Is a Third-Party Vehicle Warranty Worth It?

When you purchase a vehicle, it usually comes with a limited warranty from the dealership. In addition to the dealer’s warranty, many car owners seek additional coverage form third-party companies. These extended warranties can be costly, but they cover more parts of the vehicle for more time and more miles than the basic dealership warranty. Unfortunately, making a claim on that warranty can be tricky, to say the least. That’s what one customer found out when she tried to make a claim on her car just one year into a four-year warranty.

A Premium Warranty

Leisha Wheeler wanted to make sure that her family car was covered for all kinds of repairs, so she bought a premium warranty form Endurance. Endurance is one of the largest third-party extended warranty companies in the nation, so she figured they were trustworthy. Her premium warranty cost $3,200, but gave her peace of mind, since it covered her for four years and 75,000 miles.

One of the components Leisha’s coverage included was the transmission. So when her car broke down just one year into her four-year warranty, she crossed her fingers and hoped it was the transmission. Sure enough, the report came back from the mechanic that the problem was with her transmission. Leisha was relieved since she knew the repairs would be covered under her expensive third-party warranty.

Coverage Denied

When Leisha went to Endurance to claim the repair, she was told that it wasn’t covered. What happened next was a runaround that is exploited by many third-party vehicle warranty insurers. She was told that the problem was not covered under her transmission warranty, because the problem was with her torque converter. Even though the torque converter is the main component of a transmission, Endurance claimed it was not an “inside the case” component, so it was not covered with her transmission. It was all in the details of how the warranty was written. But none of that was explained to Leisha when she bought the warranty and was told it included the transmission. But Leisha wasn’t going to be taken advantage of like that.

Leisha had her mechanic take apart the whole engine to determine the source of the damage. What they found was that the oil pump had failed, which caused the whole transmission to break down. But Endurance wouldn’t budge. So Leisha went on the offensive.

Scared Straight

Leisha went online and started to research Endurance. She found numerous complaints against the company. Determined not to be made a sucker, Leisha started recording her calls with Endurance. They continue to run her in circles, lying to her about what they had said and what they claimed she had said. At one point they even said that they would cover the damage, but later denied it. That’s when she sent Endurance the recordings of her conversations. They were caught in their lies, and she had the evidence. Shortly after she sent in the recordings, Leisha was told that the damage would be covered, including the torque converter.

We commend Leisha for her perseverance and quick thinking. Without those recordings, she may never have gotten the coverage she paid for. But that’s no way to run a business. Customers shouldn’t have to go to such extreme measures just to get the service they already paid for.

SpeeDee Oil Change and Auto Service expert Gerome Bernal told us he’s seen this done before. Tricky wording and disagreements over meaning can lead to a tough time getting coverage. That’s why he would personally never purchase a third-party extended warranty on a vehicle. So if you do plan on buying a third-party extended warranty, make sure you do your homework and check the company’s reputation before you buy. Also, make sure to read the fine print to decide if the warranty is really what you think it is.