Under the right circumstances the extended auto warranty can be a cost saver by covering the price of expensive repairs while the car owner only has to cover the cost of the warranty deductible. The more attractive extended warranties offer zero deductible contracts for some repairs.

While this sounds very attractive, anxious car owners need to take it slow and do some homework before selecting an extended auto warranty plan. Even more important than scrutinizing the warranty contract, consumers must take time to investigate the company that holds the contract.

The best and most attractive contract in the world is useless if the company is unscrupulous and doesn’t honor the agreement. Before signing with an extended auto warranty company here are a few pre-contract items to consider:

Types of Extended Warranty Companies

Generally an extended auto warranty is offered either by the car manufacturer or an independent after market company. No matter which company is offering the extended warranty, take a few minutes to check out the company’s financial stability. Find out their Standard and Poor’s or Moody’s or even their A.M. Best rating. Each of the aforementioned companies tracks the stability of financial and lending institutions.

An attractive extended warranty is useless if the company is financially unsound and is not around when coverage is needed.

Extended Warranty Company Better Business Bureau Rating

Consumers can find a wealth of free information through the Better Business Bureau with just a few clicks of a mouse. The BBB reviews such extended auto warranty companies and provide an alphabetical rating system ranging from A+ ( given to companies such as Auto Advantage, Inc.) to F (given to companies such as US Fidelis). Each rating is accompanied by a full report explaining why the company earned its rating.

Auto Warranty Company Marketing Tactics

Be wary of high pressure marketing tactics used by some extended auto warranty companies. Consumers who feel pressured or who have a limited time in which to take advantage of the “good deal,” should forgo the deal. According to the Better Business Bureau, some of the less scrupulous companies trick unknowing car owners into purchasing contracts by sending letters advising the consumer that the current warranty on their year, mak

e and model vehicle is about to expire. They go on to list expensive repairs that the particular vehicle will require and that if the consumer doesn’t respond within 72 hours of receiving the letter, the offer would expire.

Other companies employ “robocall” tactics. Such tactics would trick consumers with recorded message advising the manufacturer’s warranty on their vehicle is about to expire, thereby encouraging the recipient to “renew” the non existent coverage.

Such robocalls have been banned by the Federal Trade Commission effective September 1, 2009 and therefore are illegal and can result in a $16,000 fine per call. Anyone receiving such deceptive calls or are in receipt of misleading correspondence can file a complaint with the Federal Trade Commission.

To file a complaint, consumers can either call the Federal Trade Commission at 1-877-FTC-HELP or use their online Complaint Assistant form.

Research Auto Extended Warranty Companies

With so much information available at the consumer’s fingertips, consumers can sit in the driver’s seat when it comes to purchasing auto extended warranty coverage. Don’t feel pressured to accept a “good deal” until after the company offering the deal and the contract has been thoroughly investigated.

Automobiles Eligible for Florida Lemon Law Protection

The Lemon Law applies to new vehicles, demonstrator cars (demo cars driven by a dealer’s salesman, executive or manager) and recreational vehicles, in the state of Florida. As a matter of fact, when you purchase or lease the car, the seller or lessor is supposed to give you the Consumer Guide to the Florida Lemon Law.”  If they don’t, ask for it. If they don’t have it, you can get it by calling the Lemon Law Hotline at 1-800-321-5366.

The lemon law does not cover trucks over 10,000 pounds GVW, mopeds or motorcycles. It also does not pertain to the “living facilities” of a recreational vehicle. Living facilities are the parts of the RV used for living such as generator, furnace, plumbing systems and more. You should refer to the Lemon Law Guide for clarification if you are unsure what is or is not covered.

Maintain Accurate Repair Records

Diligent record keeping is your friend when it comes to filing a Lemon Law claim.  Similar to an insurance claims, document everything.  Document every phone conversation, email, and letter or in-office conversation.

When you bring your car in for repair, check the work order to make sure it properly describes the problem. Additionally double check the odometer reading on the work order and dates the vehicle was brought in for repair and the date you picked it up after the repairs were completed.

When Does the Florida Lemon Law Kick In?

If during the time the Lemon Law is in effect (24 months) you notice malfunctions, conditions or defects that prevent you from safely using the new vehicle, report it to the manufacturer or its representative (usually the car dealership where you purchased the vehicle). Remember, this only pertains to manufacturer defects.  If you had an auto accident and wrapped your car around a tree and it never drove the same afterwards, do not file a Lemon Law claim.

If you keep bringing the car back to the dealership to fix the same problem three or more times, it’s time to notify the manufacturer. As indicated above, you can use the Defect Notification Form if you choose.  After the manufacturer receives notification, they have 10 days to respond to the notification and direct you to a repair facility.  They then have 10 days from the time of delivering the vehicle to the facility for repair to have it fixed.

Additionally, if because of the defect you continue to bring your car back to the dealership and it is in for repair in excess of 15 days (15 cumulative, not consecutive days), it’s time to notify the manufacturer via certified, express or registered mail.  You can use the Defect Notification Form, but it’s not mandatory.

After the manufacturer receives the letter, an authorized representative has the chance to inspect and maybe repair the vehicle.  If the vehicle is not repaired, you are eligible for either a replacement vehicle or refund if the auto has been in the shop for repair for 30 days or more (that’s why it’s so important to keep accurate records – Florida dealerships are aware of this).

Arbitration for the Not so Cut and Dry Cases

Not everything goes smoothly in the real world.  If the manufacturer doesn’t fix the situation, offer a replacement vehicle or a refund and you believe they should, you have options.  You can use one of the Florida certified  arbitration programs to have a third party settle the dispute. You can either use the link or call the Lemon Law Hotline (1-800-321-5366) to get the “Request for Arbitration” form to start the arbitration.

If your case is approved to go in front of the Florida New Motor Vehicle Arbitration Board, they must schedule the hearing within 40 days. Once the case goes in front of the Board, the Florida New Motor Vehicle Arbitration Board decides if the car is a lemon or not.  If it is deemed a lemon, you get to choose whether you want a refund or replacement vehicle.  You’re reimbursed for costs and charges related to the vehicle defect. The manufacturer has 40 days to comply after receiving the written decision.

If the Board rules in favor of the manufacturer, the case is dismissed. Your only alternative is to file an appeal with the circuit court within 30 days.

Since there are no used car lemon laws in Florida, here are a few things to keep in mind when purchasing a used car:

Paying the Right Price for a Used Vehicle

There are too many free used car value calculators online for you to be taken for a ride on the price of the car. Before using the free online calculators, gather as much information as possible about the pre-owned vehicle. The more information you obtain, the more accurately the online tools will be in determining the automobile value.

How to Determine a Used Car Value Using Kelly Blue Book
How to Determine a Used Car Value Using Edmunds
How to Calculate a Car’s True Market Value with Edmunds
How to Determine a Used Car Price for Private Sale

Inspecting the Used Car

Florida drivers should never buy a car at night. That may sound obvious but some buyers get so excited when they think they’ve found the car of their dreams that they let emotions over rule common sense. Purchasing a car seen only under the lights at the dealer’s lot is not wise.

Sleep on the decision making process over night. Come back the next morning and look at the car again. In the daylight you may notice welding spots and other flaws that you didn’t see the night before.

Take the Automobile for a Spin

Along with looking at the car comes driving it. This may also sound obvious but never buy a car if you haven’t driven. Try to simulate your normal driving conditions and then some when test driving a car. If you mainly drive on the highway, take it for a long stint on the highway. If a dealer or a seller is hesitant to allow you to drive it for too long, look for another car.

During your test drive, drive the car over to your mechanic’s shop. Your mechanic is better able to determine whether or not the car is worth buying.

Auto Warranty or No Auto Warranty

The Federal government mandates all dealers must post a Buyers Guide in the window of all cars for sale. This lets consumers know whether there is any type of warranty on the vehicle or if it’s being sold “As Is.” If there is some type of warranty, make sure to understand what is being warranted. According to Federal law, you can have access to that warranty prior to purchasing a car. If an automobile dealership does not or is unwilling to let you read it, they are in violation of the law (Magnuson-Moss Warranty Act of 1975) and that should raise a red flag.

When checking the warranty, find out what parts are covered, whether or not the warranty has co-payments, if you must use specific garages for repair and if normal maintenance is included in the warranty. In addition to understanding the terms of the warranty, find out what, if anything, will void the warranty.

All too often consumers buy a warranted used car feeling that they are protected under the warranty umbrella only to find out after something goes wrong that it’s not covered.
Warranties are like insurance policies in that you don’t want to find out after the loss that there’s no coverage.

In contrast to purchasing a vehicle with warranty protection is buying a car on an “As Is” basis. When you buy a car as is, the minute ownership is transferred to you; you are solely responsible for the car’s maintenance. If the car stops running 15 minutes after purchase, the seller is not responsible.

Consumer Protection

Although there are no used car lemon laws in Florida, there are a few laws in place to help consumers. Check out a few links listed under the Florida Links section to the right.

If you are in the less than desirable position of having to fight with the company holding your extended warranty, here are a few things to consider.

Negotiate with the Extended Warranty Company

First thing to do is to exhaust your efforts with the warranty company. Try to remain calm and document everything. Make sure you have a copy of the auto warranty contract along with copies of your letters or e-mails sent to them.

If conversations were carried out via the telephone, document your conversations by jotting down what was said, who said it, date, time and what was agreed to. One tactic to use is to write a synopsis of your phone conversation in a form of a letter. In your letter, your closing paragraph should put the onus back onto the extended warranty company by saying something like “Unless I receive written documentation to the contrary, it is assumed that you are in agreement with the information as outlined in this letter and will take action accordingly.” This way the ball is in their court. If they don’t agree with the letter, they must notify you in writing.

If you think you’ll eventually end up in court to settle the issue, it is strongly suggested that you send the letters via Certified Mail with a Return Receipt Request. At least you’ll have confirmation that the extended warranty company did receive your letter (even if they claim otherwise).

Filing Complaints

If you find that you are hitting dead ends and they’re not honoring the contract, file a complaint with the Federal Trade Commission using their Complaint Assistant function.

While you’re at it file a complaint with the Better Business Bureau also. Although the Better Business Bureau may not be able to do much to help you in your situation, it will help to notify other unsuspecting individuals that the extended warranty company that you’re dealing with does not always live up to its end of the contract.

Time for Legal Help

If you are unable to resolve your situation directly, you may have to hire an attorney to handle the matter. Whether or not to hire an attorney to fight the extended warranty company depends on how much money you stand to lose or gain. Unfortunately, sometimes these scam companies get away with their unscrupulous behavior because consumers just don’t want to spend the extra money and energy to fight them in court. That’s why it’s so extremely important to do your homework before buying an auto extended warranty.

Car owners who are in this situation are likely to be faced with the company’s representative claiming them that once a warranty has been purchased, it cannot be cancelled. This is incorrect. Any consumer can cancel their warranty when they see the need to do so, and if the same is canceled within 30 days of its purchase, buyers are entitled to a full refund.

Most often, warranties are cancelled because buyers realized too late that these warranties charged very high rates with too low coverage. Many auto dealerships are known to go this route of overcharging, making consumers believe that they are required to purchase a warranty immediately, even if the prospective buyer could buy one at any time. These warranties are usually priced in the hundred or even thousand dollar range, and the coverage is more often than not, inadequate.

Any car owner who has mistakenly purchased their warranty from a dealership, and not from reputable extended auto warranty companies are within their rights to cancel their erroneous purchase. This is especially true if the warranty amount has been included in a car loan, in which case, it is fully refundable upon cancellation. Cancellation will, in effect, work to the consumer’s benefit by lowering the total cost of their vehicle loan.

Cancelling a warranty purchase is not the end of the world. There are a good number of extended auto warranty companies that offer superior benefits worth every dollar of their auto warranty price. The most advisable move to take, in this case, is to do thorough research on the many number of extended auto warranty companies within the area in order to find one that is reputable enough, and whose company representative will offer the best rates in exchange for complete coverage.

If you know the name of the business, use the Business/Charity Name link.

Here’s why it is so important to do a little research on the auto extended warranty company before you sign on the dotted line.

The Good:

Auto Advantage, Inc.

This is a company that is BBB Accredited and rated an A+. Although the company is Incorporated in New York Auto Advantage, Inc sells auto warranties and offers roadside assistance nationwide.
In the past three years, there was one complaint regarding an exchange or refund and the claim was satisfactorily handled. Considering the amount of business that Auto Advantage processes daily, one complaint in 3 years is stellar.

Review their Better Business Bureau report

The Bad

Repair Tech, Inc.

Scoring a D on the BBB rating system, this is not a company you want to secure an extended warranty from. This company is not a BBB Accredited business (although that does not have a negative effect on the ratings because there are many A rated companies that are not BBB accredited) and has had 395 complaints in the past 3 years with 38 of them being resolved and 3 were closed. The remainder were either unpursuable or unresolved. Not a very good track record.

Check out their Better Business Bureau report.

The Ugly

Now, let’s take a look at a different extended auto warranty company.

US Fidelis

This extended warranty company is not BBB accredited. With a BBB rating of F, there have been 1291 complaints in the past 36 months. According to the BBB complaints range from “rude and uncooperative sales representatives to the company’s refusal to provide consumers with copies of coverage contracts”

As of this writing, 584 complaints were closed last year leaving 22 as unresolved.

To read more about the US Fidelis Better Business Bureau report, click here.

Avoid Headaches

Do your homework. If you’re thinking of buying a car, whether it’s a new or used car, do your homework before signing up with an extended auto warranty company. You could potentially be purchasing a huge headache.

New York Lemon Law Criteria

Not all pre-owned vehicles qualify for protection. The car must satisfy all of the following criteria:

• The New York Lemon Law does not apply to vehicles purchased for business use; therefore the vehicle’s primary use must be personal.
• The pre-owned vehicles must have been purchased or leased from a New York dealer
• The vehicle must cost in excess of $1,500
• The used car must have been sold or leased after the vehicle has reached 18,000 miles or two years of age (which ever comes first). Age of the vehicle is counted from the original date of delivery.
• The odometer reading at the time of purchase or lease must be less than 100,000

Duration of New York’s Lemon Law Protection

Since Lemon Law protection for used vehicles does not last for the duration of vehicle ownership, after meeting the above criteria, car owners must ensure the vehicle passes the length of warranty test. The Lemon Law warranty ranges from 30 to 90 days or 1,000 to 4,000 miles depending on the age and number of miles on the vehicle.

Vehicles with 18,001 to 36,000 miles are warranted for 90 days or 4,000 miles. Vehicles with 36,001 to 79,999 miles enjoy 60 days or 3,000 miles of protection while vehicles with 80,000 to 100,000 miles are only protected for 30 days or 1,000 miles.

Auto Dealer Responsibility

When a NY auto dealer or manufacturer sells a pre-owned car, they are required to provide a warranty, in writing, that covers specific parts of the used car. The warranty includes, but is not limited to the engine, brakes, steering and other parts and systems on the vehicle.

In addition to issuing a written warranty, the dealer must make attempts to fix the mechanical malfunction upon being notified by the car owner. If after three or more attempts and/or 15 days (the days do not have to be consecutive) of the car owner not being able to drive the car due to the vehicle being in repair, the vehicle owner can seek protection under the New York Lemon Law (be aware there are a few exceptions, so visit the NYS website for particulars).

Consumer Responsibility

Once you become aware of a potential problem, notify the dealer immediately and make arrangements to get it fixed. If your car is under warranty and you notify the manufacturer/seller during the warranty period and the warranty subsequently expires before the malfunction is fixed, the auto manufacturer is still on the hook to fix the problem since they were notified during the term of the warranty.

Document all of your interactions with the manufacturer/seller and keep all vehicle purchase documents in a safe place. In the event you are unable to resolve the issue with the manufacturer and have to take it a step further, the better your document, the easier the claim process will be.

If you find that you are unable to resolve the issue with the manufacturer and have to submit a claim under the New York Lemon Law, download and complete the NY Used Car Arbitration form and send into the New York State Attorney General’s Office. Make sure to fully complete the form and send COPIES of the original documentation. Once they receive and review the information, they will send it to the New York State Dispute Resolution Association (NYSDRA). At that time the will request the appropriate processing fee (as of May, 2009, the processing fee is $120) to process your claim.

• The vehicle is not used commercially. It auto must be operated primarily for personal use.
• The vehicle was protected under a warranty at the time of purchase.
• When the vehicle was purchased, it had less than 18,000 miles and was less than two years old and lastly,
• The vehicle was either leased or purchased in New York State or is currently registered in New York State.

If your car fits all of the above, then read on

What Constitutes a New York Lemon Law Claim?

Finding that there is a mechanical problem with the car is not enough to file a claim. The state of New York requires the vehicle owner to contact the manufacturer or seller and request the problem to be fixed. If after four attempts or more to make the necessary repairs the vehicle still continues to malfunction, or if the vehicle owner is unable to drive the vehicle because it is being serviced as a result of the problem for more than 30 days (30 days do not have to be consecutive, it’s cumulative), then the car owner can file a New York Lemon Law claim.

Keep in mind, however, that New York’s Lemon Law is not for frivolous claims such as the tinting on the vehicle is unsightly. The malfunction must be one that “substantially impairs” the car value. Additionally, if the malfunction is caused by the vehicle owner through neglect, abuse or alterations made to the car that are not authorized by the manufacturer the there is no protection afforded under the Lemon Law.

Car Owner Responsibility under the Lemon Law

The minute you notice a malfunction, defect or a condition that significantly reduces the value of the vehicle, notify the manufacturer or its authorized representative (seller) immediately. New York law dictates that the seller must notify the manufacturer within 7 days of the complaint.

If you are having a difficult time in getting the manufacturer to repair the problem, file a complaint with the Department of Motor Vehicles.
Keep accurate records of the problem. Be sure to document all conversations, emails and correspondence and keep all of the paperwork associated with the purchase of the vehicle in a safe place for later reference. Keeping meticulous records will help in the event of a lemon law claim.

If after four or more attempts the problem still exists, it’s time for you to file a claim under the New York’s New Car Lemon Law. Download and complete the NY New Car Arbitration Form to start the process.

When completing the form, be sure to submit COPIES of your original documentation and be sure to sign the form. Once it is received in the Attorney General’s office, they will review it for completeness and then forward it over to the New York
State Dispute Resolution Association (NYSDRA). After it is sent to NYSDRA you will be notified to submit the appropirate fee (as of May, 2009, the processing fee is $250) to process the claim.

Clarification: When the term “seller” is used in the above article, it is synonymous for “authorized representative.”

• Vehicle must be six years old or less,
• Warrantied for 30 days or 1,500 miles (which ever comes first) if the vehicle purchase price was between $3,000 and $5,000
• Warrantied for 60 days or 3,000 miles (which ever comes first) if the car purchase price was over $5,000.
• Cars that are over seven years old and/or are sold for less than $3,000 are sold “AS IS.”
• According to the Connecticut Department of Consumer protection, the warranty is not bumper to bumper. The warranty only provides enough coverage necessary to make sure the vehicle is “mechanically operational and sound.”

For more information on the Auto Used Car Warranty contact the Connecticut Department of Consumer Protection or call 860-263-5055.

New or Used: Selecting the Proper Category

Individuals looking for protection under the New York Lemon Law must first determine which of the following categories the claim best fits. Click on the links below to help decide whether your car fits under the New Car or Used Car section of the Lemon Law.

• New Car
• Used Car (Including Leased and Excess Wear and Tear)

Do You Have a New York Lemon Law Claim?

After deciding whether to file a new or used car New York Lemon Law claim, as the vehicle owner, you must see if you actually have a claim. Requirements for a claim differ whether its a new or used vehicle, but bottom line one of two things need to occur:

• Reoccurring problem that has not been fixed by the manufacturer after several attempts (number attempts vary depding whether or not its a new or used vehicle).
• Number of days (cumulatively) in which the vehicle was out of service as a result of the problem.

File the Paperwork

Initiate the New York Lemon Law process by downloading, completing and submitting the appropariate form (either the New Car Arbitration Form or the Used Car Arbitration form). Remember, the better you document the process the easier it is to process the claim.