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Better Business Bureau (BBB) Extended Auto Warranty Study

Consumers who are in the market for an "extended auto warranty" may stumble across information from the Better Business Bureau that warns consumers to "beware of companies marketing extended auto warranty protection services."

The study information dates back to 2005 and largely centers around the actions of one large vendor of vehicle service contracts that has since closed down. Unfortunately, the BBB extended auto warranty study continues to be mentioned on web sites without clarifying that the study's triggering events date back to 2005 and no longer accurately reflect the current state of the vehicle service contracts industry.

As an industry trade association, the VPA has taken steps to protect consumers. We promote regulatory transparency, education and accountability for marketing and servicing automotive service contracts. Working closely with regulators, we created Standards of Conduct for the industry and all VPA members agree to comply with these industry standards. We also have implemented a Certification-Audit Program that allows consumers to determine whether a service contract vendor is in compliance with VPA standards.

Consumers who do business with VPA-certified companies can rest assured that their vehicle service contract vendor has undergone an extensive third-party compliance review. We strongly recommend that consumers work with VPA-certified companies.

Regarding the Better Business Bureau study on extended car warranties, it should be noted that the industry now uses the term "vehicle service contracts" for their offerings. Any vendor who is offering "extended auto warranties" to consumers (or similar phrasing with the word "warranty") is not adhering to VPA standards.

The VPA and its members has a strong working relationship with the Better Business Bureau (BBB). We support their efforts to protect consumers. As a result of our industry's actions, complaints have dropped across the nation because protecting consumers is now at the core of the industry's standards of conduct.

Although the data in the Better Business Bureau study and many of the conclusions of the BBB study are now dated, some of the recommendations are timeless: read contracts carefully, ask questions, don't make buying decisions in haste, understand exactly what your contract covers and what it doesn't cover, and do your due diligence on companies to make sure they are reputable. These recommendations are consistent with our own advice to consumers, and we encourage consumers to follow this advice. Again, it is worth repeating, consumers should deal primarily with VPA-certified companies as these are the only vehicle service contract providers that have been evaluated by a rigorous, independent certification process that ensures that they protect consumers and follow applicable rules and regulations.

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