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• You're on notice 1/7/08

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Mike Benbow, Business Editor benbow@heraldnet.com

Vehicle warranty notices after one thing: your money

By Mike Benbow

The card I received about a month ago warning that my vehicle warranty had expired was so laughable that I pitched it.

The card itself wasn't the least bit funny. In fact the state Attorney General's Office made it the subject of a consumer alert last week. But the fact that it was referring to my 1997 Ford Ranger cracked me up.

I've mentioned my vehicle before. Things started breaking about a week after the manufacturer's warranty had run out. My brother has the same model and has had similar problems about the same time.

It's simply a bad truck. Bad enough that Consumer Reports Magazine once put it on a list of used vehicles that it warned people not to buy because of its long list of problems.

They're mostly small ones that aren't all that expensive to fix or are easily ignorable. For example, the sensor in my door doesn't work. That means a dash light always says my door is ajar and my interior light doesn't always turn off immediately when I park.

Because a timer turns the light off after a half hour, I've ignored the fact that I need to replace the sensor. But I can't go to a party without someone walking in and looking for the driver of the Ford pickup whose dome light is on. They worry, unnecessarily, that the battery will die.

A couple weeks ago, I got a second warranty postcard with "Second Notice" in bold red letters. I ignored that, too, and the attorney general's office thinks I made the right decision. "...these mailers are advertisements aimed at pressuring you into buying an expensive service contract," it warned. "The Washington Attorney General's Office, like other agencies throughout the country, has noticed an increase in consumer complaints concerning postcards from out-of-state companies offering extended warranties," the alert said, noting that they're designed to look like official notices from the manufacturer.

I fumbled around the old cans of Diet Coke on the floor and found the card that was sent to me a couple weeks ago.

"The importance of having full warranty protection is at an all-time high," it says. "If you have not extended your warranty yet, you must call (toll free) on or before the deadline date." It notes that repair costs will leave me responsible for "labor rates from $90 to $140 per hour." and offers "employee pricing plus 0% financing".

In the consumer alert, Assistant Attorney General Mary Lobdell calls the pitch what it is: "...ads from businesses that want to sell you an optional, pricey plan to cover future repairs."

Lobdell said people need to shop around before buying these extended warranties or service contracts. It's important, she said, to know exactly what you're buying.

Here are what Lobdell says are key things to know:

What's covered: The contract is typically only for listed repairs and maintenance for a set period of time. Exemptions are huge. If the contract doesn't mention something specifically, it's likely not covered.

Escape clause: State law allows you to return the agreement within 30 days if you haven't made a claim. If you do it within 10 days, you're entitled to a full refund. Later, you may receive only a prorated refund and also may have to pay a $25 cancellation fee.

Contract value: Check the condition and quality of your car. It may be cheaper to self-insure by just setting aside money for repairs and not paying for a service contract. Contracts are negotiable, so don't be afraid to barter. When buying a car, negotiate an extended service contract separately from the car price and financing.

Location of service: Some plans are only good at certain dealers.

Is the company reputable: Ask your mechanic if they've heard of the company and whether it honors its contracts. Check its history with the Better Business Bureau.

The bottom line is don't allow yourself to be pushed into one of these contracts by an offer that is tricked up to like it's coming from your manufacturer. Decide whether you even need a maintenance contract first, then work to get a good deal by checking your options.

And the last thing. If you have a 1997 Ford Ranger, make sure the door sensor is covered in the contract.

Mike Benbow: 425-339-3459; benbow@heraldnet.com