No Deposit Returned
By: Ron Burley | Source: AARP.org |
Extended Warranty Tips
Here are a few questions to ask yourself and the seller when shopping for an extended warranty on a used car:
- Is it a good deal? For used cars that are still worth more than half their original value, it might be. But if payments for the plan plus any deductible cost more than 10 percent of the car’s value, it’s not.
- What’s included? All plans are not created equal. Make sure the plan offers what you’re most likely to need, such as a rental car, coverage for environmental damage like salt corrosion, and after-hours approval. Not having prior approval could be quite an inconvenience if you needed a covered repair overnight or on a weekend or holiday.
- Is it transferable? If you decide to sell your car before the plan runs out, you’ll lose the value of the coverage under any plan that’s not transferable by name and location. Some plans are only good in certain states.
Q: Several months ago, I received a phone solicitation from Continental Warranty for an extended warranty on my 2003 Lexus. They immediately charged $245 to my Visa card as a deposit on the complete cost of $1,645. However, I was told that I had 30 days to cancel if I changed my mind for any reason.
The warranty included a "product"—two quarter-sized tablets to prevent radiator corrosion and a small pressurized can of air conditioner protectant. I put the tablets into the radiator as instructed, but when I went to a garage to have the contents of the can installed, they said it could be harmful and firmly advised me not to use it. Based on that, I wrote Continental a letter of cancellation. However, there was no refund when I received my Visa statement the next month.
I called Continental and was told I had not complied with the contract, which stated the product must be returned within 30 days. I asked how it would be possible to return such a product once you’ve installed it. Besides, the tablets and can certainly couldn’t cost more than $15. Such a policy seems like a scam to keep customers’ deposits when they try to cancel. I would appreciate your help to get a full refund. --Fred A. Gattas, Upland, Calif.
There are two distinct types of extended warranties, in-house and third-party warranties. Car dealers pitch either kind when they make a sale, often rolling the cost of the coverage into your monthly finance payment. Companies like Continental Warranty market directly to car owners after the sale, via telephone, direct mail, or the Web.
Continental’s director of operations, Misty Jackson, was quick to return my call. I explained the situation and she promised to look into it. About an hour later, she called back to say a full refund of $245 had already been credited to you. She also apologized for a miscommunication on their part. Continental will provide a refund within 30 days of purchase, whether or not the physical product has already been put into the car.
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