The Federal Trade Commission (FTC) is warning consumers about CarShield, claiming the car service contract company isn’t covering car repairs as advertised.
The FTC says CarShield isn’t being transparent with customers about exceptions and exclusions to their coverage.
“You might’ve seen one of the TV ads — celebrities touting CarShield’s promise that “you’ll never pay for expensive car repairs again.” If you called in, a “specialist” confirmed what the ads promised and offered to sign the contract on your behalf. But after you gave your OK, the FTC says customers got a thick document full of many, many exceptions and exclusions. If you tried to use your coverage, you’d discover CarShield might require you to pay to find out what caused your breakdown, might fail to cover repairs, and might decline to give you a rental car until your claim is approved. The FTC says CarShield customers also had trouble finding a mechanic willing to accept their CarShield contracts,” writes Ari Lazarus, Consumer Education Specialist, FTC.
If you’re considering buying a car service contract, the FTC recommends these tips:
- Never agree to a contract you haven’t looked at first. Look for exclusions that deny coverage or restrict where you can get your car serviced. Does the contract match the coverage the salesperson described to you? If not, walk away.
- You don’t need (or want) duplicate coverage. Check to see if your car is already covered by an existing warranty. You might already have the coverage you were looking to buy.
- Don’t rely on celebrity endorsements alone. It’s helpful to look at reviews from a variety of sources, like trusted websites with impartial expert reviews. Also be on the lookout for fake reviews.
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