You sit down to buy or lease a vehicle….
You debate the price….
You finally settle on a price….
You then go to the paper work person….
You are asked about an extended warranty for your vehicle….
Remember that price u got?
It’s just went up….
It’s blossomed into used car’s now….
An offering as an insurance against tired older cars that will need repairs….
As a single mother with one child, she worried about an unexpected repair on her six-year-old car and signed up with Driver’s Protection of St. Louis. “She fooled me. I bought it,” she said.
After she paid about $2,000 in premiums, the car’s check-engine light came on. She was pleased that she had the policy because the engine was supposed to be covered. But the company said that the specific engine parts needed were not listed in the contract. So she took out a $550 loan to get her car fixed. The company did not respond to her request for a refund. Officials at Driver’s Protection could not be reached at either at the company’s phone number or through its Facebook page.
More and more customers like Ms. Latham are interested in vehicle service contracts. The business is expected to grow to involve billions of dollars in sales, according to a 2019 report by Colonnade Advisors, an investment banking firm based in Florida.
The reason for the growth: People are keeping their vehicles longer, and they worry about repair costs — particularly during the pandemic. “The last thing people wanted to do was taking public transportation or being without a vehicle,” said Gina Cocking, Colonnade’s chief executive. “Having a vehicle service contract was a pitch that resonated with a lot of people.”
Service contracts are also becoming more familiar, Ms. Cocking said. People buy them for smartphones and refrigerators and increasingly see them on television. “Those commercials are coming on all the time. When you see those, it starts to normalize the product,” she said.
While business is increasing, so are complaints, according to the B.B.B. In 2019, the Better Business Bureau in the United States and Canada got about 6,700 complaints about companies offering service contracts. Last year, that increased 21 percent to almost 8,200….