How to Avoid the Worst Extended Auto Warranty Companies

To learn more about our editorial integrity policy and how we make money through affiliate partnerships, read our full disclosure here.

The worst extended auto warranty companies are known for poor business practices, pushy salespeople, and misleading contracts. You may have received a deceptive mailer or been harassed by a robocall yourself.

While the best extended auto warranty providers don’t engage in such practices, many other companies do. Read on to learn how to avoid scams and see what to do if you’ve already handed over your credit card information.

If you’re shopping for a warranty and want to see how much coverage would cost from a legitimate provider, start by comparing free quotes from our top recommended companies above.

Be wary of mailers. Not all companies that send offers by mail are scams, but many are. A common deception technique used by poor auto warranty companies is to send out notices that seem to be from your car dealership or manufacturer warning you that your coverage is about to expire.

Vehicle manufacturers and dealerships generally do not send mailers. A letter with the words “notice,” “final offer,” or anything similar should be regarded with suspicion. If you want to be sure the notice is not from the dealership, call and ask before sharing any privileged information.

Every manufacturer provides factory warranty coverage for new and certified pre-owned vehicles. Familiarize yourself with your manufacturer’s coverage so you don’t get duped into buying an extended service plan for a vehicle that is already protected.

Do be aware that some legitimate companies—including manufacturers themselves—may try to sell you extended coverage while your car is still under warranty. This is not a scam so long as it is clear that new coverage begins once your new car warranty expires.

Make sure you are the one doing the calling when you decide to purchase extended car warranty services. Don’t sign up for a vehicle protection plan because of an offer made to you by an unsolicited caller. Robocalling is a common practice used by the worst extended auto warranty companies.

Car manufacturers will not make unsolicited calls. If you want to purchase a manufacturer’s auto protection plan, sign up through the manufacturer’s website or visit a dealership yourself.

If you feel you are being bullied or rushed into making a purchase, hang up the phone or leave the dealership. Sellers with a quality product will not feel the need to rush customers into a decision. If your salesperson is rude or tries to discourage you from thinking too hard about your decision, stay away. Even if the provider is not necessarily one of the worst extended auto warranty companies on the market, rude salespeople are not a positive indication of how you’ll be treated as a customer down the line.

First, try dealing with the company directly. Many car warranty companies will offer prorated refunds. Legitimate companies may even offer a full refund if you express that you were misled by the person who sold your contract. If a company refuses to cancel your contract or makes canceling difficult, try filing a complaint through the BBB website. Many companies take their BBB profiles seriously and make an effort to address customer complaints.

You can also consider filing a complaint through the Federal Communications Commission (FCC). The FCC is responsible for regulating the telecommunications industry, so you might file a complaint about phishing phone calls or issues that occurred over email or the internet. If you choose this path, the company you complain about has 30 days to send you a response.

Another route for complaints is the Federal Trade Commission (FTC), which is responsible for protecting consumers in all industries. Historically, the FTC fines companies that violate the Telephone Consumer Protection Act. This tactic is not likely to be helpful with resolving your issue, but it could help establish a pattern of complaints that leads to an FTC intervention.

There are a few other calls you may want to make to protect your finances and personal information:

Basic research should be conducted on any company with which you intend to do business. A simple Google search is a good place to start. Be sure to check a company’s BBB profile. The BBB rates companies based on years in business, legality of business practices, customer complaint history, and how companies reply to these complaints. If a company is not rated by the BBB, that could be a negative sign.

Many reputable extended car warranty providers sell contracts that are backed by third-party administrators. Find out which company administers your contract, and do the same research to ensure it’s legitimate. If your provider’s plans are underwritten by an insurance company, check the AM Best financial strength rating of that insurer. This rating is a good indication of a company’s ability to pay out claims.

It would be difficult to provide an extensive list of every subpar car warranty company. But we are able to recommend some companies that are known to provide quality services and excellent pricing: Endurance, CARCHEX. These providers offer broad coverage options and allow you to service your vehicle at any repair shop certified by the National Institute for Automotive Service Excellence (ASE®).

Each provider offers mutiple levels of auto repair coverage and gives car owners perks like courtesy towing, roadside assistance, trip interruption coverage, and rental car reimbursement with all coverage plans.

You can learn more in our Endurance review and CARCHEX review.