Extended Warranties

mitzij

Of course you've seen few problems, Mr. not-a-salesman who has sold thousands of contracts. The problems show up when customers make claims. You, as the broker, have no contact with the customer after you sell the contract.

The customer is stuck with the Administrator, or claims adjuster. This is when the customer learns all of the fine print of their crap contract. Granted, the customer should have read the contract thoroughly before purchase, but the sales system is set up to discourage this act. The telemarketers urge people to buy the contract NOW, not after they've read it. The websites bury the actual contracts as much as possible, causing most people to read the big letters, and think service contracts will pay for everything that goes wrong with their cars.

I recently had 'fun' with a service contract company. A customer came in, needed a water pump. We called the SCC and were faxed a questionnaire. After answering 20 questions about the customer's driving habits, engine type, transmission type, business/personal use, quality of the oil, quality of the transmission fluid, we waited a day to get an answerback. Then we were allowed to fax over the quote. Another day passed and we got the OK to fix, but the water pump was too pricey for them, they would only pay $120.00 for the pump, the customer had to eat the balance (about $60). Customer's ticked off now, he tries to cancel his contract. This was his first claim. Company says: can't cancel-no money back, tough.
We finally get paid, via credit card, the following Tuesday.

GMPP, the manufacturer backed service contract I deal with works alongside my warranty claims-no fuss, no muss. I'd much rather work with them than any aftermarket plan.

mikefm58

Well said, you've said it much better than I could as you have real life experiences of working with these garbage companies day after day. That is a typical example of how a claim would go for a customer. Of course the customer is ticked, they have every right to be, and you just happen to be the bearer of bad news. He things he's getting screwed and thinks that you're in on it too. I don't envy you, having to work with these garbage companies.

The one garbage company I did mention, Warranty Gold, was forbidden to do business in several states, including my state of Florida. Yet, they continued to sell garbage policies over the internet. But the laws were toothless and expensive to enforce, so these garbage companies got away with it.

Did I say these companies are garbage and sell garbage policies?

deltheking

Hey rnixon,U joined on April 8th and started posting on April 9th for your company.
Please take your stories elsewhere.Everyone knows u are a troll here.3rd party warranties are worthless POS,,garbage.
Never pay any claims--big frauds and cheats.Check BBB for the ratings.
Folks here know much better ..Take your advertising somewhere else.These companies do not even show the contract before purchase.
So buyers beware,,,any edmunds member will tell u-- always buy the manufacturer factory warranty.

rnixon

You know what, I'm not going to banter back and forth with you, I can match you blow for blow over manufacturers not covering as well as aftermarkets covering. It depends on aftermarket warranty company. And by the way don't appreciate insenusation that i'm a salesman when I've clearly stated I am not and never have been. I'd be willing to bet I have more time dealing with service problems than you. I have run everything in a car dealership and a powersports dealership that there is to run, but never was a salesman. I know service and I know a good service writer or service manager, whichever submits claims in a particular dealership, makes the difference on how things are handled. By the way, I do intimately know the problems of dealing with all warranty issues SINCE IT WAS MY JOB! The companies I use don't give me any 'crap' because I picked GOOD companies to do business with, not fly by nighters. And see what happens with your GMPP when GM files bankruptcy next month and one of the companies I use was named one of the 100 best run companies in the U.S. I'm willing to put my name on a business and take the consequences because I believe in and have proof of how good things are with the companies I use. You do neither and have neither. Good luck with a bankrupt GM warranty.

rnixon

Hey deltheking, one of my companies was named one of best 100 run companies in U.S. and I've worked with them for 11 years in a Cadillac and Ford Dealership.
Now what is it you've done again? Bankrupt GM and possible bankrupt Chrysler inspires what kind of consequence? You need to figure out what your talking about before you embarrass yourself more.

mikefm58

Hey deltheking, one of my companies was named one of best 100 run companies in U.S. and I've worked with them for 11 years in a Cadillac and Ford Dealership. Now what is it you've done again? Bankrupt GM and possible bankrupt Chrysler inspires what kind of consequence? You need to figure out what your talking about before you embarrass yourself more.

Warranty Gold was also a highly rated company before the real truth came out. All AM warranty companies are in the same boat. You're the only one embarrassing yourself here. Please go away and don't come back.

rnixon

Yea, again, I never used them and wouldn't let them into the dealership when they approached me about trying to get a foothold into this state and then tried to give me a little 'extra incentive' to do so. See I do my homework, because I don't like surprises, so try again to down someone or something of which you know nothing about. By the way, not going away. People have a right to hear from someone besides people who apparantly are bitter because they either can't read their contract, be it manufacturer or aftermarket or simply don't want to follow the rules like the rest of us. Because in our business we do both and don't seem to have these issues, and as I've said before, I think I've probably seen more than anyone else here.

rnixon

By the way, forgot to say, warranty gold was never highly rated. When I checked them out, they weren't even in top 25, so shame on you for trying to make it sound different than it was.

golic

I thought you were sending me the contract? Send it to my user name at carspace dot com...

deltheking

Everyone knows that an after market warranty is worthless crap.Warranty Gold was a top rated company before it busted.Check BBB on that.
So what aftermarket warranty do u recommend?Please let us know!! :lemon:
Give us this aftermarket warranty`s name and details-- and u can help edmunds folks here!!
Folks would like to know the coverage policies,,right,,,before they it,,or don`t they?
So ,,please please please give us the details of this 3rd party warranty!!! :confuse:
Please do a favor and give us the info!! :shades:

Kirstie_H

No matter how much you dislike someone's opinion, personally-directed comments are NOT permitted.
Quit embarrassing yourselves by telling others to quit embarrassing themselves.

Also, NO member has the right to tell another member to go away. Regardless of how right you think you are and how long you've been here, the Forums belong to Edmunds.com.

Any more posts containing personally-directed comments will be removed.

mikefm58

When I checked them out, they weren't even in top 25, so shame on you for trying to make it sound different than it was.

Don't know when you checked them out and I never did say they were top 25. But when I checked them out, they had a good rating, then went bankrupt a couple years later. There was a forum here specifically set up for their members that got burned and there were many of us.

mikefm58

Everyone knows that an after market warranty is worthless crap

I don't think everyone knows as they are still selling warranties. I wish everyone did know so they could all go out of business. I remember the after market warranty I bought for my first computer. Their 800 number was an endless wait.

mitzij

Most service contract companies tout how they've been 'in the automotive business' for XX number of years. Sometimes they have a 'combined' total number of years they've have been in the biz. If I add up the people I work with, our 30 year old dealership has over 200 years experience!

I had a customer come in with one: Consumer Direct Warranty Services. I visit their website. The first screen that comes up says 'we do not sell warranties to consumers directly. if you have trouble with the person who sold you this contract, contact them.' The broker that sells these contracts has a similar disclaimer 'we don't administer 'em, we just sell 'em. if you have a problem, contact the administrator'. Handy little catch-22 for the customer, eh?

Incidentally, the broker website pretends to be a 'consumer advocate' site that 'reviews' service contracts. They warn people 'don't buy one backed by a risk retention group', but if you read some of the contracts, several are backed by RRGs!

Another 'consumer advocate' site used to advertise for OneSource. How wonderful they were, they always paid claims, were highly rated by AMBest. Then they went out of business. (you've heard that song before) Now the 'Advocate' has a big disclaimer about how it's not his fault people bought contracts based on his recommendation. He was a victim, too! 'Course, he's a well-paid victim and those who relied on his advice are just hung out to dry.

mikefm58

As golic has mentioned, I too would like to read your contract or visit the website that you posted a few days ago. I went to try and find your post, but it looks like it was removed by our gracious hosts. Maybe it was a violation of the T&S here? My email addy is in my public profile, please send me whatever information I would need to review your product.

mitzij

Yeah, think of how many people we've talked off the ledge on this thread. And those who swear by service contracts! They've had just enough positive experience with these companies that they refuse to see the pitfalls. That, or they don't handle money well and would rather leave it with a third party to 'take care of them' instead of taking care of their finances one their own.

Sure, a service contract will buy you a new window motor, but just wait till it's a big repair. Need an engine? Have fun waiting (without a loaner car) until the adjuster gets around to inspecting your vehicle. Good luck proving you changed your oil every 3/3000 when you've had you vehicle for 6 years and the engine craps out. Oh, and, another thing, they can send you a used engine from their own scrapyard to install in your vehicle. It's all in the contract, baby.

buck43

There are a lot of crap companies out there, but there are actually some very good ones online, but you have to do your research. Factory programs may offer the best in coverage and service, but dealers make so much money in selling them, you'd better get good results. Dealers make anywhere from $800 to $1200 average on a sale.
Keys when looking online; First, program must be directly backed by A rated insurance company, full information available directly on the site like getting a quote on your vehicle, chance to review the sample agreement, plus it has to be a cancelable and transferable agreement. Any site that requires you to call, or have someone call you with basic information is a warning sign, these are high pressure closers, and the costs of coverage is higher to pay them commission. Any site that offers coverage for older and higher mileage cars has to charge more to protect against guaranteed losses.
As far as a rating system, there isn't one. If a site says top rated by so and so, this is probably a sponsored and paid for rating system.
Instead of grouping all factory programs together and all aftermarket programs together, maybe we need to keep focused on which particular ones are definitely not worth considering, and which ones are.

mitzij

The handful of reliable companies I've found are priced high to the point where self-insurance is the financially sound course of action.
A well-maintained vehicle is unlikely to have problems to the point that a third party needs to be brought in to take care of them. It's like Vegas, only in Vegas, you get to have fun while spending your money.

lissaa

I now have almost 34,000 miles on my 2007 GMC Acadia and it's time to buy an extended warranty. I decided a few months ago that I was going to buy a GM Warranty because I was worried about the smaller warranty companies going out of business. Now I have to worry about GM going out of business! Any suggestions?

buck43

I wonder what GM would charge for their warranty. I did find a pretty good third party program online called BestOptionOnline.com, free quotes, good coverage, good rates and backed by A rated insurance company. Not sure if they are in every state, and I think a car can't be too old to qualify.

rnixon

I tried, wouldn't let me do attachment, If you'll send me alternate email on my website, I will attach and send.

mitzij

What plan did you buy? How much and for how long?

I checked out the site. Their contract is the usual loop-hole filled dreck. I really like the part that says their total paid claims will be no more than the amount you paid for the contract. Their exclusion list is a bit longer than average. At least they are direct, putting the 'we can require used parts' part in bold.

wlbrown9

You can get discounted GMPP pricing on-line. On that I know of is gmoutlet.com. Black Pontic Cadillac in Pennsylvania I believe. IIRC their pricing is about 75% of list. I think there are a couple of other dealers that sell genuine GMPP plans at a discount as well.

rnixon

buck 43 is right, there are some 'crap companies' out there and GM may end up being one of them, since bankruptcy is not a possibility, but and eminent outcome.
As I've said repeatedly here, I have only 2 companies to choose from, because I did my homework and picked ones I have personal experience with and trust. Not because they say they'll pay, but because they have paid and honored everything they said they would over 11 years of history. See, I always had more than one company that I trusted because I want the ability to play one against the other when it comes to claims. They want to do business with me, so they bend over backwards to make sure my customers are happy. That's why I started Auto Finance Services, I'm not associated with a dealer now, but I've the warranty companies that the best dealers have at their disposal. I don't have to make $800 to $1200 per warranty, I'm happy making 15% of what they make and doing volume. That get's you repeat business and referral business, I would much rather have that than complaints. I openly invite you to submit to site and then call dealer and see the difference, I'm confident enough in myself to handle any questions or scrutiny.

buck43

I was concerned over what you said on how much they pay so I re-read the agreement. The most they pay for repairs is what you paid for the vehicle, not the agreement! That makes sense. Plus used parts are common in all cases, they do that if you have a wreck and need a new hood, door, etc. And the exclusions are mostly items like belts, hoses, filters, etc., plus mirrors, trim, etc. Seems like great coverage for the cost. I have a similar vehicle, 2006 Trailblazer with only 38,000 miles, I bought 3 more years and 45,000 miles of coverage for $1,005, nobody had the same coverage for less.

mitzij

You might be right. It's either poor grammar, or a sneaky loophole.

However the total of all benefits paid or payable under this Agreement and limits of liability therunder shall not exceed the price of the Agreement Holder paid for said covered vehicle.

It's one of those little things that can become a big problem.
If you think the SCCs don't keep track of how much money they've forked out for each contract, you've got an education coming. It's much harder to get covered repairs paid for the closer you get to the $$ you paid for the contract.

A used hood is normal (and also not covered by this agreement), a used alternator, engine, or transmission is not, unless I have control over where the part comes from.

rnixon

Warranty companies are not worried about how much someone pays for a warranty, they are concerned about their overall loss payout. For most companies that loss payout is about 80 to 85% payout. Over that they start raising prices, but they are contractionally liable to pay for what they have agreed to. And if some reason they get over 100% on payout their reinsurance company picks up the difference, until fund gets back down to a manageable level. That's the difference in the companies now and 20 years ago when a lot of companies weren't reinsured and had to file ch 11 when they became insolvent. This is the same thing the manufacurer warranties do, most reputable companies insured by one of 5 big reinsurance companies. Such as Lloyds of London, Chubb and BOA.

mitzij

Reinsurance covers the company, it does nothing for the customers holding contracts. It covers the rear end of the owners of the service contract company. Reinsurance has been no help to people who bought OneSource, Warranty Gold, or, what was that one last fall? Heritage? I think it was Heritage. These aren't bankruptcies from 20 years ago, these are within the last few years.

As with the aforementioned Consumer Direct Warranty Services-the administrator, seller, 'affiliate', and owner are all buddies. It's a big shell game.

The guy who owned Warranty Gold has a new SCC. (what's it name, again, Mike?) He played the shell game, hung people out to dry, and came out of it scott free. Now he's in it again because it's so dang profitable. It's like shooting fish in a barrel.
Convince people their cars WILL break down, that they NEED you help, that the $$ is low (really we promise)

You've been a service writer, you know you can tell when a customer is close to his limit with a SCC. The phone call is longer, you're put on hold a few times while the adjuster 'checks coverage'. You're more likely to be asked to install a 'part from our warehouse', or be told that that part is just too expensive. We have a very low labor rate, so I haven't had that problem, yet, but I'm sure there's more dickering about labor rate the closer the customer gets to the 'magic number'.

buck43

Not really poor grammer, but they have to state these things as clearly (and legally worded) as possible, just like a car insurance policy. That was my point, if you damage your car in an accident, your car insurance company isn't going to repair it if it's more than the cost of the car. They can give you the choice to use used (remanufactured)versus new, you may only need to pay the difference, and you may think it's worth it to do so.

rnixon

Of course reinsurance covers the company. So that the company can remain solvent and pay claims. That's the whole idea of reinsurance.
With companies I use, I notice no difference, and I never have. I have one particular customer that has used up FOUR times his warranty cost and they didn't even send an inspector out for the last $1600 repair. Our labor rate payout is much better than the manufacturers' rate that they will pay. We had one dealer that just jumped $15.00 per hour and they never even bickered about it.
No doubt there are bad people out there, but there are also a lot of good ones. If I wasn't sure of it I would sell it. I've seen Ford warranty come out and look for reasons to deny big claims, especially on diesels. And if they looked, they usually found! Whether it was real or not.

mitzij

However the total of all benefits paid or payable under this Agreement and limits of liability therunder shall not exceed the price of the Agreement Holder paid for said covered vehicle.

I'm not looking at the legal mumbo jumbo part. I'm looking at that 'the price of the agreement' part. The 'of' either should not be there, and is a typo; or it's there on purpose to confuse the situation-causing a loophole. Take your pick.

Of course reinsurance covers the company. So that the company can remain solvent and pay claims. That's the whole idea of reinsurance.

Tell that to the many people holding worthless contracts after these companies go bankrupt. Every one I listed earlier was 'reinsured'; a couple by RRGs and the most recent was reinsured by a real, live insurance company! It mean bupkus to the consumer. The insurer is usually a related company to the main service contract seller. The reinsurer is to keep the owners from being financially damaged-they don't care about the contract holders. This was a lesson learned during the whole Warranty Gold debacle, which is not such a very old situation.

For every one customer who gets benefit greater than the cost of his contract, there are 10 others who have no claims, and therefore, little (or no, depending on how you define it) benefit.

As for Ford ESP-their field claims adjusters are most likely freelancers who travel around inspecting vehicles for any company willing to pay. The adjusters who have come through here are all looking to deny claims-it's their job. The lower the claims paid, the more money they make.

In all the years you've handled claims as a service advisor, you never had a flake company? Besides, the manufacturer-backed plans, which, of course, are junk.

rnixon

Only a couple and they were quickly discarded, but I always found if you pushed hard enough and talked to enough people up the ladder we got everything paid, with a very few exceptions. When we did what we supposed to and called up front and got permission in writing there was very little arguing a point.
Part of that was knowing our primary warranty companies and holding them accountable to insure future business. That's why I always have had at least two primary warranty companies available. If you do enough business, they will not let you down for fear of losing out, especially in a prolific warranty production environment. The squeaky wheel gets the grease and I've always been the squeaky wheel.

deltheking

Hi Folks,,
Again ,as said before by many members-- 3rd party warranty is crap and uselless.
Always go with the Manufacturer Factory warranty that u can buy at the local new car dealer .Or you can buy buy it from any dealer online.
Too many guys have been burnt by 3rd party warranties.Maybe 1 in a 1000 is legit.So 999 times out of 1000 u will be ripped off.Take your pick :confuse:

See all previous posts in this thread as to why factory original warranty is infinitely better.Occasionally we get guys who prop up these 3rd party warranties--- most probably an agent for them!! :shades:

rnixon

Again, I kind find someone bitter about every product you own in your house, that YOU love and think is fantastic. And again bankrupt GM and bought out Chrysler or companies that have been good enough at their business to not ask for or receive government money. Just being able to stay in business for 35 or 40 CONTINUOUS years without interruption or bailouts. Gee, who's 'crap' now.

jipster

And again bankrupt GM and bought out Chrysler or companies that have been good enough at their business to not ask for or receive government money.

President Obama is backing G.M and Chrysler warranties with that big sack of money he's been carrying around. So, even if those domestics do go bankrupt Obama will pay for any repairs covered under warranty.

rnixon

Well, if you trust that socialist [non-permissible content removed] to take care of you, good luck. No one can help you. Unless we WANT warranty companies run like the post office and Washington DC, that works well!

mikefm58

However the total of all benefits paid or payable under this Agreement and limits of liability therunder shall not exceed the price of the Agreement Holder paid for said covered vehicle.

I ain't no English expert but whoever wrote that sentence probably never made it out of the 5th grade. Therunder is not a word in the English language and you're right, the "of" should not be there. This contract would be a dream for a policy holder's lawyer as basic contract law principles go against the party that wrote the contract if parts of the contract are vague and not clear.

I would expect that phrase to be something along this line:

"However the total of all benefits paid or payable under this Agreement and limits of liability shall not exceed the price the Agreement Holder paid for said covered vehicle. "

And I'm still waiting for the email from you rnixon, so I can take a look at the website you posted earlier that was removed. My email addy is in my public profile.

ppborceb

In addition to the 10yr/100k power train warranty, Hyundai offers a bumper-to-bumper 10yr/100k warranty, and I was wondering if anyone has purchased this type of extended warranty from the manufacturer and what was their experience.

rnixon

Actually thereunder is a word, it means 'under that', it's an old english word used in a lot of legal documents to make inclusive, some previous writings.

mikefm58

thereunder

Yep, it is a word, I couldn't find it because it was mis-spelled in the contract clause.

deltheking

Folks here are passionate about avoiding 3rd party warranty as many of them were burnt.Doesn`t matter ,even if a poster like u recommends a 3rd party warranty folks here are much much wiser than that.
Even Edmunds had recommended a 3rd party warranty before,, which went bust.
Why don't u email your great 3rd party warr. website?? :mad:
If GM and Chrysler go bankrupt- do you think these 3rd party warr. would cover them?Hell no.They would then have a clause-- ''since GM went bankrupt we do not honor any warr. on a bankrupt Manufacturer as they no longer would be having any parts or TSB updates etc etc''-- Do u get the drift?? :confuse:
And please,, no knowledgeable member here on Edmunds will recommend a 3rd party warr.

And yes,,,the best ext. warr-- is a original manufacturer factory warr. :shades:

golic

rnixon...you just won me over. Great post - I am on your side.

jipster

So, you'd rather have one of your third party warranties over a U.S government backed warranty. LOL... you've just lost all credibility with me.

rnixon

That's ridiculous, of course they would honor them. You're seriously reaching to try and make that conclusion. GM will not stop making cars and parts, they will cut back on expenses and cut back on coverage and labor cost. But they will not be completely out of business, although they will never be practicing the same broken business model. They will not be the same, they will have to start running like a business instead of a government entity.

rnixon

Hell yes, do you seriously want to government to tell you is something broken needs to be fixed! Ask England how they like that scenario in their health care system, where if you have some forms of breast cancer you're told you have to wait up to a year to receive treatment. Talk about a loss of credibility, you're nuts if you want the U.S. government to take care of anything for you. Who exactly can you go after if they don't want to pay claims? Who pays for your claims? You do, in the form of tax dollars. I don't know about the rest of you but I don't want to pay jipster's warranty claims. I pay for my own protection, and not from a government who doesn't really care about whether you want to do business with them in the future, but from a company that wants to earn my business and keep it for future autos.

mitzij

I reckon GM's bankruptcy will be along the lines of how the airlines did it-more of a restructuring than a 'going out of business'. Service contract holders will not be left holding the bag. Aftermarket companies get by with it because there's little press or pressure to take care of the consumers. With the way our tax system is structured-they can screw people over legally. The chorus of 'it's not my responsibility' was deafening during the Warranty Gold dissollution, and the contract holders were stuck.

GM will be under the media microscope-if they try to flake out, there will be heck to pay.

rnixon

When exactly was the last time GMPP was mentioned in the news? They will cut services because they have to, and no one will notice or care. There is too much other, more pressing things going on to worry about than that. If you think that they're not going to cut back, you're crazy. Anyway you slice it GMPP is and has always been an extended warranty company. The only difference from any other is that it was sponsored by a manufacturer. It is still a business.
People keep yelling 'Warranty Gold', well they are gone. I never used them, yet everyone wants to equate all aftermarkets with them, and it's just not true.
As I said before, Ford ESP looks for reasons to deny warranties, I have companies that I used in 2 ford stores instead of ESP, for that reason. On top of that ESPs were about 30% higher in cost. And although GMPP paid a little better than Ford, I guarentee you with GM under the gun after this CH. 11, that to will change.

deltheking

People keep yelling 'Warranty Gold', well they are gone. I never used them, yet everyone wants to equate all aftermarkets with them, and it's just not true.

People keep saying ""Rnixon Warranty"",well they are gone.Yet its just not true.

How do u know GM will not be bankrupt? :confuse: Insider contact with GM CEO ,I suppose.So this is a vast auto wing conspiracy between you and GM.Hush,hush,ssshhhhh,silence please!!!!!

Once again,Factory warranty is always better than a fly by night 3rd party warranty like warranty Gold!!Sorry , couldn`t resist.
These 3rd party warranties try to scam people of their hard earned money and create hell for them.

By the way,Rnixon,we are still waiting on your warr.website or details info! :lemon:
Please send a PM if u will!!!

rnixon

I don't really understand what you just wrote, it rambles too much. I've told you before if you want to log on to website at autofinanceservices.org and give me an email address that I can put attachments on I'll be glad to send you the coverage. I've tried to put attachment in and it tells me it's too big.
Again, had just as much trouble from 'manufacturers' warranties as any other. I can't argue with manufacturer because they are more cut and dry on their decisions. My warranty companies have flexibility, not cut and dry on everything.

lissaa

I just received a price of $1279 for 48/72,000 which will take me up to 106,500 miles. That has a $200 deductible which is fine with me because I've seldom had to use my extended warranties in the past. I'm not sure how far they go back on their warranties.