When you buy a used car, the salesman these days almost always pitches an extended warranty.
And they can be a good idea, given that a car repair can cost from $500 for a fuel pump to $3,000 for a transmission.
But one man discovered a big catch with some of these plans: they don't last as long as you would think.
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Wants 7 years of protection
Josh Eisele recently found a great deal on a 3-year-old, gently used Honda Civic. "It has only 19,000 miles on it right now," Eisele said.
The salesman suggested he buy Honda Care, a bumper-to-bumper extended warranty direct from the manufacturer, the best type you can buy.
"It covers everything that the original warranty covers and then some," Eisele said. "I am pretty sure he told me it was good for 7 years from that date, the date we were talking."
So he agreed to pay $1,200 for 7 years and 100,000 miles of hassle-free coverage. But when Honda mailed him his "Honda Care" paperwork, he discovered a problem.
"It was only good from the year the car was originally purchased, so it was only 4 years, not 7 years," Eisele said.
Confusion over starting date
This is a common complaint with extended warranties, because there is a lot of confusion on when that warranty actually starts.
Eisele says he was specific with the salesman: He wanted coverage the full 6 years of his loan. "He said that's great; we can offer you this. It will cover the term of your loan, and he sold me on it."
But it turns out many manufacturer extended warranties -- not just Honda's -- start from the original in service date, and expire at 100,000 miles. It is extremely rare for a warranty you purchase at time of sale to extend past 100K.
We spoke with the general manager at Eisele's Honda dealer, who said "the salesman may not have clearly explained Honda Care, which led to a misunderstanding."
However, after the dealer learned we were getting involved, he agreed to add another year of coverage free of charge.
Bottom line: Read the fine print and ask tough questions when buying an extended warranty.
And get all the dates in writing, so you don't waste your money.
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