Industry Tips
Auto Extended Service Agreements
The BBB routinely advises consumers to study the terms of automotive extended service contracts before making a purchasing decision.
Be sure your original understanding of the offer is reflected in the contract itself.
Be sure to clearly understand what repairs are covered.
Realize that some conditions, such as maintenance requirements, may severely limit the firm's payment for certain covered repairs.
Check whether the firm can cancel the policy and refund rights if this occurs, since many variations are possible.
Compare the service agreement to any other warranties covering the vehicle - such as through the manufacturer or dealer - to determine if it merely offers coverage that you already have.
Unless they take the form of insurance policies, extended service products are not licensed or regulated by the State of Ohio.
A number of companies offering automotive extended service products have gone out of business in recent years, often leaving customers with little recourse, so you may want to ask the company questions about financial reserves for payment of future claims.
