The pitch: You get a call or a postcard, or hear an ad telling you that you can sign up for service coverage and avoid being stuck with huge car repair bills.
The truth: So many complaints have been logged about these companies that the Better Business Bureau of St. Louis (where many of these companies are based) conducted an investigation. Consumers spent an average of $2,146 on their “service” contracts but were stuck with a collective $2.7 million in repair bills that should have been covered. A whopping 92 percent of consumers called the companies’ sales tactics misleading or improper.
From the BBB’s report:
The Missouri attorney general’s office says some providers’ contracts are of “minimal value because the service contract actually contains numerous exclusions, limitations and conditions, and providers deny claims for the cost of repairs without a reasonable investigation.”
The exception: No exception this time.