Car Owners Shouldn’t Waste Money on Extended Service Warranties on Used Vehicles, Lawyer Says | Call Kurtis

When you buy a car, an extended warranty is often offered. However, when a Lodi woman claimed the protection plan she purchased, she was told the company was no longer in business.

Mary Woods then called CBS13 and Call Kurtis’ consumer investigations team to investigate.

These extended vehicle warranties typically cost several thousand dollars and are designed to give you peace of mind if something goes wrong with your car.

Over the years, we’ve written stories about the disappearances of other auto warranty companies.

Should you buy one?

Woods, 72, told us the transmission in her 2016 Acura MDX stopped working.

“And so I thought, great, now what?” she said.

The widow recalled paying for a five-year road plan that would cover half of all repairs up to $2,000 a year. But Woods learned that Matrix, the company she paid $2,592 for, went bankrupt last summer.

“Whoa,” she said. “That was the last thing I wanted to hear. I was so angry.”

Over the years, Call Kurtis’ consumer investigations team has reported on the disappearances of similar companies. The company that Tracy’s Darrell Hare paid $85 a month for coverage also closed without him even using the service.

“I would have been better off putting it on the bench and waiting for the car to break down,” Hare said.

Are these extended warranty contracts worth it?

“I say absolutely not,” said Elliot Conn, a San Francisco attorney. “Say a firm, resounding ‘no thank you’ and move on.”

Conn explained that these deals generate huge profits, but actual coverage for vehicle owners is often limited. He added that there is no guarantee that the company will be there when you need it.

If it’s so lucrative, how can these companies go out of business?

“Eventually it will catch up with them,” Conn said.

Conn believes consumers are better off paying a few hundred dollars before purchasing a vehicle and having it inspected by a trusted mechanic to save the rest of the money in case you do need a repair one day. Conn added that these repairs typically cost far less than a policy that could cost thousands of dollars.

“I thought, my God, at my age I should have known better,” Woods said. “I felt hurt and vulnerable. I felt very vulnerable. I thought, ‘You took advantage of me. You took my money. “You took advantage of me.”

Woods said that’s because she received absolutely nothing for this extended coverage – for the more than $2,500 she paid for peace of mind.

“Come on, don’t do that to people,” she said. “It’s just not right. It’s just not right. I don’t know how you can live with taking advantage of people and not offering them at least some kind of backup, some alternative, but not making offers to everyone and just leaving us in the dust while they ride away. It’s just wrong.

In the Chapter 7 filing for Matrix Warranty Solutions, the company said it owed $57 million but only had $6 million in assets.

This means that anyone who is owed money will most likely receive pennies on the dollar.

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