Analysis the news before buying an extended service agreement.
Consumers by the thousands report high-pressure sales calls about automobile extended-service agreements. Though the Federal Trade Commission identified this as a scam and warned consumers about it, there still may be some value in purchasing a legitimate extended service agreement.
Companies selling extended warranties insist that they're a good buy and save customers thousands in repairs. But thousands of complaints ConsumerAffairs.com indicate that extended warranties are not as wonderful as the sellers claim; the ConsumerAffairs.com detail a list of reasons that consumers should not buy an extended warranty---for vehicles or any other product.
FTC: It's A Scam
The FTC says such pitches are from businesses trying to sell extended warranties---more accurately known as service contracts. And if you buy one, you may find that the company behind it will soon be out of business.
"Certified Pre-Owned" Vehicles
Often, used car dealers advertise vehicles as "certified" and then try to sell you an extended warranty for an additional cost---it's not exactly illegal, but you are not buying a "certified pre-owned vehicle." Those are rigorously inspected according to manufacturers' standards, whereas an extended or aftermarket warranty can be purchased for just about any vehicle.
Warranties vs. Insurance
According to Edmunds.com, extended warranties are not actually warranties at all; as Consumer Teports cautions, extended warranties---in most states---are not insurance. They're not even warranties as defined by federal law---they are prepaid repair contracts. A true warranty is included in the price of a product, while an extended warranty is a service contract.
