Web vigilantes vs. extended auto warranty robo-callers on clarkhoward.com

If you're like most Americans, you've probably received a robo-call about buying an extended auto warranty.

The Wall Street Journal reports that a group of web vigilantes decided to take on at least one of the operations bugging people. Before we go any further, please know that Clark is not recommending this vigilante action.

Word of the guerrilla campaign spread through a website called ReddIt.com. One specific target of the effort was Auto One Warranty Specialists Inc., located in Irvine, California.

The vigilantes essentially filled up the company's phones with junk calls so they couldn't place anymore outgoing calls. As one vigilante told The Wall Street Journal, "If you get a bunch of people together, you could blow up their voice mailboxes."

The owner of Auto One says 90% of the people who went vigilante were never contacted by his company. Ah yes, but he hires third-party companies to make the calls!

This owner is a known criminal who was convicted in 2000 of mail fraud and tax evasion. He declined to discuss his criminal history with The Wall Street Journal.

Meanwhile, the FTC recently filed a lawsuit against 3 similar operations -- 2 in Florida and 1 in Illinois.

The FTC's suit alleges the 3 companies made over a billion calls since 2007, generating over $10 million from people who didn't even have expired warranties. They're also accused of illegally blocking caller ID; calling people on the federal Do Not Call list; and blanket-calling area codes in metro areas where people don't even own cars.

Let's take a moment and review about warranties. Clark is not a fan of extended warranties in general, and he's only neutral when it comes to car warranties specifically.

If you can afford the potential cost of a car repair, you should never buy an extended warranty. But if you're unable to budget and save for repairs, then you should only consider buying the manufacturer's own warranty. Do not buy a third party warranty.

And if you stick to Consumer Reports' annual recommended list of vehicles, you shouldn't have to buy an extended warranty at all -- even if you have budgeting difficulties. The odds are such that their recommended vehicles won't have severe problems over time.

Editor's note: This segment originally aired in May 2009.

What others are saying

Auto Warranty over the Phone
Just got a call from a company today by phone; all sounded good according to what was said; my vehicle is 9 years old and has approx 108k miles. The rep went on about how older cars over 100k miles typically can't get warranties. Was told that 5 years coverage would be about $354 a year and he went on and on about everything that is covered.
I asked to have a copy of the info as to what is covered/not covered mailed to me for review (i.e. I want to read all the fine print); or if I could find it online.
Was told that this company does not have website and that I could review the policy but that I would have to make a downpayment first and if I didn't like the policy could cancel in 30 days. I repeatedly stated that I would not purchase a warranty unless I could read all the particulars "in advance". Company rep just kept stating that they didn't do it that way. I finally told her (I was transferred to someone else at this point) that obviously if they couldn't send me info to read in advance, then it wasn't the company for me....she hung up on me.
Can't recall the full name of this company, but started with National something.
Anyone out there had a call from this outfit and what do you know about them?
By maureena @ 11/11/09 03:51:00 PMreport abuse
RE: 3rd Party Auto Warranties
I am the poster on 08.15.09 discussing the 2nd extended warranty on my 2001 Lexus. Last weeek, at just over 130k miles, I had a rear main oil seal leak that cost $1,700 to fix (almost all labor). This was completely paid by my warranty company. The warranty company even sent out an adjuster to verify the claim prior to approving.

In total covered repairs so far, I have been paid back the full cost of my warranty, plus $456. In addition, I still have approximately 29,500 miles left on this warranty or 20 more months, whichever comes first.

Again, do your research extensively before you purchase an extended auto warranty. To get an "exclusionary" warranty, you generally need to purchase before 50k miles. To get a decent "stated coverage" warranty, this generally needs to be purchased before 100k miles.

Another thing to look out for, make sure the "Limit of Liability" clause in the service agreement do not put too low of limits. Some agreements that I have read put a total aggregate liability of $6000. Some even breakdown costs in each category ($3000 engine, $2200 transmission, etc.) Stay away from this as the costs to repair could be more than that.

All of the service agreements will have some limit of liability. My agreement states that each repair visit cannot exceed the NADA trade-in value of my car (currently $8,650) And the total payout (aggregate) off all claims cannot exceed the original purchase price of my car (which was $23,700).

I have done very well with my current and previous extended warranties. Both have the same administrator (very well known also for electronic /TV warranties as well). Do your homework - a lot of it - before purchasing. Have your dealership / repair shop service advisor fully review to give his opinion. Lastly, READ and UNDERSTAND EVERY LITTLE DETAIL in the contract so you know what your are getting!!!!
By RS @ 10/29/09 02:09:03 PMreport abuse
Auto one warranty
That company is a fraud company not only is the owner and old fraudster but he is back at it again. they take your money and when and if you need to use your warranty they dont pay for the repairs and if you cancel it they dont give you a refund like you are told. i tried for 10 months and never got my refund until i contacted my local news stations and they were able to do it for me! they need to be closed down and the owner needs to go to jail for this!
By Paige @ 08/28/09 01:08:46 PMreport abuse
Useful
Useful post.....

---------------------------------------------

[url=http://www.thebestcarwarranty.com/] Extended Auto Warranty [/url] - [url=http://www.thebestcarwarranty.com/] Used Car Warranty Provider [/url] - [url=http://www.thebestcarwarranty.com/] Automotive Warranty Service [/url]
By thebestcarwarranty @ 08/22/09 01:51:50 AMreport abuse
Nice
Very Interesting and useful post....

---------------------------------------------

Extended Auto Warranty - Used Car Warranty -
Automotive Warranty Service
By Automotive Warranty Service - Used Car Warranty - Extended Auto Warranty @ 08/22/09 01:50:25 AMreport abuse
Extended warranty
Have purchased 2 Chrysler vehicles in the last 18 months. They have the factory lifetime engine and trans warranty. Also bought a lifetime bumper to bumper warranty for $2500.00 and $3000.00 for my second car. Only $100 deductable per time in the shop no matter how mant items being fixed. Only exclusions are the normal wear items like tires & brakes. I tend to keep my cars 7+ years and these 2 new ones will be passed to my 2 kids when they turn 16 in 4-5 years. Figured a lifetime warranty would be good for a 10 year old car driven by a teenager.
By crosseyed @ 08/15/09 09:40:11 PMreport abuse
3rd Party Auto Warranties
You need to do your research to find a good one.

I bought my 2001 Lexus with 48,000 miles on it (2k left on the OEM warranty). I researched and bought a 3rd party "exclusionary" warranty for $1393, which covered me up to 100k miles or 5 years. By the time my warranty expired I had $4,500 in covered warranty work done (mostly all labor to get to the part that was bad).

Just under 100k miles, I bought another warranty (“stated” warranty, which lists out what parts are covered - not as good due to high miles). I had my service advisor review the coverage before I bought it. It covers me up to 160k miles and cost $2,300 - so far used about $950 in warranty work. I have 33k miles left in the warranty. I know that my car is notorious for having transmission problems around 100k miles ($4k to replace). This warranty has the same warranty administrator as the last one. As you can see, they are very good with covering repairs.

Remember, the repairs need to be legitimate. If you do not service your car according to the OEM schedule, YOU may be causing the repairs by neglect. Do not expect the warranty company to cover repairs if you do not maintain your vehicle properly.

I would not recommend a warranty that is backed by a “risk retention group” - ask if it is are or not - Google this for more info.

Get “Bumper to bumper” coverage or also called “exclusionary“. (this depends if it is offered due to the amount of miles or age of your car) Usually you can get this if you are still under the factory warranty.
Get wear and tear coverage - not just “mechanical breakdown”

Pay extra for a lower or no deductible - you will benefit from this is the long run

BEFORE you buy the warranty, review the coverage with a fine tooth comb Have your service rep or repair person review the coverage also and give his/her opinion.

Don’t assume the extended warranty from the dealer is better - the one I looked at was NOT. It was a “stated” coverage, not “exclusionary” - It was also more expensive.

Make sure the warranty company will pay the repair shop directly (with a credit card) and not you paying it first and submitting reimbursement.

Lastly, when you do research - take the reviews with a grain of salt. Some people may not have had something covered for a legitimate reason (part failed due to corrosion, neglect, etc.) They scream rip-off anyway.

There are no links to buy anything in my comments.. I am not selling anything here. I do not sell warranties and I am not in the industry at all. I have nothing to gain, other than to try to help. I am just tired of seeing people get ripped off. A lot of people out there do not have a conscience.
By RS @ 08/15/09 02:38:13 PMreport abuse
Geico
Geico offers what they call Mechanical Breakdown insurance to their auto policy holders. It's like an extended warranty. The last time I checked, it's only offered on relatively new vehicles and mine was too old to get it. But the cost estimate they gave me was fabulous - something like $20 a year billed with your auto policy, not a big sum up front. Geico is obviously a reputable company, so something to consider. I'll probably get it the next time I buy a new car because it was so inexpensive.
By Karen @ 08/14/09 02:20:28 PMreport abuse
Exemptions-
Med Student: More like a convenient oversight. I usually switch off my ringer during campaign season. I'm in the market for an air horn as well LOL.
By klp @ 08/14/09 02:19:58 PMreport abuse
Exemptions-
Med Student: More like a convenient oversight. I usually switch off my ringer during campaign season. I'm in the market for an air horn as well LOL.
By klp @ 08/14/09 02:19:58 PMreport abuse
Exemptions
Drew: Political robocallers are, unofortuantely, exempt from the do-not-call list. A severe oversight, in my opinion...
By Medical Student @ 08/14/09 11:23:41 AMreport abuse
Auto Warranties
A highly rated car MAY keep you from having to pay for unexpected repairs. Bought a Honda Civic some years back and the air conditioning compressor failed just after the warranty expired. Complained to Honda in writing and they sent us a check for about 80% of the cost of replacing the unit.
By JD @ 08/14/09 10:56:51 AMreport abuse
I'd love to see this used against political robocalls
Before I dropped my land line, almost every call I received during an election was a robo call from a politician, and I was on the do not call list.
By drew @ 08/14/09 09:44:08 AMreport abuse
warranties
I got a lt warranty for my old Ford Escort and I'm glad I did because the engine head cracked at 40,000 miles. I wish I had purchased one of our old Saturn because it needed rings and valves at 55,000. Both of these vehicles were rated highly at the time by consumer reports. I solved the problem though. I don't need to buy lt warranties because I buy Toyotas and Nissans now.
By angela @ 08/13/09 08:40:03 PMreport abuse

Auto Warranty over the Phone

Just got a call from a company today by phone; all sounded good according to what was said; my vehicle is 9 years old and has approx 108k miles. The rep went on about how older cars over 100k miles typically can't get warranties. Was told that 5 years coverage would be about $354 a year and he went on and on about everything that is covered.
I asked to have a copy of the info as to what is covered/not covered mailed to me for review (i.e. I want to read all the fine print); or if I could find it online.
Was told that this company does not have website and that I could review the policy but that I would have to make a downpayment first and if I didn't like the policy could cancel in 30 days. I repeatedly stated that I would not purchase a warranty unless I could read all the particulars "in advance". Company rep just kept stating that they didn't do it that way. I finally told her (I was transferred to someone else at this point) that obviously if they couldn't send me info to read in advance, then it wasn't the company for me....she hung up on me.
Can't recall the full name of this company, but started with National something.
Anyone out there had a call from this outfit and what do you know about them?

By maureena @ 11/11/09 03:51:00 PMreport abuse

RE: 3rd Party Auto Warranties

I am the poster on 08.15.09 discussing the 2nd extended warranty on my 2001 Lexus. Last weeek, at just over 130k miles, I had a rear main oil seal leak that cost $1,700 to fix (almost all labor). This was completely paid by my warranty company. The warranty company even sent out an adjuster to verify the claim prior to approving.

In total covered repairs so far, I have been paid back the full cost of my warranty, plus $456. In addition, I still have approximately 29,500 miles left on this warranty or 20 more months, whichever comes first.

Again, do your research extensively before you purchase an extended auto warranty. To get an "exclusionary" warranty, you generally need to purchase before 50k miles. To get a decent "stated coverage" warranty, this generally needs to be purchased before 100k miles.

Another thing to look out for, make sure the "Limit of Liability" clause in the service agreement do not put too low of limits. Some agreements that I have read put a total aggregate liability of $6000. Some even breakdown costs in each category ($3000 engine, $2200 transmission, etc.) Stay away from this as the costs to repair could be more than that.

All of the service agreements will have some limit of liability. My agreement states that each repair visit cannot exceed the NADA trade-in value of my car (currently $8,650) And the total payout (aggregate) off all claims cannot exceed the original purchase price of my car (which was $23,700).

I have done very well with my current and previous extended warranties. Both have the same administrator (very well known also for electronic /TV warranties as well). Do your homework - a lot of it - before purchasing. Have your dealership / repair shop service advisor fully review to give his opinion. Lastly, READ and UNDERSTAND EVERY LITTLE DETAIL in the contract so you know what your are getting!!!!

By RS @ 10/29/09 02:09:03 PMreport abuse

Auto one warranty

That company is a fraud company not only is the owner and old fraudster but he is back at it again. they take your money and when and if you need to use your warranty they dont pay for the repairs and if you cancel it they dont give you a refund like you are told. i tried for 10 months and never got my refund until i contacted my local news stations and they were able to do it for me! they need to be closed down and the owner needs to go to jail for this!

By Paige @ 08/28/09 01:08:46 PMreport abuse

Useful

Useful post.....

---------------------------------------------

[url=http://www.thebestcarwarranty.com/] Extended Auto Warranty [/url] - [url=http://www.thebestcarwarranty.com/] Used Car Warranty Provider [/url] - [url=http://www.thebestcarwarranty.com/] Automotive Warranty Service [/url]

By thebestcarwarranty @ 08/22/09 01:51:50 AMreport abuse

Nice

Very Interesting and useful post....

---------------------------------------------

Extended Auto Warranty - Used Car Warranty -
Automotive Warranty Service

By Automotive Warranty Service - Used Car Warranty - Extended Auto Warranty @ 08/22/09 01:50:25 AMreport abuse

Extended warranty

Have purchased 2 Chrysler vehicles in the last 18 months. They have the factory lifetime engine and trans warranty. Also bought a lifetime bumper to bumper warranty for $2500.00 and $3000.00 for my second car. Only $100 deductable per time in the shop no matter how mant items being fixed. Only exclusions are the normal wear items like tires & brakes. I tend to keep my cars 7+ years and these 2 new ones will be passed to my 2 kids when they turn 16 in 4-5 years. Figured a lifetime warranty would be good for a 10 year old car driven by a teenager.

By crosseyed @ 08/15/09 09:40:11 PMreport abuse

3rd Party Auto Warranties

You need to do your research to find a good one.

I bought my 2001 Lexus with 48,000 miles on it (2k left on the OEM warranty). I researched and bought a 3rd party "exclusionary" warranty for $1393, which covered me up to 100k miles or 5 years. By the time my warranty expired I had $4,500 in covered warranty work done (mostly all labor to get to the part that was bad).

Just under 100k miles, I bought another warranty (“stated” warranty, which lists out what parts are covered - not as good due to high miles). I had my service advisor review the coverage before I bought it. It covers me up to 160k miles and cost $2,300 - so far used about $950 in warranty work. I have 33k miles left in the warranty. I know that my car is notorious for having transmission problems around 100k miles ($4k to replace). This warranty has the same warranty administrator as the last one. As you can see, they are very good with covering repairs.

Remember, the repairs need to be legitimate. If you do not service your car according to the OEM schedule, YOU may be causing the repairs by neglect. Do not expect the warranty company to cover repairs if you do not maintain your vehicle properly.

I would not recommend a warranty that is backed by a “risk retention group” - ask if it is are or not - Google this for more info.

Get “Bumper to bumper” coverage or also called “exclusionary“. (this depends if it is offered due to the amount of miles or age of your car) Usually you can get this if you are still under the factory warranty.
Get wear and tear coverage - not just “mechanical breakdown”

Pay extra for a lower or no deductible - you will benefit from this is the long run

BEFORE you buy the warranty, review the coverage with a fine tooth comb Have your service rep or repair person review the coverage also and give his/her opinion.

Don’t assume the extended warranty from the dealer is better - the one I looked at was NOT. It was a “stated” coverage, not “exclusionary” - It was also more expensive.

Make sure the warranty company will pay the repair shop directly (with a credit card) and not you paying it first and submitting reimbursement.

Lastly, when you do research - take the reviews with a grain of salt. Some people may not have had something covered for a legitimate reason (part failed due to corrosion, neglect, etc.) They scream rip-off anyway.

There are no links to buy anything in my comments.. I am not selling anything here. I do not sell warranties and I am not in the industry at all. I have nothing to gain, other than to try to help. I am just tired of seeing people get ripped off. A lot of people out there do not have a conscience.

By RS @ 08/15/09 02:38:13 PMreport abuse

Geico

Geico offers what they call Mechanical Breakdown insurance to their auto policy holders. It's like an extended warranty. The last time I checked, it's only offered on relatively new vehicles and mine was too old to get it. But the cost estimate they gave me was fabulous - something like $20 a year billed with your auto policy, not a big sum up front. Geico is obviously a reputable company, so something to consider. I'll probably get it the next time I buy a new car because it was so inexpensive.

By Karen @ 08/14/09 02:20:28 PMreport abuse

Exemptions-

Med Student: More like a convenient oversight. I usually switch off my ringer during campaign season. I'm in the market for an air horn as well LOL.

By klp @ 08/14/09 02:19:58 PMreport abuse

Exemptions

Drew: Political robocallers are, unofortuantely, exempt from the do-not-call list. A severe oversight, in my opinion...

By Medical Student @ 08/14/09 11:23:41 AMreport abuse

Auto Warranties

A highly rated car MAY keep you from having to pay for unexpected repairs. Bought a Honda Civic some years back and the air conditioning compressor failed just after the warranty expired. Complained to Honda in writing and they sent us a check for about 80% of the cost of replacing the unit.

By JD @ 08/14/09 10:56:51 AMreport abuse

I'd love to see this used against political robocalls

Before I dropped my land line, almost every call I received during an election was a robo call from a politician, and I was on the do not call list.

By drew @ 08/14/09 09:44:08 AMreport abuse

warranties

I got a lt warranty for my old Ford Escort and I'm glad I did because the engine head cracked at 40,000 miles. I wish I had purchased one of our old Saturn because it needed rings and valves at 55,000. Both of these vehicles were rated highly at the time by consumer reports. I solved the problem though. I don't need to buy lt warranties because I buy Toyotas and Nissans now.

By angela @ 08/13/09 08:40:03 PMreport abuse

Listen Live:

Clark On Demand:

Clark's Advice:

Consumer Action Center:

Quick Links:

Clark Media:

Call The Show:

Aug 13, 2009 -- Web vigilantes vs. extended auto warranty robo-callers

What others are saying