Common Extended Warranty Scams:
Financing Approval -- Some dealerships will claim that you must purchase a warranty in order to be approved for financing. This is a blatant lie. The two have nothing to do with one another and you are probably better off walking out of the dealership right there if they try to pull this one over you.
Warranty Telemarketers -- If your number is on the National Do Not Call Registry and you receive a call attempting to sell you an extended auto warranty, then what they are doing is illegal. The legalities, or lack thereof, aside, warranties marketed through telemarketing are notorious for being scams. If you are on the Do Not Call Registry, a company may only call you if you have specifically agreed to receive calls from them. Report them to the Federal Trade Commission (FTC) if you do receive a telemarketing call pushing extended auto warranties
Personal/Sensitive Information -- If they ask for highly sensitive information, like a bank account, Social Security number or driver's license number, then they are overstepping their bounds. They do not need any of this information to sell you a warranty and by providing it you leave yourself vulnerable to other fraudulent activities.
Buy It Now -- Some dealers will attempt to pressure you into buying an extended warranty from them immediately after purchasing the car; they will claim that a warranty can only be bought right then and will never be offered again at a future date. This is another bold-faced lie. While it is true that extended warranties tend to be cheaper the earlier you buy, there is no rule written in stone stating that you have to extend it immediately. Walk away from these scammers and find a more reputable company to purchase an extended warranty from at a future date.
Little or Shady History -- There are plenty of companies offering to sell extended warranties. Some companies have little background history solidifying their reputation; others have a history pebbled with consumer complaints and poor customer service. It is true that you might be passing up a younger, cheaper, perfectly legit company, but it is almost always safer to take the beaten path. Choose a warranty company that has built a solid reputation over the years and provides good service.Be sure to check them out with the Better Business Bureau. Even if they cost a little more, it will be worth it if you actually need to file a claim.