Purchasing a car warranty can feel like a safety net, especially for older vehicles. Olivia Lee, a meticulous owner of a 2001 Volvo with 158,000 miles, thought so too. Inspired by a CarShield commercial, she decided to invest in this extended protection, hoping for peace of mind. CarShield, a prominent national company, markets these warranties, with a significant portion – around 95% – underwritten by American Auto Shield. They promise comprehensive coverage and flexible monthly plans, aiming to provide “coverage on your terms.”
CarShield emphasizes customer satisfaction, with attorney Mike Carter stating their complaint percentage is lower than many companies, at just “two-tenths of a percent given our value of business.” However, a deeper look reveals a more complex picture.
Olivia Lee learned a tough lesson about the complexities of extended car warranties. (WGCL)
Despite CarShield’s claims, both CarShield and American Auto Shield have faced scrutiny from the Better Business Bureau (BBB). In 2021, the BBB issued an alert for American Auto Shield due to a “pattern of complaints.” Prior to that, CarShield received a similar alert and an “F” rating in 2020 for “misleading sales and advertising practices,” which CarShield contested with a lawsuit, alleging BBB bias.
Olivia Lee’s experience highlights some of these potential issues. When her transmission failed, her claim was approved, and she could choose her mechanic, King’s Automotive. However, the process became complicated involving CarShield, American Auto Shield, and the repair shop. Upon getting her car back, it wasn’t working correctly. The mechanic claimed warranty approval for a salvaged transmission, a claim CarShield denies, stating they “don’t do salvaged transmissions.” Despite the mechanic’s attempts with two salvaged transmissions, neither worked. CarShield paid the shop $2,000, but Lee was left with an inoperable vehicle.
Frustrated after months without a working car, Lee independently purchased a rebuilt transmission and had it installed by AAMCO, spending over $3,200 to get her Volvo running again. Consumer investigator Better Call Harry intervened, leading to a partial refund of $700 from King’s Automotive. CarShield, while initially maintaining the issue was with the repair shop, eventually reimbursed Lee as well, stating they followed contract terms.
Key Takeaways When Considering Car Warranties:
- Pre-purchase Inspection is Crucial: Before committing to any aftermarket car warranty, have a trusted mechanic perform a thorough pre-purchase inspection. This is a wise step even without warranty considerations.
- Maintain Your Vehicle and Records: Consistent car maintenance and meticulous record-keeping are essential, regardless of warranty coverage.
- Control Claim Payments: If a warranty claim is approved, request the check be sent directly to you. This allows you to pay the repair shop only upon satisfactory completion of the work.
While extended car warranties like CarShield can offer potential benefits, it’s vital to understand the complexities and do thorough research. Knowing who accepts CarShield and understanding the claims process are crucial steps before making a purchase decision. Consider these takeaways to navigate the world of car warranties and protect yourself from potential pitfalls.
