Warranties and service contracts 101

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Ever wonder about the difference between a warranty and a service contract? Well, wonder no more.

Many consumer products, including cars, appliances and electronic devices come with a warranty — the manufacturer’s promise to stand behind the product. Warranties are included in the price of the product. If a company offers a warranty, it must be available for you to read before you buy — even when you’re shopping by catalog or online. It’s the law. However, what a warranty covers varies. So, when you’re shopping for things by price or style, consider comparing what the warranty covers, too.

A service contract is sometimes called an “extended warranty,” but service contracts are not warranties. A service contract can help you fix or maintain your product for a specific time — like a warranty. But, unlike a warranty, service contracts cost extra. When you’re shopping, compare specific manufacturers and products. You might find that some service contracts give you the same coverage you get from the warranty that is included in the purchase price. Some service contracts cover only part of the product, and some make it nearly impossible to get repairs when you need them. And, if repairs are cheap, you might not really benefit from the extra cost of a service contract.

Auto service contracts are different. They’re sold by car manufacturers, dealers, and independent companies. Usually, they won’t kick in until the manufacturer’s warranty expires. If you’re thinking about an auto service contract, shop around so you understand exactly what you’re buying and to ensure you are not buying overlapping coverage. What you get varies widely, as does what you pay for it, so be sure you know what the service contract covers.

No matter what you’re buying, some consumer advocates suggest that you might be better off skipping service contracts. Instead, they recommend putting that money in a savings account. That way, if you need repairs, you’ll have savings to fall back on. And if you don’t need repairs, you’ll have some cash in the bank.

Blog Topics: 
Money & Credit

Comments

Norton have made me, two charges to my credit card withouth my autorizathion

please let you help me by stoping scam messages about income.

please how can take part about this issue

Thank you FTC.

Can you help block scammers and people using or try to take my income and autroization use of my credit cards

Remember also that when a company asks you at the point of purchase if you want to buy a "warranty", i.e. service contract, that service contract over laps the manufacturer's warranty. For example, if you receive a one year manufacturer's warranty, and buy a three year service contract, the first year overlaps, thus, in essence, you are paying only for a two year contract.

I purchased A "Service contract" for my used car in 2007 for 5 years and $2,100. 75,000or 5 years (what ever comes first). my previous auto had the same "Service contract", but was at another Auto dealer, and it was used with no problem. The Service contract I purchased from the second Auto dealer was to be a 5 years.or 75,000 miles. after 3 years ( 2010 ), i had to use this ,but was told " the contract for was omly good for March 2004, ( delivered date), to march 2009! ) I tried everything ,with no effort on my part. I paid $100.00 a mile for this "service contract". My door was damaged by one of the service workers , but was denied when I reported it. Thank You Bill

I purchased a T.V. from Wal-Mart never used the line of credit for anything else. It was on a promotional code, over 500.00 no interest if paid with in 24 months. I pd off in 9 months. I have been having problems with Wal-Mart making the amount owed on my bill to the correct owed amount. since Sept., Oct., of 2014. Now they say I used the charge card for 87. dollars for something. I do not use credit card or the cash advance card for anything.I know know it's not best to improve credit with these store cards.

Don't give up, that's what they want you to do! Gather all your receipts and write Wal-Mart a nice firm letter. Send it to the director of the credit card dept. Since it has been since 10-2014, don't waste anymore time. I experienced a similar problem with a different retailer, but I finally got my refund. It took me 2 mos and 3 weeks to resolve. Make sure to keep accurate records. Doing so is key to satisfactory results.

Also if I'm not mistaken, warranties (type, duration, coverage, etc.) can vary from state to state so it might be a good idea to check with the Consumer Protection office in their state.

I was driving a new Audi, it burned in a car fire with electrical shortage according to the insurance. the company recovered insurance money for the car, but I did not receive payment for medical or my belongings. I tried to talk to several attorneys about it, but couldn't get past the intake persons. I believe the short was between the iPhone and the Audi navigation system. Shouldn't This be investigated. I could have died! It would have cost me less if I had.

If you want to see a real scam just read your Manitoba Hydro bill. how is it legal to tax a tax. If you look at your bill this is what you will see. 5.00% City Tax 1.60% Prov. Tax 5.00% GST 5.00% GST on City Tax. is this even legal or just in Manitoba

how much time does the dealer have to fix my warrantied transmission? they have had the car for over three months and keep telling me the part i need is on back order. how long can they keep the car before i can take legal action?

can someone answer this question, im in Manitoba Canada and my car has been in the shop as well for almost 3 months. this is ridiculous, its costing me money registering it. HELP

You can contact the consumer protection agencies in your area and explain the situation.

I have aa kenmore french door refrig purchased april j2011 it was made for sears by g repairman has been at my house 7 times and temp inside refrig is 80 degrees. What are my legal rights it has a warranty but they keep trying to repair it. We have had no refrig since dec 4 it is now dec 29

You may need to speak to a supervisor or someone at the company’s headquarters. Many companies include a toll-free number or email address for their customer service department on the product packaging, warranty, or receipt. If that’s not the case, visit the company's website and look for a "Contact Us" link, or call 1-800-555-1212 for toll-free directory assistance. For more tips, please see Solving Consumer Problems.

Hello.. can u help me to understand about the warranty. .I buy laptop 4months ago ang it is 2years warranty I had a trouble on it no bootable device. . I ask whats the problem they said they can't detect the hard drive that's why no bootable device.. so they want me to leave the laptop for fix it coz they said it is warranty and saying they said minimum to fix 1month maximum 3months. I been waiting morethan 2months and I call for update they said.. I am void to warranty I ask why. They said at the back of laptop there is small paper wrote warranty and it is broken which is they void my warranty..I get mad Coz why they don't tell me before about the issue and why I need to wait for that long.. also..they said I open the laptop back that cause me void and I am xplaiNing them never ever open the laptop.. and now they don't fix it.. can u help me please what to do..about this..I really do not open the lappy and they do not fix it .. they ask partial payments for fix. Pls help thanks .. pls advice me thanks

This FTC article about warranties has more information. The article explains how to write to the manufacturer if the seller won't resolve the problem.

You also need to know what coverage your warranty gives you. For example, your warranty might say some parts of the product or some repair problems are not covered. The warranty might say you must pay for labor charges. Read the warranty to see if it says:

  • Who to contact to get warranty service.
  • What the manufacturer will do if the product fails.
  • What parts and repair problems are covered.

 The article about warranties tells more about what you could do if you have warranty problems.

Service contract and warranties should be checked before you buy any car. This will help to understand that what are the parts of car coming in warranties and how much service charge dealers going to apply.

i routinely purchase 5 year protection agreements from sears for washer/dryer units for my business. They allow COD (no warranty or protection agreement) customers to book appointments online but warranty and PA customers must call a toll free number to make an appointment. i always look at both methods and the COD customers are always put ahead. A Sears tech recently confirmed this is the practice. Many times the warranty/PA techs don't even show up. i believe that Sears is intentionally selling agreements with the intention of subordinating them to COD customers. This is certainly unethical but my question is "is it illegal?" and if so how can i expose them? it is easily proved by booking an online appointment while calling a warranty/PA rep and comparing the soonest available dates for the exact same address.

We purchased a treadmill from Sears, paid for professional delivery and installation. They set it up in our garage as requested. At no time did they advise the manufacturer warned against set up the garage nor did they provide us an owners manual until after the fact. Within the month the treadmill stopped working. We contacted Sears and were referred to NordicTrack. The NordicTrack technician came to our home immediately advised the warranty was voided due to the location of the machine. He repaired the machine stating they would not repair again, he took pictures of the treadmill in the garage and left. We paid to have the treadmill moved into our home. Approx one month later the treadmill stopped working again. I contacted Sears requesting a pick up and refund. I was told they are not responsible for anything. They were negligent with their delivery and we have had problems with the treadmill since that time. Disappointed as we have been lifelong customers of Sears.

AUL Corp. sells service contracts that are not required to coincide with the manufacturer's warranty. Ask about the warranty remaining option to get the most out of your coverage.

That doesnt make any sense. That is like saying to cancel your life insurance, car insurance, or home insurance - just "save up" and pay out of pocket if something happens. SMH - Come on, consumers look to you for guidance, not a bunch a copy cat nonsense from Dave Ramsey.

Purchased a Samsung TV in 4 Nov 2012 with extended warranty. TV was delivered in Dec 2012. Had problem with TV in 2017, logged a warranty claim on 16 Nov 2017. Company approved the registration and approved a technician to come check it out. Now denies the claim saying that the warranty expired on 3 Nov 2017 because it was purchased on 4 Nov 2012 instead of it having expired in Dec 2017 as we only had delivery of the TV at that point. Delivery was delayed because of shipping and availability of inventory. How to do we get the service company to understand that I cannot have a warranty commence for something that I do not have possession of.

You could contact your state Attorney General about this.

My fiancee financed me a MazdaSpeed3 in Oct 2016. In March 2016 the turbo & VVT actuator failed. We purchased a service contract through the dealer but he is not the administrator. They denied the claim & voided any powertrain coverage because of a "cold air intake". We hired an attorney who sent them a letter demanding approval of the claim stating the Mag Moss Warranty act requires them to prive the aftermarket part caused the failure. Even included a lbetter from Ron Tonkin Mazda saying the intake could not have caused the failure. The service contract provider responded saying Mag Moss does not protect service contracts & that this was not a non OEM issue but a "modification of the vehicle manufacturers original specifications".
So we dropped that & were going to file a TILA, UTPA & a few,other claims against the dealer but our attorney just discovered, after 7 months of "representing" us the dealer has more claims then just ours & the other case he had aganst the same dealer so the bond limit may already have been reached theirfor he might stop representing us on contingency due to a conflict of interest.
Haha! So I turned back to Mag Moss, ive been doing all my own research on consumer law & have been the 1 recomending what all we file under this whole time. Anyways turns out the "cold air intake" the claim was denied for is in fact not a cold air intake but a short ram intake which doesnt change the configuration or the air/fuel mix & works just the same as an OEM part. Been emailing with the intake manufacturer.
My queations are;
1 if they still consider the short ram intake a mod does Mag Moss protect us making them having to prove the failure was caused by the intake.
2 if it ends up not being considered a mod & they apprive the claim & pay for repairs can we get reimbursed the $1000 in rental cars (ended up buying a cheap $1000 car because rentals were $200/so) & the $1000 in attorney consults & fees weve pages?

It seems like you're asking for legal advice. This blog doesn't give legal advice.

Well the funny thing about that is we have spoke with 4 attorneys. The 1st attorney we met with was an "auto fraud" attorney who had never even heard of Mag Moss & he couldn't represent us because the arbitration would take us out of Oregon & into California where he is not licensed. The 2nd attorney was just a phone,consult & was going to represent us but by the time I sent over all the documents he had taken on too many cases so referred us to the 3rd attorney who took us on contingency. Who then too took on too many cases & passed us on to his colegue. Who is currently our attorney for the time being until he figures out if there is a conflict of interest. But in regards to filing under Mag Moss he is not willing to do it on contingency nor is his Fathe, who will be attorney #5 if its a nonwaivable conflict of interest, because they are not sure if service contracts are protected under Mag Moss so do not want to risk not getting paid. So its not a matter of legal advice. Its a matter of the way the act is written not any of the 5 attorneys weve met with are sure if service contracts, also known as extended warranties can deny a claim & as in our case voided the powertrain coverage because of an aftermarket part that the dealership even said could in no way bave caused the failures. Is there someone I can write to or call because our attorney seems to not be doing anything on our case. Like I mentioned I have learned so much abt consumer law I feel I could present our case myself.

Received notice for warranty expiration from Motor Vehicle Services
They sent me notice to call asking me car information its warranty. They do not even have my car information? They ask VIN number and make model and then warranty. I called them to my current warranty and I thought it was the service company that I purchased my car and service. I got trapped for my credit car information!?!! They sold phony warranties that we even do not need. I called my car company and confirmed that was a scam!!
Immediately went ahead and called back to cancel my contract , The person was not ready to listen to my cancel request...instead he asked me why even did you call us on first hand? Why did you conform for the contract when we were giving you the details?
A very bad experience dealing with the phony company.
Please be aware and do not call if you receive a phony notice for warranty Expiration!!!!!

"Trane Air Conditioners are overpriced and don't live up to the hype. Their extended warranty adds even more to the cost, and the claims process makes a Constitutional Amendment seem simple.

"Our expensive Trane air conditioner needed $2,280 in repairs (the largest repair bill we've ever seen) after only 8 years (by comparison, the generic unit the builder used lasted over 18 years with only minor repairs).

"Trane's warranty claims process is unfairly complex, requiring detailed breakdowns of labor and parts that must be provided by the company doing the repairs, few of which will agree to the hassle. (Why should they? They get paid regardless.) The end result? NO reimbursement for repairs that are the most expensive in the industry.

"Don't fall for the extended warranty ruse, whatever the product. They are nothing more than extra profit for the seller and disappointment for the buyer. Keep that extra warranty money, cross your fingers and plan on paying for repairs yourself, which you'll end up doing anyway, just like we did."

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