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Thinking about buying an auto service contract?

You may think buying an auto service contract can help ease the burden of costly repairs. While a service contract might sound like a good idea, it could duplicate coverage you have through your manufacturer’s warranty. And you might actually pay more for a service contract than you get back in benefits. What’s more, some companies pitching warranty extensions are scammers. Read on to learn more.

An auto service contract is a contract to pay for some repairs or services. Service contracts are sometimes called an “extended warranty, but they’re not a warranty as defined by federal law. They’re sold by car manufacturers, dealers, and independent companies. You can buy them anytime.

Do some research before deciding whether to buy an auto service contract.  

  • You don’t need (or want) duplicate coverage. Check your existing auto warranty coverage first.
  • The more coverage, the higher the cost. Pricing can range from several hundred dollars to several thousand. You also may need to pay a deductible each time your car is serviced or repaired.
  • Look for exclusions that deny coverage for any reason, or tell you where your car has to be serviced.

Learn to spot the scammers. If you’ve ever gotten calls, texts, or mail warning that your warranty is about to expire, the companies behind the messages may give the impression they represent your car dealer or manufacturer when, in fact, they’re likely trying to sell you a service contract. The truth is

  • they probably have nothing to do with your car dealer or manufacturer
  • if you respond, you’re likely to get pressured to give them personal financial information and a down payment right away, before you get any details about the service contract
  • if you buy a service contract from one of these companies, you may find they won’t be in business when you need to use it.

Learn more about buying and owning a car.

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The purpose of this blog and its comments section is to inform readers about Federal Trade Commission activity, and share information to help them avoid, report, and recover from fraud, scams, and bad business practices. Your thoughts, ideas, and concerns are welcome, and we encourage comments. But keep in mind, this is a moderated blog. We review all comments before they are posted, and we won’t post comments that don’t comply with our commenting policy. We expect commenters to treat each other and the blog writers with respect.

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April 21, 2023

since march 06 2023....... no one will help me.... well Nissan Consumer Affairs, Carfax, the salesman Mosuam, Boulus the finance manager or the sales manager who lied about his name being Oscar....I think its Oscorza.... I bought a used 2015 Toyota Prius for $19,991....or at least i taught that was the listed price ..and taxes and other finance fees of course I'm not challenging that...maybe $26,000 total the most. but the next day I picked up the contract and car with realized the total itemized total price was $34,000. never left the dealer lot and i told them ...but i've been ignored as soon as the keys were handed to me.... I was very unfairly treated and mislead ...lied to...they finessed me and inflated my income to add..... and sneak over $9,000 over the listed price overpriced. .... ! With optional that are not optional or clearly not explained or even disclosed. I've tried to get help from them and its useless it's been a month and regret ever going there!.... I really did trust them... it was my first time getting a car from a dealer.... now I'm worst off.... it sucks when someone robs you by what is assumed to be legal an honest business! if this is not illegal business practices..... what they are doing,,,,, i don't know what's more like thugs in suits. Ill never ever go to Los Angeles...... universal city Nissan. It's a bad place to go .....They just don't know what someone is going thru in their already everyday struggles....... they should not mess with people like that it is not cool...... I'm sure it's illegal they cleverly finesse guys should really look into their business practices to find out for yourselves...............................! Citizens will surely appreciate it... I'm so exhausted with these people at Universal city nissan! you guys should know this..... before someone really gets mad.....with them.........its not cool what they are doing!

Margaret Devaney
May 24, 2023

I bought a vehicle service contract from Endurance .paid 3kplus over 3 year for a 5 year warranty. When I had to have a repair done on my car , thy refuse to honor the warranty.saying that my initial odometer reading I gave was not correct .
This has to be a company that scams consumers
What can I done to get my repair bill covered or my money back?
Mepco took money out of my account every month .
Thanks for any help you can give