Friday, April 20, 2001

George Mindling Column 4-20-2001 - Caveat Emptor

Caveat Emptor

While waiting for my car to be brought around to the customer pick-up area not too long ago, I couldn't help hut hear an angry young customer venting her rage on the auto dealer service manager.

"You told me yesterday that my car would be ready!" she screamed. “There it sits, and I can't have it? I wish you would tell why! I'm late for work," she wailed.

The service manager tried to explain to her that for some reason, the company she had purchased her extended warranty from had not sent the payment, even though the previous evening they had approved the work by fax. The dealers hands were tied. They could not release the car without the promised payment.

Apparently, this particular extended warranty company was notorious for not paying the dealer for work accomplished. regardless of what the policy owner thought. The young woman was livid, and soon her mother arrived to pay the bill with her charge card. The mother was not happy either, and did her best to make life miserable for the people at the dealership. The manager told her she would be reimbursed as soon as the warranty company paid for the extended warranty work.

The young woman picked up her car and left in a huff. I went over to the service manager to find out . what happened, as customer service is always a sore point with me.

"We offered her a car to use while we waited on the warranty company to pay, but that wasn't what she wanted," explained the manager. I asked why the insurance company hadn't paid.

“Don't use the word 'insurance' company," said the manager. The companies that sell after market extended warranties most certainly want to avoid being called insurance companies! If they were insurance companies, they would have to operate under the state laws governing insurance."
That in itself was an eye opener. I asked, "Why doesn't the company pay for the work? Wasn't it covered by the extended warranty?"

"Oh, yes! The extended warranty supposedly covered the work, they just don't like to pay!" was the answer. Apparently, there are several extended auto warranty firms with bad names and reputations as far as responsive payment for repairing or replacing parts that fail while under the extended warranty.
The consumer pays extra for these extended warranties, and only a few are offered by the automobile manufacturers themselves. If the warranty company doesn't pay the bill. the car owner is stuck paying out of his or her own pocket. I asked the service manager if the extended warranty that refused to pay was offered by that dealership.

"No, we offer a program, but it is a company extended warranty. The one the young lady had is one she bought after she bought the car," answered the manager. "We get these all the time and we explain to the customer about how the payment for service works."

Check with you dealership before buying an extended warranty that isn't from the dealer. You may be saving yourself grief later. Like when you're late for work.

George Mindling © 2001

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