Watch Out! Specific Extended Auto Warranty Scams

Forced Auto Warranty Scam
You are ready to buy a car but the finance manager insists that you have to buy an extended auto warranty in order to get the loan. This is not true: an extended auto warranty has nothing to do with getting a loan. Another version of this scam is the finance manager claiming that the APR will be higher if you don't buy the auto warranty. All of you Young Money readers know that the only thing that affects the APR is your credit score.

It's "Included" Scam
Car dealers "include" the auto warranty into your monthly payments—without telling you. They make it sounds like it's free. It's not. Or, even worse, they don't tell you about it at all.

We Only Accept Our Own Scam
Sometimes dealers will refuse to accept your extended auto warranty. They claim they only accept auto warranties issued by the manufacturer or dealer—this is not true. If the auto warranty is legitimate the dealer has to accept it.

Auto Additive Scam
This scam involves the sale of additive auto warranties marketed as service contracts. This is basically how it works: You are sold an automotive additive (a bottle of liquid or some tablets). You are told that if the product fails to prevent a breakdown, the auto warranty on the additive will cover all, or at least some, or your repair bills. If you want to cancel (unlike with legitimate service contracts) you aren't entitled to a pro-rated refund. In fact, some additive auto warranties claim that as long as you put the additive into your car you can never cancel.