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Do I need to purchase a vehicle warranty?

Do I need to purchase a vehicle warranty?

Is a vehicle warranty worthwhile?

"We have been trying to reach you about your car's extended warranty."

If this sounds familiar, you received one of the 17 billion robocalls that fell into the scam category in 2018. An increasing number of companies are turning to robocalls to reach out to clients and prospects. And these automated calls are leading to an increase in phone scams.

Robocalls increased by 60% in 2018. Although the Federal Communications Commission (FCC) is taking action to curb automated calls and protect consumers from scams, knowing that scammers have access to new ways of deceiving people can make you feel wary about purchasing certain services like a car warranty.

Do you need a car warranty?

If you purchase a new vehicle from a dealership, the vehicle will be protected by a warranty backed by the manufacturer. Those warranties typically cover any repairs outside of routine maintenance or replacing parts that are expected to wear, like brake pads.

Purchasing an extended warranty, a used vehicle warranty, or a roadside assistance policy will help you save money if you run into car troubles.

Tips to avoid scams

Due to the increase in robocalls and scams, it's best not to make purchases over the phone. If you receive automated calls, stay safe by never sharing your personal information, even if the caller knowns the make and model of your car. Purchasing services like car warranties over the phone creates a lack of transparency.

A few years ago, U.S. Fidelis was a popular choice for car warranties and insurance policies. The company used third-party telemarketers to reach out to potential clients. However, a pattern of complaints about unpaid claims and a difficult cancellation process resulted in an investigation. It turned out that U.S. Fidelis was relying on extremely deceptive practices that gave consumers the impression they were purchasing comprehensive warranties. They were also tricked into thinking they were purchasing warranties from dealers or manufacturers.

The U.S. Fidelis case illustrates that it's essential to find out who you are purchasing a warranty from and who is backing up the warranty.

What is the best way to purchase a car warranty?

You can purchase a vehicle warranty through a dealership, insurance company, or credit union. You can also get a service plan directly from your vehicle's manufacturer.

Remember before you make a decision, it is important to understand what the warranty covers. Go over the types of repairs covered, and find out when the warranty will expire.

Purchasing a warranty from a manufacturer or dealer tends to cost more. Credit First National Association recommends going through a credit union where you can typically find better prices. It's easier to talk to a representative, ask questions, and credit unions end to be more transparent and reliable while providing great customer service.

If you are wondering about alternatives for covering the cost of automotive repairs or need to pay for repairs that aren't covered by your current warranty, contact Credit First National Association to learn of the different automotive credit cards to finance repairs and maintenance.

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