We've reported that extended warranty scammers (boiler room operations taking thousands of dollars for zero actual coverage) have invaded the Internet and pissed all over the national "do not call" list (at 4am). According to Automotive News [AN, sub], the extended warranty grift is giving franchised dealers conniptions. "Paul Broome, a Cadillac dealer in Independence, Mo., hears from about 10 customers a month who complain about his dealership's high-pressure sales of service contracts. But Broome has nothing to do with the disputed contracts or their marketing. Instead, some peddlers of third-party contracts tap vehicle registration data to reach customers of dealerships such as Broome's by telephone, e-mail and direct mail." The AN article focuses on Missouri, whose Attorney General is pursuing the miscreants. But the scam is sweeping the nation. Still. Question: why haven't dealers and manufacturers sent a pro-active warning to their customers?
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It’s unclear why this entry’s title calls attention to Cadillac. A representative from a Cadillac dealer — one of the many brands that this scam seems to affect — happens to be the one quoted. That seems to be the extent of the connection. Is this something affecting Cadillac dealers (and owners) in a unique way?
Question: why haven’t dealers and manufacturers sent a pro-active warning to their customers?
Probably because most people wouldn’t listen…
I’ve removed the reference to Cadillac in the headline, as it does seem misleading. No slur on Cadillac was intended.
Heh, I just got another one of those calls this weekend 5am Saturday morning. I was quite angry about it so I pressed “1” to talk to a sales specialist and told him to wait a second then I put him on speaker phone and went back to bed. It took him a half hour to hang up. My favorite was after about 10 minutes or so he said “are you coming back?” I hope I screwed up his profits for the day by bringing his calls/hour down.
I think this may be affecting dealers of all brands as my wife was inundated with warranty scam calls when her Mini warranty was about to expire.
However, not all extended warranties are scams. Years ago I bought a used E36 BMW 328is from Carmax and their third party warranty was excellent and saved me a small fortune when repairs were required. (Paradoxically this was the most unreliable car I ever owned as well as one of my favorites).
Mr. Farago — glad to see you made the change.
My parents received a (in my opinion, questionable) phone call about an extended warranty for their ’02 Saturn four-door, which they did not buy new. My wife was receiving (probably legitimate) mail correspondence about an extended warranty for her ’05 Subaru Impreza, which she did bought new. But so far, nobody’s called or mailed me to offer such a service for my ’95 Toyota Celica, which, with 211,000+ miles on the odometer, is the only one of the three that actually could use the help. … ;-)
Heh, I just got another one of those calls this weekend 5am Saturday morning. I was quite angry about it so I pressed “1″ to talk to a sales specialist and told him to wait a second then I put him on speaker phone and went back to bed. It took him a half hour to hang up. My favorite was after about 10 minutes or so he said “are you coming back?” I hope I screwed up his profits for the day by bringing his calls/hour down.
I got a call like that , put them on hold (my phone has really annoying hold music) and took the dog for a walk
They call me all the time. I wait for a live rep. Then I ask them how they’re gonna extend my warranty that lapsed TWENTY-THREE years ago!
A friend of mine has a 1999 Lexus LS that is just going off warranty. He got a call and offer to extend it, and he accepted. I told him about these scams, but he seems unconcerned.
Time will tell.
It’s only natural for dealerships to be outraged about con artists taking advantage of people who fear their car will need costly repairs. Peddling grossly overpriced service contracts is a major profit center for dealers.
However, not all extended warranties are scams. Years ago I bought a used E36 BMW 328is from Carmax and their third party warranty was excellent and saved me a small fortune when repairs were required.
That’s the way I went with my Saab at Carmax. I was rather impressed with their whole routine and how quickly/efficiently my no-pressure purchase went. Although I only wish that once I bought the car, the fee I paid to transfer the vehicle into town should have been refunded.
Glad to hear the warranty is worth it, since my Saab just passed out of original coverage.
50merc:
Peddling grossly overpriced service contracts is a major profit center for dealers.
That depends on how much you value piece of mind or a stable car cost budget. And yes, years ago, many dealer sold extended warranty contracts were slimy. Now, they’re pretty solid. Pricey, but solid.