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BBB says think twice before picking up after market vehicle service contract

Posted at 6:49 PM, Jan 14, 2019
and last updated 2019-01-14 19:49:15-05

The Better Business Bureau says before you make a decision about an expiring vehicle warranty, think twice before signing up for a new contract.

The BBB says there was an 11 percent increase in complaints last year for the vehicle service contract industry.

"We've been aware of these vehicle service contract companies for more than a decade," Lisa Schiller, a spokesperson for the BBB said. "A majority of the companies are in Missouri, around the St. Louis area. In 2018 alone, the BBB system has received 500 complaints or a little more."

Vehicle service contract companies are things like CarShield, Motor Vehicle Services or Safeguard Auto Direct. These companies have had dozens of complaints. CarShield was the biggest offender the BBB mentioned with 352 complaints from Jan. 1, 2016 to Dec. 31, 2018.

"I'm assuming your consumers will say, 'Oh yeah. I remember receiving one of those in the mail,'" Schiller said. "Or hearing an ad. Consumers generally state in complaints, they feel they were deceived or the company contacted them by mail or by phone or they saw a TV ad or heard a radio ad. Consumers generally think they're coming from their vehicle manufacturer."

"I forgot to get the warranty on my vehicle when I left the dealership," James Smith said. "After I found out I didn't have a warranty, I had to get one."

Smith decided to go with CarShield. His plan called for a $128 per month fee. He decided to sign up because he didn't want to get burned when his car needed fixing.

"Anything can happen to the car," Smith said. "I experienced that before. So I just like to make sure I have something to make sure I'm prepared in case those things happen."

He says he had to pay $200 to $300 to fix a sensor problem in his car a few years ago. He wanted to make sure he wasn't surprised by a fee like that in the future. Well, a few months after signing up for CarShield, the future came.

"My car started running slow," Smith said. "It was real cold. I kind of expected something going on as far as the weather but didn't think it was as bad as what it was."

He called CarShield and they told him he could take his car anywhere to get it checked out. He had the vehicle towed to a Firestone. Smith says the people at Firestone eventually called him because they couldn't do what CarShield was asking them to do.

"Firestone told me I need to get my car because they couldn't break down the engine to tell exactly what was wrong with the car," Smith said. "I pay Firestone $100 to look at my car, then I have a tow truck come and take it to John Paul Buick. I gave the same information from CarShield. CarShield says you have to break the whole engine down and they explain to me what's going to happen if they break the engine down."

Smith says the mechanic told him his contract would be voided if he broke the engine down and he'd have to pay full price to get it fixed. Smith says the mechanic took the cover off of his engine and saw his valve stems were bent on the car, causing his timing chain to go bad.

"[CarShield] tells me, he needs to break the car engine down completely so they can go in and see what caused this problem," Smith said. "[The mechanic] says, I know the problem with the car. All they have to do is come out here and see it. They tell me, we're not going to send a claim adjuster out there until he breaks the engine down."

Eventually, after more back and forth, an adjuster came to check out the car. Smith says that's when things went awry.

"The adjuster goes out and says my car was a couple quarts low on oil when whoever brought it in," Smith said. "We're not going to fix the car because of this. I got fed up with them and said, I don't want their service anymore."

Smith says he had to pay nearly $5,000 to repair the vehicle himself. He canceled his CarShield contract and hasn't heard from them since.

"I see the CarShield ad on TV and it's horrific when I see that," Smith said. "For someone to say this is a good company, it turns my stomach because I know for a fact if you haven't given them a whole lot of money, they're not interested in fixing your car."

"Sometimes consumers pay up to $2,000 on average for a vehicle service contract," Schiller said. "You want to know what you're getting and who from."

Schiller says not all vehicle service contract companies are bad. In fact, CarShield has responded to every single complaint it has received. When TODAY'S TMJ4 tried to reach CarShield for comment, no one returned calls.

Schiller suggests doing a bit more research before picking a company.

"If you receive one of these offers, take a moment to do research," Schiller said. "Check on the company. Call the BBB. Don't act so quickly."

As for Smith, he says he won't be signing up for this type of service again.

"Regardless if you're new or how long you've been with them, to me, a contract is a contract," Smith said. My car should have been fixed. It wasn't. It's a loss. Don't waste your money on them either. Don't do it. Save your money up and do it yourself. Put your money in a bank account. Save it up over a period of time. I try to do the small things myself because I like to save myself some money."