de jure solutions now being pursued in the courts by 50 angry attorneys general and the reawakened Federal Trade Commission, but also the de facto solutions the market itself is imposing on those who dared to abuse their customers. One the one hand, thanks to the increased enforcement of "do-not-call" rules, the companies that called every phone number they could find are now curtailing those activities, letting some of their less occupied sales staff go, and finding other ways to sell their vehicle service contracts. On the other hand, the industry itself is making great progress in the realm of industry self-regulation, thanks to the efforts of trade groups such as the Vehicle Protection Association. Industry
Self-Regulation Back in an August 14, 2008 Warranty Week article, MacMurray said that the direct marketers of vehicle service contracts -- those who sent out postcards and emails, advertised on television and radio, or called consumers directly -- would have to self-regulate or they'd be run out of business by the consumer protection agencies and attorneys general that were logging an incredible number of complaints from their constituents even then. So here we are in early 2010, and some listened but most did not. And the consumer protection agencies and attorneys general did exactly what MacMurray predicted they would do. "It's run a lot of people out of business," she said of the groundswell of negative publicity and the prosecutions it caused. Seventeen months ago, there were perhaps 100 to 120 direct marketing companies in the business, many of them auto-dialing or mass-mailing their "expiring warranty" messages at will, until the regulators simply had enough. Many were litigated out of business, or had to shutter when the do-not-call and telemarketing rules became much more restrictive. Survival
of the Fittest Meanwhile, MacMurray hasn't given up on industry self-regulation. In fact, she said she thinks the chances of the remaining industry players putting in place an effective plan for self-regulation have actually increased. "Since we last talked, we are now at a level of buy-in of who's left in the industry to truly make it succeed, and to succeed by wholly complying with the law in a manner where you are constantly checked, and probed, and mystery shopped," MacMurray said. Evolution has done its job: the fittest have survived. That's not to say that there aren't still guys operating illegal auto-dialing operations out of their spare bedrooms in Miami and Las Vegas, concealing both their identities and locations, and evading both the regulators and the process servers. But their activities have dropped off considerably, down perhaps to the level of the "Bill Gates selected your email address to win the Microsoft sweepstakes" or the "I am a dead Nigerian millionaire with no family" scams. Because of all the uproar over the auto-dialers and their "expiring warranty" scam, however, the VPA's Standards of Conduct have now effectively banned the use of pre-recorded marketing messages by its members. Calls by live persons are still permitted by the VPA's rules, but federal telemarketing sales rules have meanwhile become much stricter. So that sales channel has lost its luster. Besides, the primary appeal of the auto-dialers was their low operating cost, and that advantage disappears as soon as live attendants become involved. Not
Extended Warranties? To be specific, the standards state that "Members shall not use in their company name, advertisements, sales solicitations or any other description of their products, words such as "warranty," "dealer," "dealership," "manufacturer" (including actual manufacturer's name; e.g. "Ford") or any other words that falsely imply that the company is somehow associated with the manufacturer of the motor vehicle." MacMurray said that was done to prevent consumers from confusing the vehicle manufacturer's warranty with the services being offered by these unrelated third parties. "The majority of what's sold by our members are service contracts," she said. Granted, the term "extended warranty" may also have been an accurate description of the services being offered, but it was being combined with company names and department names in such a way as to become deceptive. So the VPA's members decided to ban the use of the word "warranty" in either the company name or the product name. Members also agreed to ban the use of words such as "insurance," "surety," or "mutual" in their marketing materials, and also cannot choose company names that are deceptively similar to the names of any existing insurance companies. The goal is to avoid making any statements that could be misleading or confusing, and to avoid implying any nonexistent affiliation with a manufacturer, dealer, or auto insurance company. Elsewhere, the standards ban the use of marketing terms such as "exclusive," "limited time," or "preselected," unless the offers really are time-limited or are made to only a selected few. The rules also ban implying that the service contracts on offer are in any way linked to product recalls. If a vehicle identification number is included, only the first 12 digits can be mentioned. If a VPA member should choose to use any service providers located outside the United States, those service providers must adhere to the VPA's standards as well as all applicable U.S. laws. And before they accept a call transferred from any outside service provider, they "must conduct due diligence to ensure that the transfers were obtained legally." In a very comprehensive manner, the document forbids most of the practices that got the industry into trouble, and closes most of the loopholes that could have been used to allow those practices to continue. Going
Into Training Mode "The auditor helps them set up policies and procedures, and helps them review their calls -- everything they need to be able to comply with the standards," MacMurray said. "While the auditor is there, she listens to calls, and she listens to tapes of calls. (We now require all calls be taped.) And once they've met all the standards to her satisfaction, she recommends to the [VPA] board that they be certified." The list of VPA board members now includes: Rebecca Howard of PayLink Payment Plans LLC (formerly Warranty Finance LLC); Scott McMillan of Mepco Finance Corp.; Carter Patterson of Forté Data Systems Inc.; Marci Johnson of Summit Finance LLC; Matthew Weil of American Guardian Warranty Services Inc.; Paul Sporn of Royal Administration Services Inc.; and Paul Chernawsky of Endurance Warranty Services. Mystery
Shoppers MacMurray said she told the salesman to go ahead with the purchase and to process a deposit for her, but she told us that she would later call him back and cancel it. That, by the way, will validate that all the VPA's rules for cancellations and refunds are being followed, as outlined on page 15 of the Standards of Conduct. Buyers have 30 days to cancel, and the seller has 30 days to make the refund (but only five days to return the deposit if it was made by credit card). If the seller doesn't meet those standards, their certification could be revoked. And if they lose their certification, they may also lose their ability to finance the service contracts they're selling. MacMurray said the three market-leading finance companies that each have an officer on the VPA board -- PayLink Payment Plans LLC (formerly Warranty Finance LLC), Mepco Finance Corp., and Summit Finance Inc. -- have each decided not to do business with those who lack or lose certification by the middle of 2010. "With the perilous situation with the regulators," MacMurray said, "only if we can be assured that the members are doing what we say they're doing will everybody be able to escape this constant litigation that they've been under for the last couple of years." MacMurray said the wider goal is to help the regulators sort out which companies are doing the right thing and which need their continuing attention. In fact, she said, once most of the VPA members have been certified, they may begin to help the attorneys general and the Federal Trade Commission hunt down those companies that chose to remain outside the law. Only then can the reputation of the industry be repaired and restored. According to the preamble of the Standards of Conduct, dishonest, misleading or offensive communications will discredit all members of this industry. Because of this guilt by association factor, all companies with a stake in the industry should encourage others to follow these standards as well. December 29, 2009 After more layoffs, US Fidelis stops selling service contracts By: Matthew Hathaway, St. Louis Post-Dispatch Wentzville-based US Fidelis once claimed to be the nation’s leading seller of extended auto-service contracts. Today, the company announced it has stopped selling the so-called extended warranties. The end of sales comes on the heels of at least three mass layoffs in recent weeks that have shrunk the company from about 1,100 employees earlier this year to “more than 200,” according to a company statement. Those workers include customer-service and account-resolution agents who work with existing customers, which the company has said number more than 300,000. Click here to read this article The company has blamed its dramatic collapse on the economy and what it considers to be unfair criticisms from consumer groups and the news media. “As a result, hundreds of good, hard working people have lost their jobs and the St. Louis area has lost hundreds of millions of dollars in annual economic impact that our company provided,” said a statement attributed to US Fidelis Chief Executive Chris Riley that was released Tuesday by company spokesman Ken Fields, of the Fleishman-Hillard public relations firm. The statement claims that the company — a target of multiple government investigation, including a coordinated one by 43 state attorneys general — delivered “more than $280 million in annual economic impact in Missouri.” Earlier this month, the company let go hundreds of employees in the call-back sales and “saves” departments and elsewhere in the company. This week, the lay-offs hit the main sales floor, where in the company’s heyday hundreds of telemarketers sold contracts to consumers nationwide. The statement said the latest mass layoff was “a difficult decision.” According to the statement, laid-off employees have been “paid in full for all commissions and compensation due to this point, including a severance amount.” The outgoing message for the company’s main sales number says the office is closed for the holidays and instructs consumers to “contact us at a later date.” Here is the company statement in full:
November 12, 2009 Vehicle
Protection Association Acts In Advance of Missouri Attorney General
Enforcement Cases Against Certain Automotive Service Contract Vendors The VPA believes that activation of its Certification-Audit Program, announced in late September, and the implementation of its Standards of Conduct for association members, announced this month, will help to rein in any consumer-unfriendly actions that threaten the integrity of the vehicle service contract industry. In addition, the VPA welcomes the opportunity to partner nationwide with Attorneys General on their common goal of protecting consumers from bad actors or companies that refuse to make the needed changes. "This is an industry that offers considerable value to consumers who wish to protect their investment in their vehicle. Unfortunately, however, the industry has been tarnished by the actions of some companies," said Larry Hecker, executive director of the VPA. "It is our goal that the VPA’s self-regulation process, coupled with continued scrutiny from outside consumer protection entities, will ensure that consumers are appropriately protected." Certification-Audit
Program Improves Industry Transparency Many VPA members are currently undergoing certification inspection. The certification process comprises a third-party compliance review that thoroughly evaluates the company's adherence to the VPA Standards of Conduct and applicable laws, rules and regulations. "We're very impressed with how the association’s members are aggressively and proactively changing their industry. The association’s rigorous certification process is focused on legal compliance and consumer protection,” noted Betty Montgomery, Former Attorney General from Ohio. “Firms that want to treat consumers right are eager to set themselves apart from those who don't, and the Certification-Audit Program is a great vehicle for doing so.” Industry
Standards of Conduct Set the Bar for Good Behavior "Our Standards of Conduct will be vigorously applied to help protect the best interests of the consumers," notes Hecker. "These Standards are part of a much larger VPA program that is underway to encourage industry members to comply with industry best practices and all applicable laws, rules and regulations. In the future, as a result of our efforts, consumers will know which vehicle service contract vendors they could and should work with and can then rest assured that they will be treated fairly by these vendors The Standards of Conduct are available to view at: http://www.vpanet.org/docs/VPA-Standards-of-Conduct.pdf November 10, 2009 Vehicle Protection Association Approves Industry Standards Adoption of industry standards defines a code of conduct for automotive service contract industry that will protect the best interests of the consumers. The Vehicle Protection Association (VPA), an association formed to promote regulatory transparency, education and accountability in the marketing and servicing automotive service contracts, announced today that it has adopted a set of industry standards. Click here to read this article With a new set of standards, the VPA has defined Standards of Conduct that will both help members to comply with federal and state laws and regulations as well as help to protect the best interests of the consumers. Members who violate the Standards of Conduct will lose their membership in the VPA. "These industry standards are more than a suggested guide for what companies should be doing; they are our guiding principles," said Larry Hecker, executive director of VPA. "While most of our members already adhere to these rules, the adoption of these guidelines will ensure that companies who wish to serve their customers best will be better able to do so." The adoption of these industry standards is one of several steps the VPA is taking to reform the industry's marketing practices. These standards include specific rules for advertising, representation of services, compliance with Federal Trade Commission and state regulations, compliant telemarketing, and a consumer complaint process, among other areas. "During this difficult economy, many Americans are holding on to the vehicles they have purchased instead of buying new on a regular basis. These same consumers rely on vehicle service contracts to help keep repair costs manageable," Hecker said. "It is vital that consumers can trust these contracts to protect some of their most valuable assets. Our industry standards offer an extra level of protection for consumers to reassure them that they can put their faith in our member companies." About the Vehicle Protection Association The
Vehicle Protection Association (VPA) is a not-for-profit trade association
representing firms that are active in the automotive service contract
industry. Members include service contract finance companies, marketers,
administrators, insurers, and software providers. VPA currently has
more than 50 members. The organization is committed to ensuring regulatory
compliance among members, educating consumers on their rights, protecting
consumers, and otherwise ensuring the integrity of the automotive service
contract industry. October 8, 2009 AA Auto Protection Leads the Way in Compliance In an effort to protect consumers from predatory companies, the FTC recently announced sweeping changes in the extended service contract industry. Strict new regulations are in place to combat misleading sales practices by some companies such as robo-call telemarketing, failure to accurately disclose coverage and posing as the manufacturer of a vehicle. Click here to read this article To avoid confusion and help consumers better understand services being offered, these new rules also forbid the use of certain terminology such as “warranty” within the industry. This includes use in company names, marketing and related material. As a result, industry leader AA Auto Warranty is changing its name to AA Auto Protection effective immediately and is working closely with the Vehicle Protection Association (VPA) and other member associations to better level the playing field and make sure all participants abide by the new rules. AA Auto Protection led the way in 2005 by being the first company to provide actual contracts for consumers to review online before purchasing. “We recognized years ago that the best way to make sure consumers fully understand exactly what they are purchasing is to show them the actual contract before they sign the agreement”, said Dan Rorapaugh CEO and founder of AA Auto Protection. “As a result, we have one of the best track records in our industry with the Better Business Bureau for a company that has been in business as long as we have. Sure, any company can show up on the scene and get an A+ record for a period of weeks or even months, but can they maintain an excellent track record for an extended period of time? That’s the real question. Since our first day in business, we’ve refused to utilize the misleading practices which have given much of the industry a bad reputation. We were thrilled to learn of these new regulations and welcome the prospect of providing even better service, not just for our customers, but for anyone who protects their vehicle with an extended service contract.” The Vehicle Protection Association (VPA) is a not-for-profit trade association representing firms that are active in the automotive service contract industry. Members include service contract marketers, administrators, payment processing companies, insurers, and software providers. The organization is committed to advocating regulatory compliance among member companies, educating consumers on their rights, protecting consumers, and otherwise ensuring the integrity of the automotive service contract industry. All members must pass a rigorous certification-audit process. AA Auto Protection is a subsidiary of Guardian Web Company, LLC and services all 50 states. For more information, please call 1.888.222.4445 or visit AAautoProtection.com. January 2, 2009 "Isn't it covered under my warranty?" This question is asked thousands of times a day in dealership service departments around the country. Click here to read this article
The federal government requires that car makers provide extended warranty coverage on emission systems. Many people assume that a car warranty entitles them to repairs regardless of environmental conditions, maintenance requirements, and/or length of time/number of miles on the vehicle. A car warranty is not an entitlement. It is an agreement between you and the car manufacturer! The purchaser of the warranty is responsible to follow the specified maintenance requirements set forth by the manufacturer. Then, and only then, is the manufacturer obligated to perform any repairs due to a defect from poor workmanship or a failed part for the time or mileage set forth by the terms of the warranty agreement. In recent years, because of some questionable practices by dealers, car manufacturers now scrutinize every warranty claim that comes across their desks. Such close inspection of warranty claims is interpreted by the consumer as an attempt to get out of covering a particular repair. AOL Autos: Best cars for winter However, in actuality, the repair may not qualify under the warranty terms due to a number of conditions, ranging from abuse of the vehicle, expiration of the warranty because of time or mileage, or an uncovered part as per the agreement. My advice to the buyer: Read your warranty agreement carefully, fulfill your part, and then you can expect the manufacturer to fulfill their part. Don't Miss
Some types of warranties Corrosion warranty: A type of warranty that covers rust-through perforation on sheet metal with actual holes. Surface corrosion from nicks, chips, and scratches are not covered (usually due to environmental conditions). Coverage varies with each manufacturer, so check your warranty information or check with your dealer for specific details on coverage. Emissions warranty: The federal government requires that car makers provide extended warranty coverage on emission systems to ensure lower tailpipe emissions. Typical coverage is seven to eight years and 70,000 to 80,000 miles. If you have a drivability problem on a late model vehicle, make sure to check with your dealer on emissions warranty coverage before paying for the repair. AOL Autos: Least-polluting cars Customized conversions: Some vehicles (usually vans and limos) are covered under separate warranties for the add-ons not installed by the manufacturer. Be sure to obtain a written warranty disclosure for the conversion when purchasing these types of vehicles. Make sure you (and your dealer) completely understand the 'ins and outs' of conversion vehicle warranties. I have witnessed nightmares resulting from misunderstandings when it's too late -- after the customer has taken delivery of the vehicle! AOL Autos: Luxury cars for families Hidden warranties: Also called "Goodwill Adjustments." Manufacturers sometimes allow their dealers or field reps to make "Goodwill Adjustments" once a vehicle is out of warranty time and/or mileage. Decisions to do so are based on certain criteria such as owner's loyalty, time the vehicle has been in service, maintenance records, vehicle history, mileage, and whether any service contracts are in effect. Customers may be asked to share some of the cost of the repair with the car maker in a "Goodwill Adjustment." Never be afraid to ask for assistance. You've got nothing to lose!! AOL Autos: 10 cars that sank Detroit Campaigns: Sometimes a car maker will embark on a "Campaign." This type of warranty is usually associated with a safety defect and is often a positive PR move. Campaigns can take the form of a repair or a warranty extension. Although it is not a recall, the campaign is either an agreement between the car maker and the NHTSA or it is a course of action the car maker has taken to ensure the safety of its customers without going to recall (to maintain good PR with the public). AOL Autos: 10 cars that could save Detroit Aftermarket: These items fall under their own manufacturers' warranties. For example, tires, after-market stereo systems, and conversion components are not made by the car maker and thus not covered under the vehicle warranty. You will usually find these warranties in the paper work you received at the time of vehicle delivery. Read the paperwork and educate yourself to avoid assumptions and misunderstandings! Make sure you know what's covered and by whom! With respect to new car warranties, it's important to understand that warranty repairs are a revenue source for the dealership. So when dealers refuse coverage, it's not because they want to. They simply cannot... based on the warranty agreement and the very strict adherence to the agreement expected by the manufacturers. Extended warranties (one of my favorite controversial topics) If you keep a vehicle beyond its warranty period, than I highly recommend an extended warranty. Consider the cost of repairs. The average transmission replacement is around $2,500. Engines cost in the neighborhood of $4,000. In-vehicle electronics can cost a small fortune. Be smart and get an extended warranty on a vehicle if you are going to keep it beyond the factory or dealer warranty. The arena of extended warranties has evolved in light years. Just fifteen years ago, extended warranties were either offered by the car makers or by obscure little companies selling a bill of goods, denying every claim that came into their 'call centers.' However, today companies like AIG, Allstate, and NAPA have thrown their hats into the ring, adding credibility and offering genuine coverage to motorists. The caveat here is to research the company before buying. Who is the warranty administrator? Do they have a good track record? Are they difficult to deal with? To whom should you ask these questions? The Service Department Manager or writer. These people work with extended warranty companies all the time and know who is reputable and who is not. Some companies offer tiered coverage depending on vehicle mileage, year, service description (how it's used), and condition of the vehicle at the time of contract purchase. Most extended warranty companies require that you have an in-depth inspection of the vehicle performed by a company-approved inspection station before they will allow coverage. This is understandable when you consider pre-existing conditions like engine or transmission wear/damage. Some companies offer plans with no deductibles or tiered deductibles. The method of payment of claims varies. Some plans allow for immediate payment to the service provider via the use of a company credit card. These are the best, because the service provider gets paid immediately and therefore is more willing to deal with the extended warranty company. Others plans require that you first pay the bill, and they reimburse you later after you send supporting documentation for the claim into their fulfillment department. The bottom line? Know whom you are dealing with before purchasing an extended warranty (and read the fine print). Tom Torbjornsen is a veteran of 37 years in the auto service industry, an automotive journalist registered with IMPA
August 25, 2008 AA Auto Warranty Joins the Automotive Warranty Services Association AA Auto Warranty, LLC., the leader in automotive extended warranties, is proud to announce that it is a founding member of the Automotive Warranty Services Association (AWSA). Click here to read this article AWSA was created by a group of warranty providers who are concerned about the direction of the auto warranty industry, and who are committed to a proactive approach to improving it. The aim of members of AWSA is to enhance the entire industry, by establish standards and by enforcing compliance to them. The ultimate goal is to universally improve the auto warranty industry for companies and customers alike. Warranty companies that do not adhere to the high standards of AWSA will be clearly distinguishable from those that do. The desired result is to provide consumers an easy, positive, and straightforward experience when shopping for a warranty. Click here to read this article As stated in their Preamble, AWSA has established guidelines to promote “the ethical conduct of business with consumers.” Among those pioneering guidelines is a Customer Bill of Rights. It states, in part, that “A customer has the right to:
Additionally, the AWSA guidelines address such diverse and important areas as advertising, telemarketing, refund policies, data collection, privacy, and consumer complaints. Click here to read this article Joining AWSA is “a necessary step to improving customer confidence. It also helps separate our company from the ones sending postcards, making cold calls, and misrepresenting who they are, what they do, what they cover, and what they cost,” said Dan Rorapaugh, CEO of AA Auto Warranty. “By being a part of AWSA, we want to help raise the bar in this business, which has definitely been lowered in the last few years. We also want our customers to know that we think we can be successful by being honest, low-pressure, and by just being professional,” adds Rorapaugh. AA Auto Warranty is pleased to join with the other members of AWSA to help protecting the auto warranty industry, and the millions of customers who benefit from its services. Click here to read this article For more information about AA Auto Warranty, visit http://www.aaautowarranty.com
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 |
