Car Dealership

8 Tips to Avoid Car Warranty Scams

When many consumers hear the phrase “auto warranty,” the first thing that comes to mind are the scams they’ve read or heard about in media reports. But the truth is, in uncertain times when people are concerned about their financial futures, vehicle service contracts can save your customers money on potential costly repairs. Providing the option for aftermarket vehicle service contracts from reputable vehicle service contract companies provides an additional sales incentive. 

Choosing an Auto Service Contract Provider

Auto dealers who offer an inventory for pre-owned vehicles often find it challenging to identify reliable vehicle service contract providers that will provide protection for their entire inventory. Some pre-owned autos are more difficult to find coverage for than others, and as a result, the sales staff has no additional incentive to offer potential customers. To find the best vehicle service contract companies, you’ll need one that goes beyond age and mileage limitations and offers coverage for any make or model.

The Ugly Secret Behind Car Warranty Scams

It’s crucial that the provider you choose stands behind their contracts and delivers the coverage promised. Unfortunately, not all vehicle service contract administrators deliver what they sell. Many of these companies are fly-by-night operations that disappear after a few years. They go bankrupt because they never intended to stay in business in the first place. Your first clue that there’s no longer a company to provide payment on the contracted service coverage occurs after they’re long gone, leaving behind angry, frustrated customers and unpaid repair bills.

Eight Ways Dealers Can Avoid the Scams

The average car on the road today is around 11 years old. Not only are people hanging on to their cars longer, they expect the pre-owned vehicles they purchase to last. Extended service contracts are essential in today’s car markets, but only if they come from a reliable provider.

  1. Choose an established provider. Their website should provide a list of the plans, coverage-specific information for each one, prominent contact information, and verifiable company or corporate information.
  2. Check with local consumer protection agencies like the Better Business Bureau, state insurance commissions, or your state’s Attorney General’s office for any complaints filed against the company.
  3. Research customer approval ratings to determine how the provider treats customers. Google Business Reviews is a good indicator of customer satisfaction ratings, which should be the top priority of any provider you choose.
  4. Look for evidence of new product development and programs that correspond with the changing financial and automobile sales markets.
  5. Ask other dealers and repair facilities about their experiences with extended service contract providers.
  6. Steer clear from high-pressure, aggressive sales pitches from a provider.
  7. Compare and contrast the prices and features of different vehicle service contract providers. Those priced too high or too low or those that make unrealistic promises could be scam operators.
  8. Before choosing an auto service contracts provider, determine whether or not you’d choose this provider for yourself, a family member, friend, or business associate. If the answer is “no,” then this is not the provider you should choose.

Transparency and Exceptional Customer Service

Freedom Warranty LLC is constantly evolving to meet the needs of its customers, whether it’s providing coverage that will support dealers’ service goals and sales numbers or making sure customers are getting what they were promised. Learn more about the extended vehicle service contract plans we offer. Fill out the convenient request form available on our website at We’ll immediately text videos to your cell that provide more information about our plans.