Missouri has been described by one industry group as ”becoming a hotbed for deceptive direct mail and telemarketing campaigns” related to extended warranties. These companies will inundated a used car buyer with offers of extended warranties that are presented as covering nearly anything that might go wrong with the car, but actually cover very little despite their excessive premiums.
These warranty offers are often directed at people who have just obtained second chance auto loans. They couch the warranty as a way to hedge the buyers bet against repossession by avoiding high cost repairs. Some unscrupulous companies point out that high dollar repairs are the main reason that second chance auto loans end up in repossession, playing on a vulnerable buyer’s fears.
Many subprime auto loan lenders recommend that a buyer purchase an extended warranty, but only from the dealer who sold them the car. These warranties are separate from the problem and are offered by legitimate coverage agents. You do not want to ruin your second chance at good credit, but you will have to be careful with an extended warranty. Shop around and compare coverages. Always do some research on the company offering the warranty. Protect yourself and you should have a positive experience.