The consumer protection movement really took off in the 1960s and 1970s, when state governments (and the federal, too) began creating agencies charged with fighting scammers and ripoff artists operating in the marketplace. The public took to this new attitude wholeheartedly, and local and network news programs began hiring consumer advocates who would take on scofflaw firms on behalf of individuals and the public at large. The result is a very high awareness in American society of the rights of consumers and the proper operation of businesses.
The Internet has not changed, but amplified the situation. Today there is such an avalanche of information that it can be difficult to know what is true and what is not. This has made the job of consumer advocates even more involved, in government and media as well as in private firms doing “consumer reports” in print and on the Web. It is particularly important for consumers to take time and exercise caution with the purchases that loom largest in our lives, namely, houses (the most expensive thing most people will ever buy) and vehicles (the second-most costly for most folks).
How to tell good from bad
There are some general rules of both business and human behavior that come into play in all kinds of interactions, particularly economic ones. The basic common sense that you would use to determine truth or falsehood also apply when you are researching the companies behind the car warranties that you are being offered as you shop for your new ride. The first thing to remember, of course, is not to hurry. You do not just go out and buy the first car you like and add the first warranty you are offered. In fact, you have to leave enough time to research the dealers, the cars and the warranties that you may decide to buy.
When looking for a good car dealer, you start, of course, with referrals, and then branch out to newspaper ads, the Web and window-shopping. As you start making a list of possible purchases, note also the names of the dealers and start checking them out with the Better Business Bureau (BBB) and online complaint sites. Then you need to check out each specific car you like, with Carfax or another reporting service. Finally, after you have sat down with a salesperson, you should request copies of any extended warranties that are on offer (and if you cannot get one, take your business elsewhere).
Then do it all again
When you have a complete list (dealers, specific cars, warranty provider names) you can return to your first step, research, and plug in what you’ve learned. When it comes to the dealer and the car, you use your own good sense as well as that of a mechanic friend or hireling. When it comes down to rating the extended warranty firms, that will take a bit more digging, but it is worth it. Remember, too, that it is absolutely in the interests of reputable warranty companies for you to do this. The car warranty industry, like any other, has had its share of miscreants, and is quite serious about driving the fly-by-night firms out of town (better yet, out of business).
What do you look for? For one thing, transparency. Just as you should beware of dealers who will not show you a Carfax report or give you a copy of an extended warranty, you should avoid warranty firms that will not answer questions on the phone or send you more information. In addition, you will check the company names with the BBB, consumer reporting sites, government oversight agencies and, of course, the handy-dandy Internet. All you have to do is enter the name of the company followed by the word complaints, and you should get all kinds of information, especially on the questionable firms that get the vast majority of consumer complaints.
Bottom line
Again, it really is in the best interests of reputable extended warranty firms for you to take the time to check them out. Do not let the salesperson at any dealership, new or used, tell you that you can only buy one particular warranty package. The fact is, you can buy your extended warranty from any company that you like. This will be a result of the research you do, as well as your own good sense and the solid advice of more experienced auto and insurance people. In fact, your insurance agent can also be a good resource for you, so run the facts and figures by your agent if they have experience in the area.
Bottom line? Do not just use your head. Use the heads and experience of all kinds of folks who know more about it than you do. Although it takes a little time, you will be glad you did when you save 30-40% over the dealer’s offer with a solid, dependable third-party warranty firm.
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