Extended Warranty is a SCAM! (Insider Knowledge)

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”Intro Music by Karl Casey @ White Bat Audio”
Thanks to Jesse for making the intro and graphic for us to enjoy!!

[EKHBLOVER]

You are scamming everyone Ray! You make money from your customers cars plus YOU MAKE MONEY BY RECORDING THEIR VEHICLE in a video. Without customers permission. And you don’t pay the customers for using their vehicle. You make money of YouTube and overpriced work from your shop. but you want to talk about extended warranty’s. Get a grip man.

[TheEnthusiastMechanic]

I worked for a warranty company and let me tell you it's the same as insurance companies trying to save every penny! They only want to approve the cheapest of the cheapest parts and only want to pay a minimum for labor costs.You're better off saving that money for a rainy day fund for the repairs in your car.

[richb.]

The last two used vehicles I bought I paid cash for them. No warranty, no BS. I take them in for service when they need it, my own "warranty".

[ubercdr]

We bought an extended warranty when we bought a Ford Super Duty. About a year or so later, one of the leaf spring u-bolts broke on a trip. We took it to a shop, they called the warranty company and the warranty company reported that they had no record of our information on file. After some heated calls to the dealership, they claimed that they were transitioning to a different warranty company when we bought the vehicle and they gave us the wrong paperwork. Long story short, we had to pay for the repairs since that dealership was either incompetent or just straight up pocketed the money. Just another reason extended warranties are a scam.

[billschlafer]

Nailed it Ray. Scummy behavior like this from dealers, warranty, and insurance companies is shameful. Glad there are few people like you who are not afraid to tell the truth about these scammers.

[BuzzKillingtonne]

I had an extended warranty once that covered all gaskets and seals. The rear main seal blew within a day of ownership and the dealer replaced it without going through warranty. A few days after getting the car back it blew again, this time it had to go through the warranty, well turns out they didn't cover it because it was found the PCV system was the cause and they didn't cover the PCV system, so thus they wouldn't cover the rear main seal.

years later my wife found herself working for the warranty company as a data entry person, the warranty company/insurance company is owned by a guy who owns four dealerships in the area. Never again with extended warranty.

[PowerStrokeTechTalkwARod]

...these places wind up cheating the manufacturer & the honest paying customer out of thousands. Its real & it happens daily.

[paulwindisch]

Certified Pre-Owned warranties that are backed by the MFG are good, they are essentially an extension of the factory warranty. The next up are the warranties that are extended but also backed by the MFG. GM was GMPP (not sure if it still is) and Ford and Chrysler have them as well. They were always generally pleasant to work with and usually paid whatever the shop rate was for labor. As a transmission tech, on rare occasions they would opt for a good used trans (same or less mileage as the original that came out of the car) that they would also warranty for the duration of the policy. Most labor operation numbers we could just perform without inspection. They would send an adjuster out for major assembly repairs (internal engine, transmission or transfer case mostly).

The rest of the aftermarket warranties for the most part were a dumpster fire. A couple of them were okay but I can’t remember which ones. Most of these companies would cover seals and gaskets, but would exclude Cadillac Northstar head gaskets (I was a tech at a Cadillac dealer). Total waste of money.

I will say though, at the three GM dealers for which I worked, they only sold CPO or GMPP warranties. Any of our customers that had something else were swindled by an aftermarket warranty company making cold calls.

[waynefoutz]

My mother bought one for her Kia at the Kia dealership. Her repair claims usually get claimed, but they have the car for days before the repairs are authorized, because the warranty company disputes it every damned time. Then the repairs are always at least ten times more expensive than it would cost me to do it in my driveway.

[Columbus]

My brother just fell into this kind of muck. He was interested in a used mini van, when he went to test drive it the check engine light came on during the test drive so the salesman said they would check it out and come back tomorrow. The next day the salesman said it was a battery problem so they replaced it, what happens when you disconnect the battery? It erases all fault codes. My brother took it out and it ran OK, it was "detailed and shiny" so he bought it, no extended warranty. About two weeks later the check engine light was on again, so he brought it to his trusted mechanic (should have done that before putting down the money), he diagnosed it as a failing catalytic converter. I think the dealer paid for some of it, but it sounds suspiciously as Ray said.

[RobertPeterson-vzok]

I'm glad you posted this video. Pulling back the curtain on some dealership shady practices is a good thing. I used to be a service advisor and was actually told no to needed repairs because they wanted the money from either the customer or the warranty company. Hell, I've been told to raise the labor cost on the owner of a dealership neighbor. Because the neighbor had the money so why not right. It made me sick to hear that.

[georgeweisbrod]

My mess. VW Passat quit. No restart. Towed 258 miles back to dealer. Diagnosis - key in the camshaft sheered and engine quit.
Yes, bent valves and grenaded piston. Claim denied since the failed part (key for camgear) was not a oil lubricated part. Two years later "good faith" settlement, repairs was new used tested engine lawyer fees and $2k aggravation and lack of use.

[Mountainbaseddweller]

Manufacturer back extended warranties are typically good. Ford extended care being one of them. The third party ones like CarShield are hot garbage.

[mistsemy]

That a great organized scam for the dealership. This video need to go viral.

[HowardOlmstead-pp]

I spent 12 1/2 years as a F & I (finance an insurance manager, by far the most profitable position in the entire at a Ford dealership, the owners asked me to sell 3rd party warranties I refused 😮
Years later while still working there the owner family were so happy I refused to sell crap 💩
Their customer satisfaction was the highest in the Delaware, Southern New Jersey and Philadelphia area out of 37 dealerships!!!

Stay true to yourself, profit is not a dirty word but scamming people should have jail time enforcement 🎉

[mrsmith]

I bought a used truck from a big deal ship. Got the extended warranty, felt good.... Lol. Very shortly after(week or so), it was starting to over heat. Took it to a place that would work on the truck with the warranty. They looked it over told me "Radiator is clogged and they did a cleaning on it(Turns out that's all they were authorized to do from the warranty)." Truck started to over heat again, so I took it to the dealership. Dealership told me they think I have a blown head gasket. Called Warranty about it, they said the dealership needs to break down the engine and 100% confirm this is true because they would replace the engine. Said if that was not the issue, I would have to pay for the repair. I knew the person working on the engine and I trusted what they said.

Dealership broke down the engine and confirmed it. Warranty REFUSED to pay for the engine and said it was my fault for driving around with the truck over heating. They didn't care that I brought it to a mechanic shop(who did warranty work), said it was my fault it over heated. So I got stuck with the bill of the dealership work of breaking the engine down. I had to go and buy another engine and put it in my self. I paid around 2k for their warranty, and was able to get them to refund me a "partial" payment of around 900$.

Worst experience for my first time buying from a dealership and first time getting a Warranty. Would never do it again.

[davidday]

I bought an extended warranty when I bought and financed a used car from a dealership. Before reaching the maximum miles covered by the warranty I had the vehicle inspected at another dealership ( car was in for a recall) to see if anything was needed before the warranty expired. A couple of small items were found and the shop contacted the warranty company. To my surprise, I discovered the first dealership hadn't sent the money to the warranty company to purchase coverage. This is a big deal and very illegal. I reached out to the dealership several times and once they knew the issue, nobody would talk to me, probably fearing legal action. Then, they quietly repaid the amount of the coverage to the finance company. I'm lucky I was a friend of a friend of the dealership owner and would drop his name, otherwise I might not of even received the refund. I. considered reporting this to law enforcement but just wanted to be done with this place. Funny thing is, I just received another marketing email from them 8 years later.

[ronhansen]

This one hits home. I bought a supposed "Certified Used Car" 2020 Nissan Sentra SL for my grandson from a dealer in Homosassa, FL. I got GAP insurance, extended warranty, everything that would "protect" me, since it was technically my car. We brought it in for it's first service (oil change, etc) which cost me $198. Along with that, they gave me an estimate of "suggested" items to repair. It hit almost every section of the car for a total of over $4000 on a "certified" car, none of which was covered. Obviously, I declined all repairs. There is a bright side (or dark, based on your perspective). A couple of months later, the car was stolen and totaled, paid for by the insurance company and GAP insurance. In addition, the dealer had to request a refund on the extended warranty policy. Over all, it wound up costing me a couple of thousand dollars, mostly in car payments to resolve this mess. They don't call them Stealerships for nothing.

[humaux]

This is also why you have a mechanic you trust inspect any car BEFORE you buy it.

[smarouchoc]

100% agree. I took a used car i was thinking of buying to an independent repair only shop only a mile from the selling dealership once.... on a $4000 car (it was a while ago) they found over $2000 in repairs needed. The dealer actually tried to tell me to buy the extended warranty and wait the 30 days and it could get "taken care of." I walked.