The BBB warns against shady auto warranties

The BBB warns against shady auto warrantiesThe Better Business Bureau (BBB) recently reported an auto warranty scam that warns car buyers to think carefully before making an investment on a vehicle service contract, the Daily Progress reported.

The brothers who owned US Fidelis, which was once one of the nation's top auto service contract marketers, were charged for 27 counts of stealing, unlawful merchandising practices and insurance fraud. They committed these crimes under the name "Dealer Services," according to the news source.

The BBB recommends that prospective buyers forego an extended warranty if it costs more than the value of the vehicle. Instead, they should put the funds in an emergency savings account for repairs down the road. Although warranties can be pricey, the overall cost of a vehicle can be much more affordable if buyers finance their purchase with a car loan.

Also, consumers should keep in mind the difference between a warranty by the car's manufacturer and that of a third party. While the manufacturer's warranty guarantees factory-trained technicians who use new parts, the third party could be less than reputable. Consumers can check the history of these companies on their BBB Business reviews.