Lending Club Blog

Extending Your Car’s Warranty

A recent stream of automotive warranty extension mailings has led me to look further into the industry. What I’ve found has been eye-opening.

At first, receiving a reminder card about renewing my car’s warranty seemed strange. My car is still rather new and the warranty doesn’t expire for quite some time. It wasn’t until I read the fine print that I understood why I was getting the notice. My confusion came from the fact that the notice appeared to come from my car’s manufacturer, when in fact it was sent by a third party. It was filled with warnings and a sense of urgency, all of which were designed to make me act quickly.

As I received more and more of these offers, I was amazed at how deceptive they were. To the untrained eye, they really did seem to be important notifications from my manufacturer. Looking into it further, I found this article about the practice. In it, Herb Weisbaum notes that these products are not only deceptive, but also expensive and limited in coverage.

If you are worried about expensive car repairs after your original warranty expires, you can build up an emergency fund for this purpose. Lending Club can help in a number of ways. Obviously you could take out a P2P loan to cover any unexpected expense, but you can also use a loan to consolidate your debt to make it easier to build up an emergency fund.

If you do want to extend your warranty, the referenced article says that dealers tend to offer much better deals, which are negotiable, than the third parties that you’ve been hearing from. Even then, the article cites a consumer advocate who recommends that car owners skip extended warranties altogether because they are rarely worth the money. So there’s another reason for going the emergency fund route. Whichever way you decide to go, don’t fall for the pressure and deception of unsolicited third party mailings you may receive.

Monday, March 24th, 2008 at 7:18 am

Comments (1)

  1. John at used cars Warrensburg MO:

    A lot of these third party warranty companies are a big rip off.
    Many of them sell a ton of policies then fold and open up with a
    new business name. If you do purchase an extended warranty always
    make sure it is from the manufacturer and not a third party, or
    better yet, as the post says save up in advance or get a low
    interest loan.

    May 21st, 2012 at 3:28 pm

  • Archives z

Recent Posts

Our Billion Dollar Quarter

We’re excited to announce  that we’ve facilitated over $5… Read More »
July 8, 2014

Is Lending Club Available in My State?

Is Lending Club available in my state? That is… Read More »
July 7, 2014

5 Things Everyone Should Do Before a First Interview

After spending hours drafting your… Read More »
June 24, 2014

Lending Club Joins Senator Cory Booker to Discuss Improving Access to Capital for Small Businesses

Read More »
June 20, 2014

Lending Club Named a CNBC Top 50 Disruptor for a Second Year

For the second year in… Read More »
June 17, 2014

PRIME is now Automated Investing

Lending Club is excited to announce that PRIME has… Read More »
May 14, 2014

Why Dana joined Lending Club, or, four things you should look for when you make your next move

Read More »
May 14, 2014

LendIt 2014

LendIt 2014 opened with a bang on Sunday night… Read More »
May 5, 2014

We’ve acquired a company!

Today we’re excited to share the news that we… Read More »
April 17, 2014

Lending Club customer information safe from Heartbleed Bug

You may be hearing about… Read More »
April 11, 2014