What to Know About Car Warranty Scams

Criminals pose as representatives of dealers or insurers to get you to pay for a bogus warranty renewal

Ken Budd,

AARP

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Published November 01, 2021

/ Updated November 08, 2024

a car driving down a tunnel with the words extended warranty

Matt Chase

If you own a motor vehicle and live in the United States, you’ve probably received a robocall about extending your warranty. Criminals placed nearly 13 billion such calls in 2021, according to call-blocking service RoboKiller. The number dropped to 7 million by late 2022 — the Federal Communication Commission (FCC) targeted groups that made billions of robocalls and banned them from running telemarking operations — but the problem persists.

You may still “receive calls from scammers posing as representatives of a car dealer, manufacturer or insurer telling you that your auto warranty or insurance is about to expire,” the FCC stated in an updated warning from December 2023.

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 bought when you bought the vehicle is about to expire.

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” 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 scammers try to convince vehicle owners to pay up or provide personal information. Some will mail 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.

What to know about car warranties

If you do want a service contract — perhaps 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 (AAA).

But before you buy, make sure you understand what is and isn’t covered, and how claims are reimbursed. If you are interested in a plan, approach the provider directly. Any unsolicited warranty offer is almost certainly a scam. And some companies exaggerate the benefits. In July 2024, auto insurer CarShield agreed to pay $10 million to settle Federal Trade Commission (FTC) charges that the company used deceptive ads and telemarketing for its vehicle service contracts.

“Extended car warranties are rarely worth the money,” says Lauren Fix, an auto expert and editor-in-chief of Car Coach Reports. “Consumers do not always get what they think they bought when signing up for the auto extended warranties. Many consumers cannot use the repair facility of their choice, or find that repairs they thought were covered are not. The best choice is to save your money each month and use that fund for any upcoming repairs.”

Red flags for car warranty scams

A call or mailing insists that it’s urgent for you to 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.

How to protect yourself from car warranty scams

Investigate 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.
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.
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.
Don’t answer a call if you don’t recognize the number. Let it go to voicemail.
Don’t assume a call is legitimate 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.
Ignore instructions to press a number on your phone to avoid future unwanted calls. Scammers do this to confirm they’ve reached a working number that they can call again.
Never 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.

More resources

Report auto warranty scam calls to the FTC, the Federal Communications Commission and your state’s attorney general.
File a complaint with the Better Business Bureau; to help alert other consumers about scam warranty companies.
The AAA offers information on what to look for in a vehicle service contract.

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Ken Budd has written for National Geographic Traveler, Travel+Leisure, The Washington Post Magazine and many more. He is the author of a memoir, The Voluntourist.

What to Know About Car Warranty Scams