There are many places to buy a warranty, from the car dealer, warranty companies, warranty agents, brokers, insurance companies, credit unions or marketing firms. Each has it benefits and drawbacks. However, there are a few places you should never purchase a warranty from.

Through the Mail

If you get an official looking card or letter in the mail that may look like it’s from the manufacturer or dealership or if it says your warranty is about to expire, put it right in the trash. This is from a marketing company and not the manufacturer or dealer. These are substandard coverage plans and not worth the money. Manufacturers, dealerships and the respectable warranty companies do not send warranty notices in the mail. Although some unprincipled dealerships will sell your name to marketing companies, so it may look like it’s from your dealership, but it's actually a marketing company. Never buy a warranty from something you received in the mail.

Online Marketing Companies

The number one place not to buy a warranty is from an online marketing company. There are hundreds of marketing companies selling warranties. These companies look like legitimate warranty companies but they are actually call centers and generally have rather questionable coverage plans. Their number one job is to sell you any plan they can and get your credit card.

The Red Flags

1) Do they ask for your phone number on their website?

No respectable warranty company will ask for your phone number online to get a quote. If you give it to them you are guaranteed to be hounded by calls at all times of the day and night for the next few months. The top companies will allow you to enter just your email address and will email you a customized quote. They will never ask for your phone number up front just to get a quote.

2) Are they offering a special?

The major warranty companies do not have specials.  No mother’s day specials, no Christmas specials, no first time buyer’s specials. The reputable warranty companies do not offer specials of any type.

3) Did they offer a discount?

This trick is called “marking down the markup”. The way this works is they set the price really high then offer a big discount to give you the false impression of a deal. No major warranty company will do this.

4) Do they have TV or radio ads or “as seen on TV” or a celebrity spokesperson or sponsor NASCAR?

This is a tell-tale sign you are dealing with sophisticated marketing company. Absolutely none of the top warranty companies have TV ads, spokespeople or sponsorships, period.

5) Giveaways

One year of free coverage, free gas, free groceries, free trips or discount cards. This is the bottom of the barrel. No major warranty company gives away free coverage or anything else free to try enticing you into purchasing.

6) Do you have to purchase immediately?

This is simply high pressure sales tactics. There is never a need to make an immediate decision and no respectable company will do this.

7) Lifetime or Unlimited Mileage

Not one single major warranty company offers a lifetime or unlimited mileage warranty. No insurance company would ever back a lifetime warranty. They are just not available from any reputable company.

The general rule is if you are feeling pressured into buying, you are more than likely dealing with a questionable company. The reputable companies will spend the time to review your coverage options with you and never pressure you into purchasing or making an immediate decision. And the reputable companies don’t have any specials, discounts, giveaways or sales gimmicks.

Additional resources: Auto Warranty Scams, Top Rated Auto Warranty Companies