Forced Extended Warranty Scam or The Back End Products Scam
Forced warranty purchase is a common car dealer scam practiced right in the dealership. The scenario of the scam is quite simple; the car consumer visits the dealership to choose a car. After he likes a car and performs the vehicle test drive, he enters the sales manager’s room to sign the financing documents. Everything seems to be flowing smoothly. However, a few days later, the sales manager calls the customer back to tell him the financing company requires the purchase of an extended warranty.
Forced warranty purchase scam works especially well in the case of used car buying, as the used car purchasers are convinced by the dealers that the financing company doesn’t trust the used vehicles that may have excessive wear and tear on them and may have serious breakdowns later on.
The forced warranty purchase fraud is also known as the back end products scam. This is also a type of add-ons scam, as very often the car buyers do not really need such products as extended warranties that may cost up to $3000 instead of the $400.
Though the dealers may pull such a scam as forced warranty scam on you, they do not have the right to do so. So, if you have to deal with such a scam, you should require that the dealer puts it in writing that the financing company rejects approving your loan unless you purchase an extended warranty.
Another scenario of forced warranty scam is forcing the car owner to buy an extended warranty by cheating him about his present warranty’s expiring dates. The car owner starts to often receive calls and e-mails from a company urging him to buy an extended warranty for his car, as the present one is already expiring.
To be able to avoid such scams, one must be an educated car buyer. Do your research preliminarily before entering the dealership and never trust the dealer’s words until you check the facts.