Required Car Warranty Fraud: Know Your Rights.
Vehicle is supposed to be the second largest purchase an average consumer makes. With that in mind it`s essential to realize what they are paying for. But very often customers come across warranty scam when buying both used and new cars.
The scenario of car warranty scam is quite simple. When the customer has already picked out the vehicle and agreed to a price, he has to meet the finance officer and sign all necessary papers. But the finance officer informs him that the financing company that must have provided with a loan requires buying an extended warranty with the vehicle. There are several different justifications the salesperson presents. One of them is that the lender wants to be insured against the problems that a vehicle breakdown may cause.
Another commonly known excuse is that the bank wants the customer to buy extended warranty on a used car as it resources are partially exhausted and the financing company wants to be sure that he will be able to pay for vehicle repair in case it breaks down.
If a customer is buying a new car the above described justifications cannot be used, so the warranty scam has another scenario; extended warranty is to be purchased to qualify for extended terms of requested auto loan.
If a customer refuses to pay for extended warranty car dealer will try to persuade him by promising to get him a better interest rate. Even if this proposal seems enticing, one shouldn`t agree to it as won`t keep his promise and will only create an illusion of low interest rate just by moving the numbers around.
The customer must protect himself from car warranty fraud by all means. Remember, requiring to purchase GAP insurance or extended warranty is illegal, so banks or other financial organizations cannot put forward such a condition for providing customer with car loan. If a car dealer is pulling car warranty fraud on the customer he should demand the dealer to put in writing that bank won`t approve the loan until he buys an extended warranty.
Before signing any paperwork a customer should have it thoroughly analysed as a dealer may have included extended warranty or any other add-ons for your vehicle in the contract.
Be an educated customer, know your rights, and never agree to extended warranty or any other add-on products offered by the dealer if you don`t need them.