Friday, March 14, 2014

Do some leg work before you purchase an auto warranty

We receive a number of complaints from consumers regarding auto warranties, warranty premium refund guarantees, and loan gap waivers sold by car dealerships. Unfortunately, we get the calls after consumers encounter a problem with the warranty they purchased.

Generally these types of products are offered at the time of the vehicle’s sale and consumers may feel pressured to buy these types of warranties without really understanding what they are getting. The cost of these types of warranties is often added to the loan amount, which increases the amount you borrow, your monthly payment and the warranty price because you interest on it over the life of the loan.

While we are not finance experts, we do recommend that consumers contact their insurance agent or our consumer advocates before deciding to buy these products. Consumers can call or email us to discuss the product; consumers can see whether or the warranties are properly registered to sell plans in Washington by searching our company or agent lookup.

Remember, you have 10 days under state law to revoke your purchase of any warranty and receive a full refund. After 30 days, the company may prorate your refund.

Many consumers don’t know that you can request your insurance agent add a debt waiver or loan balance payoff coverage to your insurance policy when you buy a new car. This type of insurance protects you if your car is “totaled” (called a “total loss” by your insurer) and you owe more than its current market value. If you are in the market for a vehicle, it’s always a good to discuss your insurance options with your agent before you buy anything.

Read more about auto insurance.

Read more about warranties and service contracts.