How to avoid car warranty scams
Learn how to tell a scammer from the real deal
Extended auto warranties can reduce some of the financial risks of car ownership and provide valuable peace of mind in the process — but only if they’re legitimate.
A 2021 AARP study found that 7 in 10 Americans had been exposed to an auto warranty scam in the past 12 months. While mailers and emails exist, the most common scam attempts seem to come over the phone. According to the National Consumer Law Center, Americans lost almost $30 billion to fraudster phone calls in 2021, and the No. 1 source of complaints to the Federal Communications Commission that year was fake extended auto warranties.
That’s why it pays to be extra vigilant when buying an extended auto warranty. Read on to find out how you can be sure you’re not being scammed and learn the simple test that a scammer can never pass.
Key insights
- The only legitimate ways to purchase a warranty are by reaching out to the provider directly or purchasing through a dealership or online marketplace. If the “provider” reaches out to you first, it’s probably a scam.
- Some warranty providers require you to fill out an online form and wait for them to call back. When you do get a call, you can verify the caller is legitimate by hanging up and calling the company back on their official number.
- You can reduce the number of scam calls you have to deal with by activating your phone’s anti-spam features, registering with the National Do Not Call Registry and ignoring/blocking any fraudulent calls that make it through.
Car warranty scam basics
If you’re not interested in an extended warranty, then avoiding scams is relatively easy — just don’t engage with whoever contacted you. There’s no legal requirement to have warranty coverage, so you can safely ignore anyone trying to sell you one.
If you are interested in buying an extended warranty, though, one of the best ways to avoid being scammed is to understand how the legitimate process usually works. After that, you’ll be better at detecting when something seems off.
There are four main ways to purchase a legitimate extended auto warranty:
- Online, through the provider’s website
- On the phone, by dialing the provider directly using the number listed on its homepage
- From a dealership, though it doesn’t have to be the one that sold you the car
- Through a warranty marketplace, like ConsumerAffairs, which can connect you with different providers
The common thread here is that you are reaching out to the provider, not the other way around. If a “provider” comes to you first, there’s a very good chance it’s a scam. (The ads some car manufacturers now place on their vehicles’ infotainment screens are an exception.)
That’s especially true if someone calls your phone claiming to represent Toyota, Ford or any other automaker. “In general, manufacturers do not call customers to extend a warranty,” said Allison Harrison, an attorney with experience in automotive law. “So anyone telling you they are the manufacturer should be a red flag.”
We never just call random numbers. … We only call once they’ve completed a form online and given us permission.”
Reputable extended warranty companies typically don’t cold call, either. “We never just call random numbers,” an associate with Endurance told us. “We only call once they’ve completed a form online and given us permission.”
Still, things might get a little confusing if you’re shopping for a warranty and you start filling out online forms or requesting quotes. (Some providers, like CARCHEX and CarShield, only sell plans over the phone, and sites with matching services, like ConsumerAffairs, may call to follow up after you’re matched with a brand.)
So, if you start getting calls after you’ve submitted information online, how do you know if the caller is legitimate?
If you use our site to get matched with an auto warranty provider, you can expect a call from them right away. (This is not the same thing as a cold call — cold calls are made without any action on your part.) A ConsumerAffairs concierge may also follow up with you later to see how things went.
6 tips to avoid car warranty scams
Here are six tips for avoiding scammers.
1. Know how to spot a bot
The same goes if it starts with a suspicious, generic greeting like “Hello? Are you there? Can you hear me?”. These are just an attempt to get you to speak, which verifies that your phone number is active and that you’re a viable target for further harassment.
2. Never give out personal information until you verify the caller
In fact, a legitimate warranty company that you reached out to first should already have information on you and your vehicle readily available.
3. Verify the caller using a simple trick
“If someone calls claiming to be from a legitimate warranty company, you can always say ‘give me your number and I’ll call you back,’” an associate with olive told ConsumerAffairs. Once you hang up, you can make sure the number they gave you matches the number on the provider’s official website.
4. Ask for a written copy of the warranty agreement
Plus, asking for a copy of the policy is a great way to filter out both scammers and illegitimate providers. Unlike scammers, the latter might actually be a licensed business. They just make false or misleading promises over the phone to get you to sign.
So, if you see glaring differences between what the sales representative promised and what the contract actually states, it’s probably best to choose a different warranty provider.
» MORE: How to avoid the worst extended auto warranty companies
5. Don’t comply with pushy sales tactics
6. File a complaint with the FCC
How to prevent auto warranty scam calls in the first place
If you’re aware of what scam calls sound like and you’d just like them to stop, here are some steps you can take.
- Activate the anti-spam settings on your phone: Both Android and Apple phones can utilize anti-spam apps and settings to help filter out fraudulent calls. (Your exact settings may differ based on your device and cellular carrier.)
- Don’t engage with suspected spam callers: A scammer’s robocall might ask you to press a number to be removed from the call list. In a similar vein, a spam text might ask you to type “STOP” to be left alone. In either case, replying to the suspected spammer could do little more than confirm that you’re human and subject you to further harassment. You’re better off blocking or ignoring the number.
- Register your phone number with the National Do Not Call Registry: The National Do Not Call Registry is a database maintained by the Federal Trade Commission (FTC). If you log your number there, certain callers (mostly telemarketers) are banned by federal law from contacting you. If they still call after 31 days, you can report them to the FTC. Many scammers, fraudsters and other criminals ignore this rule, but in our experience, adding your number to the database does lower the number of unwanted calls you receive by a noticeable amount.
FAQ
What’s the goal of car warranty scams?
In most cases, car warranty scammers either want to sell you a fake warranty for thousands of dollars or collect and sell as much of your sensitive personal information as possible.
How do car warranty scams work?
Per the FCC, a common scam tactic is for the scammer to call you, pretend to represent a car dealer or an automaker, and warn you that your auto warranty is about to expire.
They’ll then give you a pitch to renew your policy, collect as much of your personal information as possible (like name, address, Social Security number, billing information, etc.), and charge you hundreds or thousands of dollars for a fake warranty.
How can I stop unwanted spam/scam calls?
Activate your smartphone’s spam filter, add your phone number to the National Do Not Call Registry, and never engage with suspected spam callers or scammers when they do try to contact you. Simply ignore them, block them and/or report them.
What should you do if you actually want to extend your car’s warranty?
We recommend that you take your time when buying an extended auto warranty, but the short answer is that you should decide what kind of coverage you want, research different warranty companies, comparison-shop for quotes and read your contract thoroughly before you sign up.
» GET STEP-BY-STEP INSTRUCTIONS: How to choose an extended car warranty
Article sources
- AARP, “ AARP Report: Stress Plays Key Role in Fraud Susceptibility .” Accessed Sept. 18, 2023.
- CBS News, “ FCC cracks down on scam ’auto warranty’ robocalls .” Accessed Sept. 18, 2023.
- Federal Communications Commission, “ Watch Out for Auto Warranty Scams .” Accessed Sept. 18, 2023.
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