The used vehicle buyer or the owner of a vehicle out of factory warranty is being bombarded with advertising, mailings, telephone solicitations and dealer pressure to buy an auto repair contract.

Be aware of the following:

1. The majority of contracts have an arbitration clause that denies you the right to the court system if the company doesn’t fulfill its promises.
2. Arbitration is an expensive process and could cost thousands of dollars.
3. Auto repair contracts that are financed with your purchase of a new car carry commissions to the used car lot of up to 50%. What is really going to be left to pay for repairs?
4. When your vehicle breaks down, the dealer will tell you that you have to deal with the warranty company as he has no control. He is not your local agent.
5. You will be dealing with a company on the phone or email - that’s not good.
6. The vast majority of auto repair/warranty contracts fo not provide for a rental vehicle. You can be negotiating with the company for weeks.

Beware, read and re-read the contract carefully - don’t rely upon what they tell you.

Remember, if you agree to arbitration you have limited your legal recourse and tied the hands of your attorney to any contract.