Car Warranty Scams

The person on the phone will often know details such as the make and model of your vehicle, which can make the pitch sound plausible. Such information is public and can be obtained from state motor vehicle records or purchased from data-collection companies.  

Numerous as they are, scam calls aren’t the only way con artists try to get vehicle owners to pay up or provide personal information. Some mail out fake warranty expiration notices, designed to look as if they were sent by manufacturers or state motor vehicle bureaus, with a toll-free number for auto owners to call.  

There are legitimate service contracts that can help if you’re worried about being able to afford major repairs on an aging car. Look at brand-name providers with long track records, such as your car’s manufacturer or the American Automobile Association, better known as the AAA.  

Make sure you understand what is and isn’t covered, and how claims are reimbursed, before you buy. If you are interested in a plan, approach the provider directly. Any unsolicited warranty offer is almost certainly a scam.

Warning Signs

• A call or mailing says it’s urgent for you to take immediate action to continue your car’s warranty coverage.
• An outside company offers to extend the factory warranty, something only the vehicle’s manufacturer can do.

How to protect yourself from this scam

• Do consider installing a call-blocking app on your smartphone. Such apps use reports from users, the Federal Trade Commission (FTC) and other sources to predict which calls are likely scams or spam.
• Do attach a call-blocking device to your landline, if you still have one. These devices can block numbers of known scammers and weed out robocalls by prompting callers to press a number to continue.
• Do check on anyone who claims to be calling from the dealership where you bought your vehicle. Hang up and call the number listed on the dealer’s website or the purchase paperwork.
• Do check the expiration date for the manufacturer’s warranty and the terms for extending that coverage before you consider buying coverage from an outside provider.
• Do research a company offering extended coverage — for example, check the Better Business Bureau listings for complaints — and carefully read the fine print on any contract to see exactly what it covers and how long it lasts.
• Do put your phone numbers on the FTC's National Do Not Call Registry. Legit companies won't call you if you're on the registry unless you've specifically authorized them to do so, so you'll know an unsolicited car-warranty call is almost certainly a scam. 

• Don’t answer a call if you don’t recognize the number. Let it go to voicemail.
• Don’t assume a call is on the level because caller ID shows the name of your vehicle’s manufacturer or something like “auto warranty department.” Scammers can use spoofing tools to display whatever name or number they choose as the caller ID.
• Don’t follow instructions to press a number on your phone to avoid future unwanted calls. Scammers do this to confirm they’ve reached a working number they can call again.
• Don’t provide personal information such as a credit card or driver’s license number unless you’ve verified that you’re talking to someone from a legitimate company that you already have a business relationship with.

More Resources

• Report auto warranty scam calls to the Federal Trade Commission, the Federal Communications Commission and your state’s attorney general.
• File a complaint with the Better Business Bureau to help alert other consumers about scam warranty companies.
• The AAA offers an online checklist of what to look for in a vehicle service contract.