PSI: Is a warranty a guarantee?

PSI: Is a Warranty a Guarantee?

CHARLOTTE, NC (WBTV) - It's a question we all get asked, whether you're buying a DVD player, a home, or a car. "Do you want the extended warranty?" Saying yes offers immediate peace of mind, but for Kim Houston of Charlotte it lead to headaches.

"I had a little boy next door say, 'how many cars do you have?'," said Houston.

She has a Saturn Vue. She just hasn't seen it very often lately. Her driveway instead has been home to one car rental after another. It all started in December.

"The car just went out (on I-485) and I ended up hitting a sign on my way back home," said Houston.

Houston says it was a white-knuckle moment. Thankfully she wasn't hurt and it appeared she wouldn't be out much money. It's because when she bought her SUV she spent an extra thousand dollars to purchase a 3-year, 36-thousand mile protection from Continental Warranty.

Houston thought for sure she was covered.

"We like to say the large print giveth, the small print taketh away," said Tom Bartholomy of the Better Business Bureau.

Bartholomy says the BBB gets lots of complaints about warranty companies. He says the disputes are almost always over payment of claims.

"Time after time the very first response from most warranty companies is no," said Bartholomy. "No, it's not covered because of this, it's not covered because of that."

Continental told Houston it wasn't going to replace her blown engine because the engine had no oil in it.  She had saved her oil change records and said she was going to file a complaint with the Better Business Bureau. It's when she heard from another rep at Continental.

"He said he would fix the engine as a courtesy even though there was no oil in the car," said Houston. "They were doing me a favor."

What Continental wasn't doing, was paying the entire repair bill, or for all the car rentals. Her SUV had been in shop for 2 months.  She got the vehicle back in late February, but by mid-May, there were more problems. The replaced engine was going south.

"Lord this is going to be another struggle," said Houston.

This time her vehicle ended up at Mecklenburg Auto Fleet in west Charlotte. Jeff York was the mechanic working on it. He says he doesn't like to work with warranty companies. He says too often the shop doesn't get paid for all the time it puts in. He says they often have to haggle over every last nickel.

"It shouldn't be a game you know," said York. "This is what it costs to replace the engine. Send me an engine that is worth putting in the car, we'll do the job."

York says he isn't getting full price this time either. Neither is Houston. More car rentals and tows have her out more than $1600 because the car hasn't been running three out of the last seven months.

WBTV contacted Continental Warranty and spoke to John Volpe. He told us Houston's first engine lost its oil, but he said they agreed to fix it anyway.

"We do good will for our customers," said Volpe. "Our name means a lot to us. We always want to step up and help a customer out."

He then said there was a difference between a warranty and a service contract. He said Houston had the latter.

"A warranty is what you get with something new," said Volpe. "A vehicle service contract is an agreement between you and another party."

We asked why company name is Continental Warranty? Volpe said he didn't work for the company when it was founded.

"It was from marketing way back," said Volpe. "I haven't been with the company since the beginning, I didn't start the company."

As for the $1600 Houston said she's owed, Volpe promised to take care of it.

"If she supplies me with the proper receipts we will take care of it for her," said Volpe.

Meanwhile, back at the shop, the work on Houston's SUV was done. The bill paid by Continental Warranty with an extra hour of labor tacked on for Mecklenburg Auto Fleet.

The BBB says before buying a warranty read the fine print, not just the brochure touting the warranty. Bartholomy says people need to read the actual contract. He also cautions about signing right there on the spot of purchase. He says you should ask to take the contract home and read it carefully, especially the exclusions section, which spells out what is not covered.

Information not lost on Kim Houston.

"I actually would still do a warranty, said Houston. "But it would be much more thorough of my investigation before I bought one."

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