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Who hasn't been in this situation? Tired of discovering -- at the worst possible time -- that the coverage isn't what you were promised?

It is difficult to lambaste an entire ‘industry’ but car warranty companies have some of the worst reputations of all business endeavors.

People have literally been left alongside the road with no assistance whatsoever. Even elderly people who completely depend upon the insurances they’ve purchased for their well-being whilst traveling have discovered that coverages vary greatly and when it comes to trust, it’s a Buyer Beware business.

Frankly, it’s perplexing that they’re allowed to continue defrauding people of their money only to discover they don’t have the coverages they were told they had.

Is CarShield Legit & Worth It? Or Is It A Ripoff? (2022 Update) (

Consumer Affairs excellent article on this topic provides excellent information and an inside track to understanding this issue. Please click the links herein to visit them!

Author pictureWritten by Chris Butsch 06/16/2023

Beware of scams – Check reviewsFind a good one

agent explaining car issues to lady customer

No two extended auto warranty companies are the same, even if they appear to sell similar products. Some are outright scams. Others never pick up the phone after you buy a policy, making them little more than scams with a business address.

And yet, some companies provide excellent customer service and save you thousands on auto repairs. So, how do you spot (and avoid) the worst extended auto warranties — legitimate or otherwise? Keep reading for advice on avoiding scams, what to look for when checking reviews and tips for finding quality auto warranty providers.

Key insights

  • Despite efforts by the Federal Trade Commission, extended warranty scams are still rampant in 2023. You can often avoid them by starting your research online and not purchasing a policy during an unsolicited call.
  • According to ConsumerAffairs reviewers, the lowest-rated extended auto warranty companies were aggressive in their initial sales approach, difficult to contact, slow to respond and quick to deny claims.
  • If you see similar comments in the reviews for a warranty company you’re considering, it may be smart to stay away.
  • To find a good auto warranty, start by looking at top-rated companies, and scrutinize your contract so you know what’s covered.

Watch out for car warranty scams

You may have already received robocalls warning that “your car’s warranty is about to expire.” While most people can see through these scam attempts — and the Federal Trade Commission is working to reduce their frequency — they still happen, and they’re getting sneakier.

Today’s auto warranty scammers may use your vehicle’s make, model and year to manipulate you into thinking they’re legitimate. They may also use caller ID spoofing to appear as a local number even when they’re halfway around the world.

Regardless of how their tactics evolve, there are still tips you can follow to help avoid car warranty scams:

  • Never give out personal details or payment information over the phone to an unverified number or caller.
  • If an unsolicited, prerecorded call asks you to dial a number to be connected to a live representative, hang up. Similarly, if a call starts with a generic question like, “Hi, can you hear me OK?” don’t speak. Just hang up. These are tactics scammers use to verify which phone numbers are active.
  • If you’re speaking to a live human and want to verify the legitimacy of their offer, ask to have it in writing. If they resist or refuse, it’s most likely a scam.
  • You can reduce the number of robocalls and unsolicited offers you receive by registering your phone number with the National Do Not Call Registry. However, this can take up to 31 days to take effect, and it might not deter dedicated scammers. You can also use settings and apps on your phone to stop unwanted spam calls.
  • Finally, the safest way to avoid getting scammed on an auto warranty is to ignore unsolicited offers entirely. Don’t let companies reach out to you and manipulate you into accepting a deal when you might find a better offer elsewhere.

» MORE: How to avoid car warranty scams

What to do if you’re scammed

If you believe you’ve been scammed by an extended auto warranty company, your first step is to determine whether you’ve truly been scammed or if there was simply a misunderstanding of your coverage. According to Allison Harrison, an attorney with experience in automotive law, “The first difference is really simple: Does the company exist?”

Scammers generally create just enough of a facade to lure victims in, but all of that can disappear once they have your money. Here are some telltale signs that you’ve been scammed by an illegitimate or nonexistent company:

  • You purchased the warranty during an unsolicited phone call.
  • You’ve attempted to call the number back, and it’s disconnected.
  • The company has little to no web presence (no reviews, no website, etc.).
  • The company lists a physical address, but you can’t find evidence of it actually being there.
  • You can’t find any employees on LinkedIn.

If your research indicates that you’ve been scammed, you should take two immediate steps to protect yourself and others:

  1. Notify your bank of the suspected scam and immediately freeze or cancel any forms of payment you shared with the scammer.
  2. File a complaint with the Federal Trade Commission.

However, not all disappointing warranty experiences are the result of scams, and the warning signs of a warranty scam may not alert you to an unreliable warranty provider.

Avoid the worst-rated extended auto warranty companies

It’s unfortunately common for people with legitimate auto warranties to feel like they’ve been scammed when their warranty companies deny their claims. These poor outcomes are often the result of buyers misunderstanding how warranties work or assuming their warranties cover more than they actually do.

Negative warranty experiences are often the result of buyers not knowing how warranties work or misinterpreting their coverage.

“There are a number of extended warranties that only cover major component parts (transmission or engine) but are not comprehensive (do not cover sensors, fuel pumps, etc.),” said Harrison, the attorney. She also advised that “the consumer should take time to review what is or is not covered by the auto warranty.”

That’s because even the most comprehensive warranties have exceptions. “I paid $3,000 for this warranty and have learned that it does not cover ignition coils,” wrote Vickie, a ConsumerAffairs reviewer from Tennessee. “This warranty also doesn’t cover a glove box mechanical problem because it’s considered ‘trim work’. I have learned my lesson and will not purchase an extended warranty in the future without doing my homework.”

Even when you do everything right, you can still have a negative experience if you’re doing business with a shady company. For example, some warranty companies will use any and every excuse to ignore or deny a valid claim.

These companies may not be outright scams, but their shady business practices and anti-consumer behavior can end in the same result for you — no payout. That’s why unreliable providers should be avoided with the same discretion as an actual scam.

So, how can you spot a bad warranty company before you buy? We looked over the most common user complaints for the lowest-rated extended auto warranty companies on our site to point out common red flags. As you shop for an extended warranty, it’s a good idea to read consumer reviews and keep an eye out for the following trends.Difficulty reaching a representativeDifficulty canceling for a partial refundGoing to great lengths to deny claimsPrioritizing sales over customer care

» LEARN: Car warranty vs. car insurance

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Find a good auto warranty company

Not every extended auto warranty purchase ends in a cautionary tale. A solid warranty from a reputable company can save you time, stress and money. You can dramatically increase your chances of success by taking some time to research your purchase.

Here are four steps to help you find a good extended auto warranty:

  1. Understand what an extended auto warranty actually does. Contrary to popular belief, extended warranties don’t cover all failures and breakdowns. Make sure you know what you’re buying when you sign up.
  2. Read reviews to find the best companies. Reviews from other consumers are arguably your best source of information when you’re evaluating a warranty company’s trustworthiness. Look for reports of good customer service and approved claims.
  3. Choose the right coverage. Even a reputable company can sell you more than you need. Balance your budget with your risk tolerance to find coverage you’re comfortable with.
  4. Ask questions to clarify what’s covered (and what’s not). Getting answers to any questions you may have should provide peace of mind and prevent expensive surprises later.