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State Department of Insurance officials are putting the word out tonight about auto warranty advertising. Its a story we first told you about a few weeks ago when postcards and other ads were first spotted around Mid-Missouri.The ads suggest your auto warranty is about to expire. While it may look official, its likely from a company looking to sell you an extended service contract when you might already have one. In some cases, you might not even still have the vehicle.
If you have questions, you can call the Department of Insurance Consumer Hotline at 1-800-726-7390. The department also gave us some helpful tips:
· Review all terms and conditions of the contract before making a purchase decision. Pay specific attention to the contract's term. The term begins and ends as defined in the contract, and it is based on either the vehicle's mileage at the time of purchase or expiration and/or length of time the contract is supposed to remain in force - i.e., 60 months, 75 months, etc.
· Be sure to review all conditions of the contract. In many cases, if a consumer doesn't follow specific guidelines the contract is void.
· If after reviewing the contract you no longer want to purchase it, you have the right to cancel your vehicle service contract within 20 business days of the contract's mailing date.
· If you should choose to purchase a vehicle service contract when buying a used car, review the terms very carefully. In some cases, the coverage period stated in the contract begins on the date the car was manufactured, not from the date of purchase. This means if you purchase a vehicle service contract for 75,000 miles for a used vehicle with a mileage of 50,000, you only have 25,000 miles remaining on your contract.
· Dealerships and marketing companies sell vehicle service contracts from many different providers. Ask the company to send you a sample copy of the contract for you to review. Know in advance which provider will be backing your plan.
· Check to make sure you are not purchasing duplicate coverage. Do you already have a manufacturer's warranty in place on your vehicle? If so, you may be purchasing unnecessary coverage.
· Missouri law requires motor vehicle service contract providers to disclose the following information in their contracts:
(1) Procedures for obtaining preauthorization for vehicle repairs;
(2) Plan deductible information; and
(3) Merchandise and services to be provided and any limitations, exceptions or exclusions.
· Be wary of 100% money back rebate offers that some dealerships use as incentives to sell vehicle service contracts. They promise to refund the purchase price of the contract if the purchaser does not file a claim while it is in force. You cannot guarantee the rebate company will be in business in a few years or that they have reserved ample funds to pay the rebates.
