Decades ago, mail used to be something you look forward to, as it came with letters from your relatives or friends and was a nice way of staying in touch. Nowadays, one could say nothing good ever comes in the mail, and motor vehicle service notification is a good example.
Motor vehicle service notification has to do with the extended warranty policy that you bought along with the car. It’s a temporary policy and eventually, you’ll need to decide whether to extend it or forgo further payments and take responsibility for future repairs.
However, motor vehicle service notification can be a scam, in more ways than one. In this article, I’ll show you the common signs that you’re dealing with a scam from the time you were offered an extended warranty to the moment you opened the notification letter.
Vehicle service notice is a way for the manufacturer to notify you that your extended warranty is expiring and provide you with ample time to make a decision on how to proceed. It’s works the same way as an internet, cable, or mobile phone contract, albeit more complicated.
The letter itself may look legit and have all the right markings and stamps, and even a secure seal on it. When you open it, you’ll find that the notice contains information about your vehicle, some of which isn’t available publicly. There will always be a 1-800 phone number for you to call and arrange an extension of the service.
Here are a few tips on how to spot fake notification letters:
The sensitive information about the vehicle is what makes the scam look good, and what makes most people assume it’s legit. However, a lot of the information used can be acquired through a simple VIN check.
Go to your car and take a look at the bottom of your windshield on the driver’s side – there’s a small section where a series of numbers and letters is visible. This is your car’s VIN number and it can easily be copied by the scammer on a public parking lot.
The VIN number will tell you a lot about the vehicle, making it a great source of information when buying a used vehicle. Carfax is one of the most popular VIN checkers, and for a small fee, they’ll provide you with data on:
You can easily see how this information could be construed to make you believe that the letter is coming straight from the dealership or the manufacturer. The scammer has the information regarding your car’s make, model, engine type, and last reported odometer reading so they can easily fabricate a story where your car crossed too many miles for the warranty to cover, and the only course of action is to renew it.
Some scams are blatant theft, where they get you to transfer your money to them, only to never hear from them again. However, the majority of scams actually completely legal. They get you to sign up for an insurance policy but write the contract up in such a way that you can never claim it. The most popular is saying that your car has been abused, no matter what the issue is, which results in an automatic void of the warranty you’ve spent hundreds if not thousands of dollars on.
The most baffling part of the whole motor vehicle service notification is the fact that it still arrives in the physical form. When you buy a car, you’re asked to leave a lot of contact information, so that the dealership has a direct way of getting in touch. When you think about it, wouldn’t it be much easier for the dealership to send you an email or call you on your phone, rather than send a letter?
When you get one of these notification letters, find your original extended warranty contract and give it a quick look, then call the place you’ve gotten your warranty from, most likely the dealership. Tell them you’ve received the letter and see if they confirm that they’re the ones who sent it. Then you can discuss the terms of renewal if that’s something you want to do.
Personally, I would never call the number provided in the letter, even if it’s completely legit. If you still want to make the phone call, listen to the conversation in the following video to get an idea of what to expect.
Now that we’ve gone through the service notification, let’s discuss the extended car warranty itself. First, it’s not actually a warranty, but rather an insurance policy put in place to protect the customer from paying for expensive repairs and parts.
Extended insurance policies are offered by the manufacturer (OEM) or third parties.
With OEM policies, you can get powertrain or “bumper to bumper” insurance. Powertrain insurance covers the engine and transmission, while the bumper-to-bumper policy also includes interior electronics and other features. Third parties create a variety of packages that are generally cheaper than what the manufacturer offers, but the downside is that repairs and parts used are not guaranteed to be of OEM standard.
So the question is, do you need any of that? The answer depends on the age and type of car you’re purchasing.
Dealers will strongly push for you to get an extended warranty with the car, but if you’re buying a brand new car, it already comes with a 3 year/36.000 miles warranty. Effectively, you could postpone the purchase of the extended warranty by 2.5 to 3 years and still get full coverage.
The reason why dealers are so persistent in their attempts to sell you the extended warranty is that it makes them the most in commissions. Up to 50% of the sum you spend on the extended warranty goes directly into the dealer’s pocket, which means that the cost of the policy is double what it should be.
Think about your purchasing habits – are you going to keep the car for three, five, or ten years? You don’t need an extended warranty if you’re going to sell before it even takes effect. For some used cars, the cost of the warranty can be as much as the value of the car itself, making the warranty pointless.
While an extended warranty may give you peace of mind, it will become a good purchase only when it’s used to cover an expensive repair.
I’ve heard of an idea that makes a lot of sense when you think about it. If you’re buying a car from a brand known for its reliability, like Honda or Toyota, instead of purchasing the extended warranty, set that money aside. Should you have a breakdown, you’ll have the cash for repairs, but it is far more likely that by the time you sell the car, you’ll get to keep most of the savings.
The main reason to get an extended warranty is if you’re buying a car that’s got a habit of breaking down or has very expensive parts.
Mercedes-Benz and BMW can be very expensive to maintain, while British cars are well known for their tendencies to fall apart. With an extended car warranty, you might end up saving several times the initial investment.
High-performance cars, sports cars and regular models tuned to deliver maximum power generally have a much shorter lifespan, as you cannot get all that power without sacrificing something. Because of that, they’re also a prime candidate for an extended car warranty, preferably OEM to take advantage of the high-quality replacement parts.
Motor vehicle protection or motor legal protection isn’t an extended warranty, but rather an insurance add-on that protects you from paying for damages caused by an accident you were not responsible for. It can cover driver and passenger injury, loss of earnings, damage to personal possession, etc.
An extended car warranty can be canceled at any time, and you will get a prorated refund on the remaining part of the policy. A policy included in the vehicle loan does not decrease the monthly rate and instead leads to a shorter payment period. You should familiarize yourself with the contents of your vehicle service contract, and find out if there’s a cancellation fee.
Warranty companies combine your address and vehicle information with other publicly accessible data to create a detailed personal profile. Before contacting the company, do a quick google search and see if they’re a legit business.
The answer depends on the make, model of your car, its age, and dose of luck. If you’ve made a sensible purchase from a manufacturer with a history of making reliable cars, you do not necessarily need to spend money on a warranty.
Car warranties are a lucrative business thanks to the favorable position of the insurance provider. Not only that, but whoever sells you a warranty will get a sizeable commission, so it’s in their interest to be as persistent as possible.
When it comes to motor vehicle service notification, there’s no need to be hasty in responding. Instead, contact your dealership or the place you’ve bought the policy from, and confirm that it was them who sent the notice. Otherwise, you can ignore it, as it’s a marketing ploy that is legally not a scam.
Many drivers choose to buy the extended warranty as a way of being carefree and not thinking about the expenses that may incur. Because it’s up to the insurance company to decide whether your driving was the cause for damage, there’s a high risk that you may not get coverage despite paying for it. If you want to get an extended car warranty, make sure you’re purchasing it from a very reliable source.
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