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Extended Car Warranty

The Extended Car Warranty Debacle

Have you received one of those aggressive and deceptive calls pushing an extended car warranty? In what many now refer to as the "Extended Car Warranty Debacle", a few companies that are no longer in business used robo-dialing to contact tens of thousands of consumers throughout the United States, attempting to persuade consumers with a vague description of vehicle breakdown coverage.

Not surprisingly, the public and regulators were outraged. But another group shared their outrage: ethical and law-abiding industry participants. Firms that were committed to playing by the rules watched in horror as the actions of a few fly-by-night actors, relying on recently devised robo-calling technologies and other deceptive marketing practices, tarred the image of the entire industry. Legitimate firms found their industry under fire, with negative stories in the press and intensive regulatory scrutiny.

Making Lemons Out of Lemonade

The VPA, a not-for-profit industry trade association, was formed to clean up the mess. One of the VPA's first action items was to institute an ethical framework to ensure integrity throughout the automotive service contract industry and to restrict providers from using "extended car warranty" or other deceptive language.

Since automotive dealers and manufacturers dominate the marketplace, VPA members provide consumers with enhanced market competition. Without the presence of VPA members in the industry, consumers would be forced to purchase from an industry that would be monopolized by a handful of big names in the auto industry.

VPA members offer flexible and industry-compliant automobile service contracts that benefit consumers. These service contracts provide consumers with a range of service terms and prices that allow them to extend the life of their vehicles, even if the customer can only afford coverage for particular vehicular components. VPA companies, as third-party vendors, can sell service contracts providing a degree of automotive assurance to consumers, even after factory and dealer warranties expire.

VPA Certification Requirements

Many VPA members take the additional step of becoming a VPA certified company. VPA certified companies voluntarily participate in an audit process that is designed to give consumers the assurance of a fair and ethical buying experience.

Requirements for VPA certification are comprehensive and include on-site interviews, policy & procedure reviews, call monitoring, contract audits and more. Applicants for VPA certification are even "mystery shopped" to guarantee total compliance with VPA Standards of Conduct -- even when the auditors aren't looking over the company's shoulder.

A Continuing Process

Although many advances have been made toward eliminating deceptive "extended car warranty" practices and creating a more ethical automotive service contract industry, the VPA isn't resting on its laurels.

VPA members are dedicated to a continuing process of improvement, assuring consumers that they will always receive fair treatment when they purchase vehicle service contracts from a VPA affiliated provider.

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