Guides
Auto warranty robocalls vs real insurance
Why "your car's warranty is expiring" calls are almost always illegal, how a service contract differs from a warranty and insurance, and how to report them.
A recorded call warning that "your vehicle's warranty is about to expire" is almost certainly illegal and very likely a scam. The Federal Trade Commission says a robocall trying to sell you something is illegal unless you gave that company written permission to call you that way. The FTC names extended car warranties among the robocalls people report most. Whatever the caller is selling, it is not car insurance, and buying it does not replace any part of your policy.
Three different products that get confused
Scammers rely on people mixing these up.
| Manufacturer's warranty | Vehicle service contract ("extended warranty") | Car insurance | |
|---|---|---|---|
| What it is | The automaker's promise to fix defects for a set time or mileage | An optional contract, sold separately, to pay for certain repairs | A policy regulated by your state that pays for crashes, theft, liability and other covered losses |
| Comes with | The new car (or a certified used car) | Nothing; you buy it from a dealer or independent company | Nothing; required by law in nearly every state |
| Pays for | Defects in materials or workmanship | Listed mechanical breakdowns, subject to exclusions, deductibles and claims rules | Crash damage (collision coverage), theft and weather (comprehensive coverage), injuries and damage you cause to others |
| Does not pay for | Crashes, wear items | Crashes, theft, liability | Mechanical breakdown and wear and tear |
The FTC's guide to warranties and service contracts draws the first distinction. A warranty is included in the price of the car. A service contract costs extra and is sold separately. Car insurance is a third thing entirely, and it does not pay for a failed transmission or worn brakes; see what car insurance does not cover. A few insurers sell mechanical breakdown coverage as an endorsement, but that comes from your insurer, on your policy, not from a stranger who called you.
How the robocall scam works
The FTC describes the pattern. Calls, texts or mailers claim to be from your dealer or the manufacturer and warn that coverage is about to lapse. When you engage, you are pushed to:
- give personal and financial information, such as your card number, bank account, Social Security number or VIN;
- pay a deposit before you have seen the contract terms;
- decide on the spot.
Even when a real contract is sold, the FTC warns that the company may be out of business when you file a claim. The contract may also have so many limits that it is close to worthless. Caller ID does not help: the FTC notes that scammers can fake the name and number you see. Robocalls are cheap to make over the internet from anywhere in the world.
Why your car? Vehicle details are not hard to guess or buy. A caller who knows your make and model may only be reading from a marketing list, and that does not make the call legitimate.
What to do when the call comes
- Hang up. The FTC's advice is blunt: if you hear a recorded sales pitch, hang up. Pressing a number to "speak to someone" or "be removed from the list" will probably just lead to more calls.
- Don't confirm anything. Not your name, your car, your address, or a "yes."
- Check your actual coverage yourself. Your owner's manual or the dealer that sold you the car can tell you when the factory warranty ends. Your declarations page shows your insurance coverages; see how to read your car insurance declarations page.
- Block the number and turn on your carrier's call-blocking or call-labeling tools.
- Report it (details below).
If you already paid, call your card issuer or bank right away and ask to dispute the charge. If you gave out your Social Security number or bank details, treat it as possible identity theft.
If you actually want a service contract
A service contract can make sense for some drivers, such as owners of cars with expensive known failure points. If you are shopping for one, do it on your own initiative and follow the FTC's checklist:
- Compare it with the factory warranty so you are not paying twice for the same coverage.
- Find out who actually backs the contract and pays claims, and look up complaints about that company.
- Read what is excluded, the deductible per visit, whether labor is covered, and where repairs can be done.
- Ask how claims are approved, and whether you pay the shop first and wait for reimbursement.
- Never pay before you have the full written contract.
Some states regulate service contract companies through the state insurance department, while others rely on the attorney general. Either office can tell you whether a seller is registered and whether complaints are on file.
Where to report
- Illegal robocalls: report them to the FTC at DoNotCall.gov. The FTC asks for the number that received the call, the caller ID number, any callback number you were given, and the date and time.
- A service contract that was a scam or won't pay: the FTC at ReportFraud.ftc.gov, and your state attorney general.
- Calls claiming to be from your insurance company: your insurer, using the number on your ID card or its website, and see car insurance phishing, text and call scams.
For other fraud involving insurance itself, such as fake policies or staged crashes, see how to report insurance fraud.
Key takeaways
- A robocall selling an extended warranty is illegal unless you gave that company written permission to call you that way, and it is likely a scam.
- A service contract is not a warranty and not car insurance. It cannot replace the coverage your state requires.
- Hang up, don't press any numbers, and confirm your warranty or coverage through your dealer, manual or insurer yourself.
- If you paid, dispute the charge with your card issuer immediately.
- Report robocalls at DoNotCall.gov and scams at ReportFraud.ftc.gov.