Car Shield Exposed: Truth About Extended Warranty Lies

[army judge]

Jurisdiction

US Federal Law

We've all seen and heard the auto extended warranties. Many of us have been bothered with robocalls and texts. You may have missed this news, no shocker actually. If you purchased extended car warranty insurance - this is important.

The Federal Trade Commission (FTC) has charged CarShield with deceptive advertising charges. Car Shield will be required to pay a $10 million fine to the Federal Trade Commission over a case involving deceptive advertisements. This is not going back to customers. Defendants are also barred from misrepresentations by its celebrity endorsers, including Ice-T.

CarShield, along with American Auto Shield, LLC, which is the administrator of its vehicle service contracts, will pay $10 million to settle FTC charges that its advertisements and telemarketing for auto extended warranties are deceptive and misleading, and that many purchasers found that many repairs were not "covered," despite making payments of up to $120 per month. The FTC also alleges CarShield's celebrity and consumer endorsers made false statements in its ads.

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The charges ordered also bars CarShield and AAS from making deceptive and misleading statements in the future and requires them to ensure their endorsers' testimonials are truthful, accurate, and not deceptive. Other brands are doing the same thing, buyers beware.

Samuel Levine, the Director of the FTC's Bureau of Consumer Protection said that "Instead of delivering the 'peace of mind' promised by its advertisements, CarShield left many consumers with a financial headache. Worse still, CarShield used trusted personalities to deliver its empty promises. The FTC will hold advertisers accountable for using false or deceptive claims to exploit consumers' financial anxieties."

The complaint alleges many ads claim that all repairs or repairs to "covered" systems, such as the engine and transmission, will be covered and use language that makes consumers believe CarShield will pay for all necessary repairs. For example, one ad that ran 18,000 times on television stated, "With CarShield's administrators, they make sure you don't get stuck with expensive car repair bills like this." It also touts CarShield auto extended warranties as "your best line of defense against expensive breakdowns."

The company sells its plans using telemarketers who answer inbound calls and make outbound calls responding to consumers, including those who made web inquiries. Using scripted statements written by CarShield and cleared by AAS, the telemarketers pitch the auto extended warranties and tell consumers that, whether they use a dealer or local mechanic for the repair work, "there is just a $100 deductible for any covered repair."

However, consumers do not always get what they think they bought when signing up for the auto extended warranties. Instead, the complaint alleges that CarShield's ads deceptively represent that: 1) all repairs or repairs to "covered" vehicle systems will be paid for under the plans; 2) consumers will receive a rental car at no cost when their car breaks down; and 3) consumers can use the repair facility of their choice for repairs.

Specifically, many consumers could not use the repair facility of their choice, as many do not accept the auto extended warranties. Many consumers also find that repairs they thought were covered are not. In fact, none of CarShield's auto extended warranties covers all repairs or even repairs to "covered" vehicle systems. Instead, the plans contain myriad exclusions. Consumers with denied claims receive no rental car, while many consumers with "approved" claims must pay a portion of their rental car costs.

In addition, while CarShield's celebrity endorsers said they had signed up and used the company's auto extended warranties, in many cases this was not true. They were not "real" customers and had never saved money by using an auto extended warranties. Finally, many CarShield ads deceptively feature consumer endorsers who claim to have saved a specific amount of money using their plans but have not in fact saved that amount.

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The order imposes a $10 million monetary judgment against CarShield and AAS, which will be used to provide refunds to defrauded consumers. The full amount of the judgment must be paid to the FTC within seven days of when the court enters the order.

Buyer beware when it comes to extended auto warranties, they are not always what they claim to be.

https://www.newsmax.com/finance/laurenfix/car-shield-ftc-deceptive/2024/08/19/id/1177059/

 

[Redemptionman]

If you buy a warranty from a reputable company at the time of purchase for a new truck or car then I do not see a problem. However, Car Shield really doesn't have a qualifier and sells their warranties on most vehicles regardless of condition. This false hope gives people who take the warranty the inability to understand that if your vehicle is on its last legs and usable life then Car Shield is not going to just fix your vehicle. It is deceptive and it prays upon the economically vulnerable to make it seem to be something that it isn't. Good for the FTC.

 

[army judge]

On July 31, 2024, the Federal Trade Commission announced that CarShield must pay $10 million to settle charges that its advertisements and telemarketing for vehicle service contracts are deceptive and misleading, and that many consumers found that repairs were not covered. The company said in a statement that its marketing now offers consumers more details about the car repairs typically covered and notes that customers can visit its website, where they can look at full plans before buying. The MarketWatch Guides team is reviewing this information and will reevaluate all CarShield rankings.

CarShield and Endurance are two of the top names in our industry-wide review of the best extended car warranty providers. In this article, we at the MarketWatch Guides team will compare these two companies by exploring their coverage plans, costs, industry reputations and customer service.

Key Takeaways:

• Our team gives Endurance 9.3 out of 10 stars and our Most Comprehensive Coverage award.
• We give CarShield 8.8 out of 10 stars and recognize the provider for its Affordable Monthly Payments.
• Unfortunately, Endurance and CarShield both currently have C- ratings by the Better Business Bureau (BBB).

Comparing CarShield and Endurance

Both CarShield and Endurance are well-known extended car warranty providers with large customer bases. Expansive coverage, competitive rates and solid customer service help both companies maintain strong industry reputations.

	CarShield	Endurance
Years in Business	Founded in 2005	Founded in 2006
Availability	All states except California	50 states (mechanical breakdown insurance in California)
Number of Plans	7	6
Mileage Limit	300,000	200,000+
Better Business Bureau (BBB) Rating	C-	C-
Our Award	Affordable Monthly Payments	Most Comprehensive Coverage

*We reached out to Endurance and CarShield both for their low industry ratings by the BBB but did not receive a response from either provider.

CarShield Overview

CarShield has been in business since 2005. You've likely seen plenty of TV and online ads for the Missouri-based company. CarShield features five long-term automobile protection plans, one plan for electric vehicles and a seventh option reserved for motorcycles and ATVs. The company stands out from the competition by offering protection that lasts up to 300,000 miles.

Read our CarShield review.

Endurance Overview

Endurance was founded in 2006 and is headquartered in Northbrook, Illinois. We give the provider our award for Most Comprehensive Coverage thanks to its six different plans and the fact that it includes maintenance benefits. Endurance also stands out from the crowd because it's a direct provider of warranty plans. That can provide extra peace of mind because there's no plan administrator between you and your Endurance warranty.

Read our Endurance Warranty review.

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CarShield vs. Endurance Cost

Our team reached out to both CarShield and Endurance for quotes on extended warranty coverage. We gathered cost estimates for both exclusionary plans similar to bumper-to-bumper factory warranties and powertrain plans that cover essential engine and transmission components.

Bumper-to-Bumper Warranty Cost Comparison

We compared the providers' comprehensive protection plans for a 2021 Toyota Corolla with 30,000 miles. Both plans came with a $100 deductible. CarShield requires a down payment equivalent to the first monthly payment, while Endurance waives the down payment for customers who sign on the same day they receive a quote.

Here are the warranty cost estimates we received from CarShield and Endurance:

Plan Name	Term Length	Monthly Payment	Total Cost	Cost per Year
CarShield Diamond	Unlimited	$119.99	Varies	$1,319.88
Endurance Supreme	4 years/42,000 miles	$116.10 for 30 months	$3,692	$923

Powertrain Warranty Cost Comparison

For powertrain coverage, we received quotes for a 2017 Chevrolet Equinox with 90,000 miles. As with the exclusionary plans, CarShield requires a down payment in the amount of the first monthly payment. Endurance waives any down payment for customers who sign on for coverage the same day.

Here's how powertrain coverage quotes from CarShield and Endurance compare:

Plan Name	Term Length	Monthly Payment	Total Cost	Cost per Year
CarShield Gold	Unlimited	$119.99	Varies	$1,319.88
Endurance Secure	4 years/60,000 miles	$135 for 30 months	$4,205	$1,051.25

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CarShield vs. Endurance Extended Auto Warranty Coverage

The extended warranty coverage CarShield and Endurance offer are similar in many ways. Both providers feature high mileage limits, expansive plan options and the freedom to use any repair facility certified by the National Association for Automotive Service Excellence®(ASE). There are some differences to note as well. Here's a breakdown of the vehicle protection the two companies provide:

	CarShield	Endurance
Coverage Levels	7	6
Mileage Limit	300,000	200,000+
Waiting Period	30 days and 1,000 miles	30 days and 1,000 miles
Online Sample Contracts	✓	✓
Roadside Assistance	✓	✓
Rental Car Reimbursement	✓	✓
Trip Interruption Benefits	✓	✓
Maintenance Coverage		✓

Both companies offer warranty plans that range from basic powertrain protection to full bumper-to-bumper coverage. There are also specialty plans on offer from both providers, with the EnduranceAdvantage™ package focusing on scheduled maintenance and CarShield's Aluminum plan designed for luxury vehicles with high-tech appointments.

CarShield vs. Endurance: Company Comparison (2024)

In comparing two of our top-rated warranty providers, our team found that CarShield has the best pricing and Endurance boasts excellent customer service.

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[welkin]

If you buy a warranty from a reputable company at the time of purchase for a new truck or car then I do not see a problem.

There are plenty of problems that arise when buying an extended warranty through a dealership at the time of purchasing a new vehicle. I know, I've been there.

When I purchased my Chevi Silverado, the salesperson asked if I wanted an extended warranty. Is it a GMC warranty, I asked. It's the same as the GMC warranty, he said. Show me what is covered, I said. Ok, it looks pretty comprehensive. The cost was over $2K.

About 3 weeks after the transaction, I receive in the mail, an offer to purchase a genuine GMC extended warranty that was much more comprehensive and cost considerably less. I called the dealership and told them I wanted to cancel the warranty they sold me, and I want to get a refund. They said sure but it won't be a full refund, and we will have to have the refund calculated for the 3 weeks of coverage. That never happened despite many calls and visits to the dealership. As time went on, I just stopped trying and left the warranty stand.

Just about the time the warranty was to expire because of time (I think 7 or 8 years), the truck developed a predatory battery drain and something was killing my battery. The dealership said it was my heated side-view mirrors that go on when the rear defroster is turned on which is almost never because there is a cap on the truck bed. That didn't make sense to me but told them to put in a claim and if covered, to replace them. The claim was denied because the mirrors were made of glass and glass was not covered. That is BS because the mirrors are part of the electrical system which was covered. The dealership was completely wrong on what was causing the drain.

I brought the truck to another (an accredited dealership) with a very good reputation. Within an hour of dropping off the truck, they called and told me the problem was a corroded circuit board in the fuse block that was causing the problem. I had to pay for the repair on a warranty covered part because the dealership was not doing business with the warranty company my warranty was with.

I filed a claim with the warranty company and after a few weeks of back and forth and sending in invoices and accreditation document of the dealership they finally made me whole. That was after the warranty expired. But since the initial claim was made before expiration, they paid. It was a lot of time and effort.

Also, since dealerships get a higher percentage of the third-party warranty cost, they often push them instead of OEM warranties that have more coverage at less cost. And there are plenty of case where the dealerships never send the money to the warranty company and when a customer files a claim, the company has no record of the warranty.

 

[Redemptionman]

Maybe but when I purchased one for my Tundra it came with the contract which had every component and issue they would cover on it. It is a 3rd party warranty but it goes to 150k miles or 10 years and it was around 2x times the money you said you paid. I am not really worried about it since the warranty company is large and they don't have a deductible for an in network dealer. The out of network deductible is $100 dollars regardless of repair price. This should be in your contract as to what they will cover and will not. The manufacturer warranties don't go that long on mileage nor time typically. I am not sure if I will have to use the warranty since it is a Toyota and they are for the most part flawless up to 200-300k miles.

 

[welkin]

Maybe but when I purchased one for my Tundra it came with the contract which had every component and issue they would cover on it. It is a 3rd party warranty but it goes to 150k miles or 10 years and it was around 2x times the money you said you paid. I am not really worried about it since the warranty company is large and they don't have a deductible for an in network dealer. The out of network deductible is $100 dollars regardless of repair price. This should be in your contract as to what they will cover and will not. The manufacturer warranties don't go that long on mileage nor time typically. I am not sure if I will have to use the warranty since it is a Toyota and they are for the most part flawless up to 200-300k miles.

When the time comes that you need the warranty, I hope for your sake you are correct. But don't hold your breath. Third-party warrantees sold by dealerships are always some sort of scam where there is always an out for the coverage in the small print. I will never buy any warranty that is not an OEM warranty backed by the manufacturer again.

The manufacturer warranties don't go that long on mileage nor time typically.

I would rather have a sure thing on my coverage then be scammed when I need the warranty the most. I guess that most new vehicle buyers never use the extended warranty during its lifetime. They always seem to expire just when you need it. I wonder if that is by design.

 

[Redemptionman]

When the time comes that you need the warranty, I hope for your sake you are correct. But don't hold your breath. Third-party warrantees sold by dealerships are always some sort of scam where there is always an out for the coverage in the small print. I will never buy any warranty that is not an OEM warranty backed by the manufacturer again.

Yeah, I can see that point but the contract for what they cover is pretty straight forward not many outs when they say they will cover this and list it out. I read the contract thoroughly and the components are listed in the contract. Normal wear and tear items are not covered.

 

[Stacy231]

Wow, this is huge. The FTC's action against CarShield is a real eye-opener. If you've got an extended warranty with them better read the fine print. This should be a wake-up call for everyone considering similar plans.

Seems like it's more about making money off us than providing real coverage.

 

[Redemptionman]

Wow, this is huge. The FTC's action against CarShield is a real eye-opener. If you've got an extended warranty with them better read the fine print. This should be a wake-up call for everyone considering similar plans.

Seems like it's more about making money off us than providing real coverage.

most all insurance policies are this way with few offering ACV replacement. You have car and homeowners insurance then you in affect have to deal with the same thing.

 

[Tax Counsel]

most all insurance policies are this way with few offering ACV replacement. You have car and homeowners insurance then you in affect have to deal with the same thing.

It isn't the terms of the policy that are the problem with the Car Shield case anyway. It's how the company marketed its warranties that's the real problem. It evidently represented in their ads and in communications with prospective customers that the extended warranties covered a lot more than they actually did cover and represented that their extended warranty would be accepted by most repair shops, which it knew was not true. In other words, a classic consumer fraud/misrepresentation case. Consumers need to be skeptical about the shine that salespeople give them about how great their product is. When buying a warranty, a consumer should read the actual warranty terms. Unfortunately the vast majority of people don't do that and just rely on what the company rep told them.