chapter – 9 page – 15
Figure 9.1. Buyer’s Guide Warranty Page
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What are your responsibilities? Under the contract, you may have to follow all of the manufacturer’s recommendations for routine maintenance, such as oil and spark plug changes. Failure to do so may void the contract. Keep detailed records, including receipts. “As Is” Sale Sometimes a motor vehicle, most commonly a used vehicle, is sold “as is” or “with all faults.” Such vehicles usually do not come with any warranties at all, either expresses or implied. Continue reading Chapter 9: Warranty and the Broken Promise (Page-14)              
Service Contract Questions and Answers Does the service contract duplicate any warranty coverage? Yes, but more often than not it provides less coverage than the manufacturer’s warranty. Who backs the service contract? Continue reading Chapter 9: Warranty and the Broken Promise (Page-13) 
Even where a complete teardown does occur, many times the inspection report will automatically blame the consumer for abuse, with little basis for that conclusion. After all, the defect is not covered, and it will save the service contract company thousands of dollars in repairs. If a consumer is not armed with an automotive expert to dispute this false finding, he or she will be at the mercy of unethical people. Should I Buy a Service Contract? The price of a service contract is typically based on several factors: the make and model of the vehicle; whether the vehicle is new or used; and the desired coverage and length of the service contract. The cost can range from several hundred dollars to over a thousand dollars or even more. Continue reading Chapter 9: Warranty and the Broken Promise (Page-12) 
Many lemon laws distinguish between warranties and service contracts, and they may not give consumers with service contracts the same rights as consumers with warranties. After a reasonable number of failed attempts to repair a vehicle under warranty, you should have the right to a refund or replacement. However, you could theoretically have over one hundred failed attempts to repair the same major defect under a service contract, yet still have no right to a refund or replacement. Most Common Problem In my experience, the most frequent problem that consumers come across when trying to get someone else to pay for repairs under a service contract is a dispute over whether the defect is covered. Continue reading Chapter 9: Warranty and the Broken Promise (Page-11) 
Many service contract administrators authorize the use of reconditioned or like new parts instead of actual new parts, even for major repairs. Some consumers are disappointed when they find out that the shop is replacing their defective engine with a reconditioned engine instead of an engine from the factory. On the other hand, many service contracts offer rental car coverage when the vehicle is in for repairs. As you can see, the terms of any particular service contract can vary dramatically. If you have any questions about a service contract’s coverage, make sure to ask them before you agree to buy anything. The consumer is usually required to follow all of the manufacturer’s recommendations for routine main-tenance, such as oil and spark plug changes. Failure to do so may void the service contract. Keep detailed records, including receipts. Continue reading Chapter 9: Warranty and the Broken Promise (Page-10) 
Once a manufacturer’s original warranty expires, the average consumer will usually go to an independent shop for repairs and service, because prices are so much higher at an authorized dealership. Captive service contracts keep consumers coming back to authorized dealerships, even after the original warranty expires. Dealers have considerable incentive to convince consumers to buy these service contracts with their vehicles. Service Contract Coverage A service contract generally covers only things not covered under the original written warranty. It may be available at the same time written warranty coverage is in effect, but more often it comes into effect only after the original warranty expires. Most service contracts have language that specifically excludes anything still covered under the original warranty. Continue reading Chapter 9: Warranty and the Broken Promise (Page-09) 
There Are Several Types of Service Contracts • The selling dealer can sell its own service contract, under which that dealer is obligated to perform any covered repairs at its own expense. The key differences are who performs the repairs and who pays for the repairs. When your car needs to be repaired or serviced, you may be able to choose among several facilities, or you may be required to return the vehicle to your selling dealer. Continue reading Chapter 9: Warranty and the Broken Promise (Page-08) 
As its name suggests, the implied warranty of fitness for a particular purpose is a promise that the product the seller recommended will, in fact, do what the buyer wanted it to do. The buyer relies on the salesperson’s superior knowledge and skill to select a suitable product. Thus, the implied warranty guarantees that the product will be fit for that particular purpose. While it’s all right to rely on the salesperson’s knowledge, it would be wise to remember that the seller wants to sell, which sometimes overrides the consumer’s needs. Continue reading Chapter 9: Warranty and the Broken Promise (Page-07) 
There is no sales contract between the consumer and the manufacturer; however, some states consider the manufacturer’s written warranty to the consumer to satisfy the contractual-relationship requirement. Other states, like California, have simply abolished the privity requirement outright. In those states that still require privity of contract-and look only for a sales contract, not written warranty-consumers have reduced rights against manufacturers. Implied Warranty of Fitness for a Particular Purpose Continue reading Chapter 9: Warranty and the Broken Promise (Page-06) |
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