Jun 3, 2009

What About My Warranty?

Are you among the vehicle owners nationwide who have purchased extended warranties from a dealer or third-party provider? Are you questioning if your extended protection plan is still viable? Do you wonder how you should file repair claims following the recent announcements by Chrysler and GM automakers that nearly 2,000 dealerships are being closed? Well, you can rest your pretty little head. According to the Service Contract Industry Council (SCIC), a trade group representing companies that sell and/or administer vehicle service contracts -- sometimes called extended warranties -- auto service contracts or extended warranties will still be viable after a dealer closes.

“Extended warranties sold by a dealer are guaranteed either by the manufacturer or a third-party provider or insurer, and the warranty repair work can be performed at another dealership or at other authorized repair centers,” said Timothy Meenan, SCIC executive director. “Many contracts obligate third parties that are not the manufacturer or dealer and are backed by providers and insurers regulated by state departments of insurance.”

Although there have been recent news reports detailing aggressive telephone sales of service contracts, the substantial majority of service contract sales take place face-to-face in a dealership. The council strongly encourages consumers to read the terms and conditions of the service contract, ask questions of the dealership representative, and contact the toll-free number of the service contract issuer found on the service contract or the department of insurance with any concerns or questions.

Chrysler, which is reorganizing under Chapter 11 bankruptcy proceedings, has the bankruptcy court’s permission to continue paying extended warranty claims. Consumers with extended warranties from dealerships that have gone out of business or have closed should first attempt to contact the party obligated under the contract or the service-plan administrator whose name appears on the contract paperwork. After that, they should contact the automaker directly. If that fails, perhaps a prayer to St. Vinnie, the patron saint of service contracts, is in order.