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Car Warranty Scams

If you own a motor vehicle and live in the United States, you’ve probably received a robocall about extending your warranty. Or many calls: Auto warranties are now far and away the most common subject of phone scams, according to call-blocking service RoboKiller.

Based on data from the first half of 2021, RoboKiller projects that, by year’s end, crooks will have placed nearly 13 billion such calls, more than triple the 2020 total. “It’s statistically possible that every smartphone owner in the United States will have received more than one car warranty scam by the end of 2021,” the company says in its mid-year scam report.

Auto warranty scammers try to take advantage of vehicle owners’ fears that, someday, they’ll have to pay a lot of money to replace a broken or worn-out part. If you answer one of their calls, you’ll typically hear a recorded voice claiming to represent an automaker or dealer and warning that the coverage you got when you bought the vehicle is about to expire.

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You’ll be instructed to press a certain key on your phone to extend your coverage. This will likely connect you to a live “salesperson” who tries to get your payment information to draw up a contract.  

The call isn’t really from your vehicle’s manufacturer or the dealership where you purchased it, and the “extended warranty” being offered isn’t a warranty at all. It’s a service contract that may cost thousands of dollars but provide only limited coverage (for example, for only part of the engine) — restrictions frequently buried in the fine print.   

The person on the phone will often know details such as the make and model of your vehicle, which can make the pitch sound plausible. Such information is public and can be obtained from state motor vehicle records or purchased from data-collection companies.  

Numerous as they are, scam calls aren’t the only way con artists try to get vehicle owners to pay up or provide personal information. Some mail out fake warranty expiration notices, designed to look as if they were sent by manufacturers or state motor vehicle bureaus, with a toll-free number for auto owners to call.  

There are legitimate service contracts that can help if you’re worried about being able to afford major repairs on an aging car. Look at brand-name providers with long track records, such as your car’s manufacturer or the American Automobile Association, better known as the AAA.  

Make sure you understand what is and isn’t covered, and how claims are reimbursed, before you buy. If you are interested in a plan, approach the provider directly. Any unsolicited warranty offer is almost certainly a scam.

Warning Signs

  • A call or mailing says it’s urgent for you take immediate action to continue your car’s warranty coverage.
  • An outside company offers to extend the factory warranty, something only the vehicle’s manufacturer can do.

Can You Spot an Extended Car Warranty Scam?

Do's

  • Do consider installing a call-blocking app on your smartphone. Such apps use reports from users, the Federal Trade Commission (FTC) and other sources to predict which calls are likely scams or spam.
  • Do attach a call-blocking device to your landline, if you still have one. These devices can block numbers of known scammers and weed out robocalls by prompting callers to press a number to continue.
  • Do check on anyone who claims to be calling from the dealership where you bought your vehicle. Hang up and call the number listed on the dealer’s website or the purchase paperwork.
  • Do check the expiration date for the manufacturer’s warranty and the terms for extending that coverage before you consider buying coverage from an outside provider.
  • Do research a company offering extended coverage — for example, check the Better Business Bureau listings for complaints — and carefully read the fine print on any contract to see exactly what it covers and how long it lasts.
  • Do put your phone numbers on the FTC's National Do Not Call Registry. Legit companies won't call you if you're on the registry unless you've specifically authorized them to do so, so you'll know an unsolicited car-warranty call is almost certainly a scam. 

Don'ts

  • Don’t answer a call if you don’t recognize the number. Let it go to voicemail.
  • Don’t assume a call is on the level because caller ID shows the name of your vehicle’s manufacturer or something like “auto warranty department.” Scammers can use spoofing tools to display whatever name or number they choose as the caller ID.
  • Don’t follow instructions to press a number on your phone to avoid future unwanted calls. Scammers do this to confirm they’ve reached a working number they can call again.
  • Don’t provide personal information such as a credit card or driver’s license number unless you’ve verified that you’re talking to someone from a legitimate company that you already have a business relationship with.

More Resources

Published November 1, 2021

About the Fraud Watch Network

Whether you have been personally affected by scams or fraud or are interested in learning more, the AARP Fraud Watch Network advocates on your behalf and equips you with the knowledge you need to feel more informed and confidently spot and avoid scams.

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