Why this DC-area-based consumers’ group advises against buying vehicle service contracts

Investing in a vehicle service contract might seem like a responsible move to protect against big unexpected repair bills, but a D.C.-area-based consumers’ group believes they’re bad deals for most drivers and advises against buying them.

“We dug through these policies and we actually in the end, with some of them, wondered, ‘Well, what do they actually cover?’ Because there were so many exclusions,” said Kevin Brasler, executive editor at Checkbook.org.

They don’t cover wear and tear on most parts. Common components usually excluded from coverage include brake shoes and rotors; clutches; fuel injectors; exhaust systems and catalytic converters; batteries; shocks and struts.

“There are so many exclusions that we really felt like these plans weren’t worth buying.
Another reason we felt like these plans weren’t worth buying is that they work hard to deny claims,” Brasler said.

Some of the reasons coverage was denied include drivers being told that they knew there was a problem that they neglected to deal with quickly enough, or they didn’t keep up with scheduled maintenance.

“And on and on, so that people who bought these plans, by and large, were quite dissatisfied and wish they hadn’t done so,” Brasler said.

According to Checkbook, so many complaints have been filed against sellers of vehicle service contracts that the St. Louis-based Better Business Bureau, which covers southern Illinois and southwest Missouri, where many are headquartered, issued this warning:

“BBB advises consumers to use extreme caution when entering into an extended auto service contract for your vehicle. Consumers report to BBB they feel deceived by misleading advertising, which includes mailers, telephone sales representatives and radio and television commercials. Consumers also state they have difficulty canceling their policies and that requested repairs were not covered by policy administrators.”

Consumers’ Checkbook/Center for the Study of Services is an independent nonprofit consumer organization founded in 1974. It has for more than 40 years been an innovator in providing information to help consumers make smarter choices.

Kristi King

Kristi King is a veteran reporter who has been working in the WTOP newsroom since 1990. She covers everything from breaking news to consumer concerns and the latest medical developments.

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