America's Advocate for
Vehicle Protection Plans

Extended Vehicle Warranty

How to Avoid Dishonest Extended Vehicle Service Providers

Believe it or not, there is no such thing as an extended vehicle warranty. The correct terminology is "vehicle service contract" or "vehicle protection contract".

It might seem like a small difference, but in the marketplace it's a critical distinction. When you buy a new vehicle, the manufacturer offers a warranty. When that warranty expires, no third-party can extend it. They don't have the right to do that because they did not issue the original warranty. More importantly, a service contract is not a warranty as defined by federal law.

What To Do If You Are Offered an Extended Vehicle Warranty

Avoid doing business with a firm that tries to sell you an extended vehicle warranty. VPA member firms will never use that phrasing to deceive you into buying a service product. VPA member firms have agreed to adhere to the industry Standards of Conduct, a code of ethics that has been designed to protect consumers and to ensure an exceptional consumer experience.

Although the industry had a few bad apples in the past, the VPA has taken steps to ensure the industry's integrity. Today, the majority of the industry's extended vehicle service contract providers are reputable companies that adhere to federal & state regulations, meet the required financial reserves and strive to deliver good customer service.

Still, the keys to avoiding shady providers are knowing how to purchase a vehicle service contract and making sure the extended vehicle service contract company you work with participates in industry organizations designed to promote ethical standards.

How the VPA Protects Consumers

Standards of Conduct are just one of the ways the VPA protects consumers from providers that attempt to exploit customers through "extended vehicle warranty" plans and other deceptive business practices.

The VPA also ensures that its members accurately describe the nature of their products and avoid any form misrepresentation or manipulative language. For example, VPA members are prohibited from misrepresenting the scope of their coverage or giving customers reason to believe their company is associated with a manufacturer.

Additionally, VPA members may not refer to their products as "insurance" and must monitor sales presentations and telemarketing calls to guarantee that the company's sales team is accurately and honestly representing the organization's products.

The Protection of VPA Certification

As a further protection for consumers, the VPA offers a certification process for extended vehicle service contract providers. Although the certification is strictly voluntary, it is intended to be a stringent review of the provider's compliance with industry regulations and standards.

Since the certification process includes ongoing compliance reviews, we encourage consumers to consider purchasing extended vehicle coverage from a VPA certified company rather than rolling the dice on an unscreened and unknown provider.

Avoiding Unnecessary Risk

There are enough risks in life. The last thing you need is the unnecessary risk of losing money on a bad extended vehicle service contract. As the automotive service contract industry's leading not-for-profit trade association, VPA is committed to giving consumers and service contract providers the tools they need to purchase quality extended service and promote fair business practices.

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