Help me not get scammed

[emmagfunk03]

I'm new here and admittedly don't know very much about cars.

 

My husband and I purchased a used 2008 Subaru Outback about a year and a half ago (current mileage is about 120,000). When we got approved for the loan through a bank, they offered us a lower interest rate if we purchased an extended warranty. We sprung for a three year, top of the line warranty, set to cover absolutely everything with a $200 deductible.

 

Last week, we noticed the AC getting warm. Then, my husband was driving the car and it overheated. We put more oil into the car because it seemed a little low, and attributed the issue to a bad water pump. We waited until the car cooled back down and took it directly to the dealership.

 

Unfortunately, we need a new head gasket (which I'm reading is a somewhat normal thing for this model) and we have a leaky radiator. The warranty company is not wanting to pay, and claiming that we put something into the radiator to keep it from leaking because there is a "gooey" substance in there. Cost of all repairs without warranty? $1900.

 

I need to know what else could be causing a gooey substance, and what points I can bring up with the warranty company. I feel like I'm being scammed, and that it could be a multitude of things, and why would I put anything into the radiator when I'm paying good money to have my repairs covered?

 

The dealership advised me to call the warranty company and complain, which I am ready to do. I just want information to back me up, because I didn't do anything!

 

Thanks in advance for any replies.

[1 Lucky Texan]

it's possible the previous owner or the dealership put something in it. maybe a different shop or radiator shop could confirm there was enough contaminate to reduce coolant flow.

 

It may also be possible that the bad HG led to combustion products getting into the coolant, forming some kind of emulsion.

 

there can be certain issues with mixing dexcool with other coolants that might cause a 'goo' to form. I'm not certain on those conditions though.

 

generally, the burden of proof would be on them - particularly if you have plenty of documentation on the car's maintenance.

 

 

I don't know how hard you want to fight the warranty company on this, but I feel you should try. If they continue to balk, tell them you'd be willing to pay for parts if they will pay for the labor???

 

good luck.

[emmagfunk03]

I'm going to fight tooth and nail. It seems fishy to me that the bank would basically force me into getting a warranty, and then they won't pay for something the previous owner might've done. Who's paying who? If the warranty company is unwilling, I'm going to talk to the bank and the dealership I got the car from. Maybe they can do some convincing.  

 

As far as I know, the car wasn't inspected before I purchased the warranty. That seems like a mistake on their part, but not up to me. If I got the car with this issue, the warranty was void from the beginning, and if they're going to balk too much I want the money I paid for the warranty back and I'll just cancel the whole thing. 

 

It also took them a whole day after inspecting the car to come up with this excuse. Why not mention it at the dealership as soon as they saw it? 

 

Honestly, I know not all car places/companies are like this, but I feel like this is another case of "Ooh this is a woman in her 20s she probably knows nothing about this. Let's see if we can get her." I've unfortunately dealt with this attitude many times. 

 

Good idea about parts/labor. That may be a last ditch effort.

[1 Lucky Texan]

good idea about having the bank go to bat for you.

 

sometimes, you just look someone in the eye and say, "How would YOU feel if this were happening to YOU?" (or, your wife, daughter, mother as appropriate)

 

also, phrases like; "What am I supposed to say to my coworkers and family when they ask about how i was treated by...the bank, the warranty company, etc. and, "what kind of review am I supposed to post to Yelp or Angie's list about my treatment?" etc.

 

also, asking to speak to someone's supervisor can help - particularly if you get the feeling someone is just 'parroting' their training or may not have any authority to negotiate or waive some rule. Always be polite, but be persistent.

 

do not 'threaten' to sue. But, let them know when you are getting extremely frustrated, then, just politely say; "do you have a contact for your legal department? Please give it to me."

Edited July 20, 2015 by 1 Lucky Texan

[Fairtax4me]

Gooey substance is probably Subaru Coolant Conditioner, which Subaru REQUIRES to be added to the cooling system. (Because of the widespread head gasket issue) It is a form of stop leak, which creates a coating of crud inside the entire cooling system.

 

Other sources of gooey crud could be,

engine oil getting into the cooling system.

There is a transmission oil cooler built into the radiator, and if the cooler splits it can mix transmission fluid and coolant. This will usually leave a red-ish oily residue in the coolant.

 

 

 

Not to rub it in, but did you or have you actually saved any money yet by purchasing this warranty?

Have you had other repairs done that were covered by the warranty?

Did the warranty cost less than the difference in interest you would have paid by opting to not buy the warranty?

[emmagfunk03]

"Not to rub it in, but did you or have you actually saved any money yet by purchasing this warranty?
Have you had other repairs done that were covered by the warranty? 
Did the warranty cost less than the difference in interest you would have paid by opting to not buy the warranty?" 

 

It's been a while, but I believe we did the math at the time and it ended up basically leveling out. Either pay more in interest or less in interest and pay for warranty, and it was about the same. My husband and I have a hard time saving money at times, and I had just turned in a vehicle that had cost me $1000 every time it was taken in, so it seemed like a good idea. Of course now I'm not so sure.

 

They have paid for one repair so far (that's all that's been needed). Now, when I'm encountering an issue that I had in mind when purchasing the warranty (by "had in mind" I mean something expensive), they won't pay. Are all warranties just scams?

Edited July 20, 2015 by emmagfunk03

[1 Lucky Texan]

I have read that most extended warranties are calculated to bring in 50% profit. Not a 'scam' but, definitely not a bargain.

 

be sure to let all of us know the names of the players involved if things don't go well. Might help someone in the future to know who to avoid.

[Fairtax4me]

Not all of them, no. But warrany companies work just like insurance companies. If they can find a reason to deny paying, they will.

 

If they've paid out before, thats a good sign. And kudos to you for figuring out the price difference, because a lot of people don't, and they just get sucked in. This type of warranty of a money maker for the dealer and the bank, and most of the time it works out in the banks favor because the warranty costs more than the interest, and they can roll the price of the warranty into the loan. Then the dealer gets a kickback from the bank, and a little from the warranty company for selling it.

 

 

Can you provide reciepts showing that all service work and oil changes have been performed by a dealer or shop?

[ThosL]

If you want to play hard ball with their intransigence, you could contact the state AG filing a complaint with them.  Plus lemon laws are pretty tough for used car dealers to fight.  Go online and post an anonymous or a review in your name depending on whether they may retaliate.  If you are a member of Angie's list they probably field reviews there.  Lots of ways to fight back.  

[brus brother]

1. Did you buy the car from a Subaru dealer? How much was the policy? 
2. Are they really insuring a car sight unseen? Then that is their fault and not yours. There can be any number of hidden faults and that is exactly what you are insuring yourself against!

3. Find out who is underwriting the insurance policy.

4. Contact the local Attorney General's office. 

No way should you give even an inch on this one!

[ThosL]

A quick question;  it sounds like the water pump went bad, how did your husband deal with that?  Unfortunately it is tow truck city when water or oil pumps go bad, people who drive with them gone can easily blow the engine.  Obviously warranties are based on fulfilling the terms of the contract(s).

[emmagfunk03]

The water pump is actually fine. We thought that was the issue originally, but it's the radiator and head gasket.

 

Update:

 

I called the warranty company yesterday and spoke with two people, a representative and a supervisor. They were rude, unhelpful, and pretty sarcastic when answering my questions.

 

I mentioned not putting any contaminant in the radiator, and they told me to take it up with the dealer I bought the car from. They're denying the leaky radiator because they said it looks like it's been a long term issue. That coolant was layered on, and they had pictures of the radiator with coolant everywhere. I mentioned that we brought it in as soon as it overheated, but they claimed I had to have noticed leaking and other issues before that.

 

I thought that was interesting because we got a brand new white driveway in October that has not one spot on it. I've parked my car there every day. When I mentioned this, the supervisor said, "I can't tell you why you don't have spots on your driveway." I asked if people should've noticed it during oil changes, or if it should've been overheating. He said he couldn't say. I asked for the contact for their legal department and he didn't flinch and just gave me their address.

 

So I called the dealership and asked if any work had been done on my car before it was sold to me. They said no and transferred me to the used car manager. He was pretty pissed that the warranty company was implying the dealership sold me a faulty car. He asked for the dealership's name where my car currently is and said he was going to speak with the finance manager that sold me the warranty. I...started crying and thanked him for trying to help me. So I'm hoping today that I'll get a phone call and this has either been fixed with the warranty company or maybe the dealerships will work something out. I'll update you if I hear anything else.

[1 Lucky Texan]

fingers crossed

[Rooster2]

Your story is one more bad reason to buy an extended car warranty. I have heard far more bad stores then good stories regarding car warranty policies.

 

For what it is worth, I have had two cars that over heated from either head gasket trouble, or a leak in a hose, that has caused the radiator to leak. So, I believe your story that you were not seeing any leakage on your drive way or elsewhere.

 

Suggest you continue to be super persistent with your insurance claim. Be polite, firm, and not verbally abusive or threatening in talking further with them. Keep climbing higher and higher in management to pursue your claim if need be. Don't be afraid to contact the President of the insurance company. Get the dealer to put in writing that Subaru adds additive to the coolant that may be noticeable on the radiator cap. Send this info to the insurance company, if you need to be persistent.

 

Good luck. Keep us posted on your results.

[ThosL]

I'd get all the evidence together; plus when you don't have written records of pertinent information signed affidavits may suffice.

[ThosL]

It's too bad that the radiator issue was not addressed early on, as they aren't that expensive.  Plus I was at the junkyard yesterday and there were a number of Subarus with radiators and other parts ready to go, not a hard job to install as well.

[TheGoodShepherd]

I have read that most extended warranties are calculated to bring in 50% profit. Not a 'scam' but, definitely not a bargain.

 

be sure to let all of us know the names of the players involved if things don't go well. Might help someone in the future to know who to avoid.

 

From what I've read, it's more like 100%. It is often just pure profit for the dealer. The best extended warranties are backed by the manufacturer—not the dealer, not a third party.. This is a topic everyone must study BEFORE buying a car. I did not, myself, but only managed to catch an article about a car nut who intentionally bought an expensive extended warranty because he KNEW the vehicle he was buying would be problematic.

 

One Year With A Carmax Warranty And An Unreliable Used Car

 

So I knew that extended warranties were a thing, and would help when you buy a troublesome vehicle. Thankfully, when the finance manager tried to sell me one for my purchase, I had some inkling what it was, though I hadn't expected him to try to sell me one. I feel for those who don't have a clue as to what's going on and feel obligated to take whatever is being offered.

 

Again, everyone who is buying a car needs to research extended warranties before purchase.

 

Bear in mind, this is just my opinion, but I suspect the dealer's finance manager was selling the customer a bill of goods. The bank had no interest in your extended warranty. I doubt the customer talked to the bank's loan officer—the customer was relying on what the finance officer said the bank wanted. The interest rate on the loan is based on the loan size and credit rating of the borrower, not warranties. The warranty doesn't change the fact that the customer must repay the loan, so it's not of interest to the bank. In this situation, the customer should have walked off the dealer's lot. Fast.

 

Coincidentally, I was on my way to write a post on much the same thing when I stumbled across this. Glad to see I'm not the only one with questions about these extended warranties.

Edited August 3, 2015 by TheGoodShepherd