Hello Ray,

First, let me thank you for your "pro bono" service to us, the car-buying/owning public. Second, count me as yet another thoroughly befuddled member of that public.

At the moment I'm trying to decide whether ANY extended "warranty"/service contract is worth the paper it's printed on. I've been reading with great interest your commentary both here and on the website ("Christopher Price.net") that led me here, in which you repeatedly warn would-be buyers to stay away from third-party providers. According to you, we should only buy "direct from the manufacturer".

OK, sounds like good advice. But here's my situation -- I own a 2009 VW Jetta TDI, which I love driving and would like to keep driving as long as I (and it) can. Volkswagen, via its dealers, offers drivers an extended service contract (called the "Drive Easy Program") that has the VW logo emblazoned on top. But reading the fine print at the bottom, one discovers that the contract is "administered" by "Fidelity Warranty Services, Inc.", located in Deerfield Beach, Florida. Now to me, that sounds like a 3rd Party! And if you Google that company's name, you can find the same kind of horror stories from outraged and frustrated consumers as you'll find regarding Warranty Direct and other after-marketers. (I know you say that Warranty Direct is the best of a bad lot, but still...)

So my first question is, given these facts, do you think I'd be any better off going with VW's own "company plan" than I would be with some other? And second, is VW unique in outsourcing the "extended warranty" it offers its customers, or has this become the norm in the auto business?

I'd greatly appreciate your thoughts....

Hi there,

I believe you are always better to go with the manufacturers extended service contract. Based on your specific situation, if the extended service contract is offered through the VW Dealership and has the VW logo printed on the broucher, then it's a safe bet. Ultimately, worst case scenerio, if the "warranty" company goes out of business the VW selling dealer would be held accountable since they sold you the warranty.

To answer your second question, yes, most manufacturers are going this route and outsourcing the management of their extended warranty programs.

Safe motoring.
Mick

"if the "warranty" company goes out of business the VW selling dealer would be held accountable since they sold you the warranty."

Thank you, Mick, for your prompt and enlightening reply. I didn't realize the dealer would be obligated to honor the warranty if the warranty provider
folded. Is that provision normally written into the contract, or is it stipulated by federal law?

Paul,,, excellent follow up Q,,, after all my years in the business I also did not realize the dealer would be obligated to honor the warranty

It will be interesting to see if Mick can back up his statement by answering your Q,,, or if he is just another fly by night whom choose not to answer.