How to avoid car warranty scams

How to identify a scammer

Scammers use various tactics to gather information and get your money, but there are a few signs that hint you’re not talking with a legitimate business:

• Did you receive alerts that you've won something but must pay shipping or access charges?
• Are they threatening that you'll lose the opportunity if you don't act immediately?
• Are they asking for immediate payment over the phone?
• Are they refusing to send you an offer in writing until your purchase clears?
• Are they pressuring you to continue the conversation after you've indicated that you don't want to talk?

These tactics are designed to pressure you into making a decision without the right preparation. It’s difficult to know for sure that a scam is a scam until it’s too late, but these predatory practices are often worth avoiding anyway.

Car warranty scam signs

There are also a number of warning signs more specific to car warranty scams. Auto warranty scammers often use computerized dialers to make unsolicited robocalls. The Federal Trade Commission (FTC) logged more than 316,000 Do Not Call reports about unwanted warranty calls during 2020. While not all of these calls are scams, many are.

As long as your phone number is on the National Do Not Call Registry, it’s illegal for telemarketers to reach out to you with sales calls unless you have previously interacted with the company in certain ways. Unfortunately, scammers often ignore the Do Not Call Registry.

Unfortunately, scammers often ignore the Do Not Call Registry.”

Car warranty phone scams may start with a recorded message stating that your car's warranty is about to expire and that you have a short amount of time to activate important additional warranty coverage. Don't believe the caller’s story about your car's coverage, though — your warranty may be fully intact. Check with your car’s manufacturer or the dealership where you bought it to verify its warranty status.

Even if the caller seems to have your personal information, like your car's year, make and model, they might not be contacting you with a legitimate offer. The caller may even have a fake local phone number. Scammers often use caller ID spoofing to falsify their information and hide their true locations.

If a warranty offer sounds appealing, you may want more information. When you ask for details, a scammer may ask for your payment information so they can send you the auto warranty plan's complete terms. They may also say that their company already sent the information and they are simply providing a follow-up courtesy call. In either case, don’t provide your payment information before you know what you’re buying.

A legitimate auto warranty company should gladly provide written information about their products and allow you time to decide whether their warranty is a good fit for you and your car.

6 ways to avoid a car warranty scam

Filing a complaint with the FCC can result in action against scammers.

Here are some ways to avoid scammers:

1. Never give out your personal details or payment information over the phone to an unverified number, even if the caller claims to be with a familiar business.
2. If an unsolicited call is prerecorded or automated and asks you to press a number to be connected with a live person, hang up.
3. If the caller immediately asks, "Can you hear me?" or another generic question, hang up. This is often how unsolicited robocallers verify that your number is active. Once a robocall system recognizes your phone number as active, it may place your number on a list for subsequent harassment.
4. If you think you may be speaking with a legitimate auto warranty company's representative, ask for a written copy of the policy they’re offering. This should give you time to think about your purchase and let you know what you’re signing up for.
5. Don't comply if the caller is speaking too quickly or takes an authoritative tone. Telemarketers and scammers are trying to manipulate reactions out of their victims. If you feel pressured, simply ask the caller to communicate appropriately or hang up.
6. File an unwanted call complaint with the Federal Communications Commission. While the FCC doesn't address individual incidents of auto warranty scam calls, the information you provide can help lead to enforcement actions against scammers violating FCC rules.

How to stop car warranty calls

If you answer a car warranty robocall, you may be directed to press any number to be placed on the company's "do not call" list. However, by doing so, you let the scammers know that your number is valid and there's a live person using that particular line. These lists are also not the same as the National Do Not Call Registry.

If you haven't put your phone number on the National Do Not Call Registry, doing so allows you to report unsolicited calls directly to the FTC. Registering your phone on the Do Not Call list is free. It could take up to 31 days for your number to appear on the registry, though.

You may be able to use your smartphone to help filter out annoying car warranty calls. An iPhone can route unknown phone numbers directly to your voicemail, and Google's Pixels have a feature that can automatically block spam calls.

Bottom line: Is a car warranty worth it?

It's crucial to stay vigilant to keep yourself (and your bank account) safe from scammers, but this doesn’t mean all warranty providers are illegitimate. Working with a legitimate warranty provider can save you money if your vehicle needs expensive repairs in the future. If you think an extended car warranty is a good fit for your situation, look into vehicle service contract providers with a history of positive customer reviews.