Monday, June 09, 2008

Avoiding the "Auto Warranty" Scam

Dealerships often save this intimidating trick for customers with less than perfect credit. Please remember that even clients with the worst credit have rights. If you run into a finance manager who starts playing games with the APR... telling you that you must buy the extended warranty... or claiming that the APR goes up if you don't buy the warranty... run for the hills or ask them to put in writing. Tell them the contract must state that the warranty "is required to be approved for your loan"... so you can show it to your State Attorney and the Better Business Bureau. Watch how quickly they back off.

One of the best ways to avoid this situation altogether is not to finance at the dealership... especially if you have bad credit. Look for the best deal online or at a credit union and then search for an extended auto warranty separately online.

Many... like Auto Service Warranty... have 0% interest and zero-fee financing plans to match their already lower prices. Lastly... only the uniformed roll the financing of a warranty into a car loan. Over the life of the loan... you often end up paying two... if not three times the original cost.