One of my vices, when I’m up late and my wife and kids have all gone to bed, is watching bad science fiction, or bad science programs on late night T.V.. Yes, I know I’m a tremendous geek, but thank you for the compliment anyway.
About a week or two ago I saw a commercial for U.S. Fidelis, an auto warranty program. I thought it was hokey, and scammy and didn’t think anything of it. But I must have seen it 5 times in the space of 2 hours last night. To be fair, it was a very long 2 hours, since I was watching something about the edge of the Universe narrated by Alec Baldwin who was apparently attempting to deliver his poorly written lines like William Shatner doing a parody of himself as Capt. Kirk! But I digress…
The U.S. Fidelis auto warranty program.
The commercial goes something like this:
“An alternator can be a $825 repair… throw in a new transmission and you’re out almost $2500…”
Then the words:
“Repair bill paid!”
Flash on to the screen, followed by:
“Customized warranties – you choose deductable “
It goes on to show some couple and a young woman who look about ready to slit their wrists (It’s never that bad people!) because of the outrageous repair bills. But if they got an auto warranty through U. S. Fidelis, they wouldn’t pay a dime. Sounds great. An auto safety net.
It got me wondering how many people think this auto warranty program is a good idea. Is U.S. Fidelis a scam, or just a bad deal?
It seems that there are few sites out there that question these companies and their ads. So, I went down the rabbit hole, and this is what I found…
According to the Better Business Bureau (BBB) website, U.S. Fidelis is really a company called “Dealer Services”, and they have 809 complaints against them over the past 3 years alone.
U.S. Fidelis obviously has some unhappy customers, but that doesn’t make them a scam. But what about the concept? Are extended auto warranties a good deal?
Playing the odds.
The basic idea behind any warranty is the same as insurance: it’s a gamble. It’s a mathematical function of the odds that you’ll need the service vs. what the service costs.
These companies offer extended warranties to make a profit. The cost of the warranty that you pay minus the cost of repairs they pay out, is profit for the company. Ask yourself, if that many transmissions go belly up on cars today, why would the warranty company charge you much less than the cost of replacing the transmission? They’d go out of business, unless the quality of cars today is such that most don’t need the kind of staggering repairs profiled in the commercial.
I’m pretty sure companies like these also limit their coverage to cars less than 10 years old, or they cover less on older cars to limit their loss.
A better deal.
It’s a shame, because the likelihood of a major repair is so low on newer cars that people would be better off setting up an emergency fund as their own “safety net”.
If people took the money they pay companies like U. S. Fidelis, or “Dealer Services”, for the warranty, and put it in a high yield savings account from ING, they would have the money when they needed a costly repair AND they’d earn interest while they didn’t need the money.
UPDATE:
NBC had a story on U. S. Fidelis earlier this week. I’ve posted a link to it at the post: MSNBC Thinks U.S. Fidelis Auto Warranty is a Scam! (Video).
so far so good with US FIDELIS. i have a 1997 dodge grand caravan with all wheel drive that had a bad transmission. in order to get the tranny replaced i had to provide 2 docs. showing that my motor oil had been changed on time per their specs. thay paid $1,200.00 and my deductable was $359.03. so far so good as i took delivery of my 1997 dodge all wheel drive caravan just in time for winter. TRANNY FIXED. MY ADVICE:read read read ALL THE FINE PRINT AND FALLOW IT TO THE (T)!!!!!!!!
I work for Potamkin Cadillac Chevrolet dealership in New York. I thought I would call US Fidelis just to get an idea how much coverage would cost. I have a 2007 Cadillac CTS. The gentleman offered me their platinum new car coverage for 3475 for 5/100k. I guess for the average joe, that would be a lot of money. And even for me, that’s alot of money since I can get my buddys in the service dept to do most of the work. However, compared to how expensive repairs “can” be, it might be worth it. Sadly, I am the guy that waltzes into the service dept looking for the customer that has a repair that might be too much money for him to pay up front. So yes, I try to entice him to buy a brand new car instead of paying for the repair. I mean, who wants to spend thousands of dollars on their car when they can just put that towards a down payment,right? Makes sense. Unfortunately, I also do see the many many customers that are pretty much in tears because they can’t afford the repairs or they end up leaving their car there to be junked. But we have families to feed also. Bottom line, I wouldn’t buy a warranty while I’m working here, but if you’re the person that really can’t afford a breakdown, it might be good to look into. My shop charges 125/hr for the labor. And trust me, the guys here aren’t shy trying to find more problems on the car than you came in with. As far as them paying claims? I am not sure about that. We do work with warranties all the time. Especially when it comes to Caddys, its a good idea. But I do know that it’s not US Fidelis that pays for the claims. It’s the underwritters. We gladly accept administrators such as Mercury,Royal,TierOne,Presidential,Amtrust, etc etc. I asked the kid I was talking to from Fidelis who my underwritter was and he did mention that mine was Royal. I was pretty happy with that, but I didn’t buy the warranty. I just don’t need to right now. Perhaps if I change fields I might. I wouldn’t say they are a scam. Plus I’m a Rusty Wallace fan. I would just recommend that they go through the coverage with you. It can be a little shady when it comes with older cars. Hope that helps someone.
joe i work at usfidelis we do work with royal tier one choice amtrust all of those are great companies i try to tell customers that repair shops dont care when you get paid or anything like that and i know people do cry when they see 1200 dollars hell id hug the dam service manager if they let me make 12 payments on a repair bill buy it just not work like that most dealers charge 100-150 a hr and depending on the yr make and model of your caddy i bet i could get you royal at 2500 like 150 down and 24 months of 97.92 a month you can call us directly at 1-800-724-8513 ext 8825 my name is john saparito been working there for over a yr we also have a 30 100% money back gaurantee
This is to #104 aka John
I’m not in any position to buy a warranty at this time. I work at the dealership and get most of my problems done at no charge or at very little cost. I’m not sure it’s very appropriate for you to come on here to solicate sales on here. If you’re here to defend your company and educate some, then please do. Otherwise, it doesn’t look very professional on your part to weasel sales on here. You have made some good arguments on some of the negative comments on here, and you seem to have a knack to educate some of the people on here that are in dire need to see both sides of the spectrum. From my personal opinion, I think it is good to hear both sides of the argument. We have had plenty of complaints ourselves however, most are dismissed since it’s most are based on emotions, not facts. I wouldn’t be suprised if you guys do have a lot of customers, you obviously can’t make all of them happy. If you think about it, there really are only a few websites that have bad press/comments on your company. To me, that’s enough to think you are legit, you probably do what you say you will, and people just need to read ALL the small print before going through a claim. But I tell you what John, if I ever leave my career, I might just give you a call and see what you have to say.
Sorry Joe,
You may be right about no such thing as extended factory warranties on American cars (Not sure as I won’t buy them) but you certainly can buy them for brands such as Honda.
Take a look for yourself:
http://www.hondafinancialservices.com/Planning/Honda.asp
Oh and like I said before, if you buy a good brand in the first place, you really don’t need an extended warranty. Toyota and Honda have never let me down and I have never needed an extended warranty.
I work at a repair shop when I have a customer come in with thier warranty it is the longest process. The look for every reason not to pay for a covered repair. The will leave you and the customer waiting for weeks. Its a scam as far as I am concerned.
Fletch, you’re correct to a certain degree. I don’t know how old you are but I’m in my 50′s. I’ve dealt with cars all my life, growing up around them since my father used to be a mechanic. Honestly, the older cars were so much better and dependable than these new “robots” so I call them. I see more new cars (Honda,Toyota,Cadillac,Chevrolet) in our service department more than some 10 year old clunker. The fact is, there is just more to fix on them now. If you have done any backup research you will actually see that Honda and Toyota are worse than what they used to be. They ABSOLUTELY used to be the best running cars out there, you could keep a Honda up to 20 yrs old with over 300k miles without ever having a wrench to it. But that was the problem. They were ultimately losing money because people kept those cars longer. Chevrolet or Ford, they would break down after only a few years, but then they’d go back to the dealer and buy a brand new one to replace it. Honda/Toyota saw that trend and guess what? They aren’t building them like they use to. My son “had” a 2008 Honda Civic SI Coupe. He went back to their service dept more times than I’ve seen my doctor. Luckily he was under his factory warranty, but he got sick of it and traded it in for a different car. Honestly, it doesn’t really matter what kind of car you have. You can even splurge and buy yourself an 80k dollar mercedes-benz. The point is that we’re in the future now. So much damn technology to keep up with and damn computers, I can’t even work on these cars myself anymore. However, I am glad that you haven’t seen an ounce of problem yet with any of your cars. Hope that luck never runs out on you.
Fletch, as far as that “extended factory warranty” goes. You need to read the print. When going to that link you will notice that it is called a Honda care VEHICLE SERVICE CONTRACT. It is not called a Honda extended factory warranty. They used to call it that but with the regulations we are now required to call them service contracts. The reason you ask? Because that’s just what it is. It is not a warranty that is provided from the manufacturer itself. Trust me, I know. You can ask your dealer if you’d like. Ask him if the manufacturer Honda is the actual provider for your contract. If he tells you a name of an underwriter, then it’s not from the factory. I’m sorry if your favorite dealer has lead you on. Like I said on a previous post, I’m just being honest since we are all kept anonymous here.
I considered the warranty with US Fidelis but researched comments about it on the internet first. Yours makes great sense and I wouldn’t have thought of it myself even though I am in a Financial Peace University Class. Thanks to your recommendation, I will put my money into an emergency fund instead. Thanks!
In order to remain in business, even the most corrupt companies make good on a few hand picked claims. It all boils down to one simple concept, honor. US Fidelis has no honor. This is the very reason that many US Marines have began to boycott US Fidelis. The Marine motto is “Semper Fidelis,” this means Always Faithful. US “Fidelis” is not faithful nor do they exhibit honor. In regards to a free tow, AAA is much cheaper. Most insurance companies offer emergency road service. Keep your oil changed and do what Penny suggested and start an emergency savings account. If you have been mistreated by this company call your state Attorney General. To my fellow Marines out there reading this, Semper Fi. Contact Headquarters Marine Corps and let them know that you object to the partial use of the Marine Corps motto, I did!
Joe,
I agree, to a point, that Toy and Honda may not be as good as in the past though I think most of this would apply to Toyota more than Honda. That is part of the reason as to why I said you are better off getting a unit made in Japan. My ’08 was made in Japan and about as basic as you can get- Not many features, but also not anything added just to make it fail like a timing belt (good old chain like the old days).
And yea , they may call it a service contract but you can still get it directly from Honda..that is a Honda web site I listed in the other post. “Honda’s exclusive factory-backed protection package is transferable” is even on the main page.
The bottom line is when you buy a new car you are taking a risk so I prefer to reduce my risk upfront by buying brands that have served me well in the past and continue to do so. I have never had an extended warranty and quite frankly have never needed one.
I recently began to see USFedelis commercials on TV and decided to give them a call.
The quoted me for a 8 year old car at $ 3,400. They wanted $ near 700.00 down and almost $ 300 a month. They wanted me to pay it off fast .
I asked a few questions and the agent wanted my credit card number He kept asking for it. I refused saying I needed time to think this over. Then I got all the disaster stories about my car. ( I think after reading ALL these reviews the DISASTER would have been signing on with them ).
I said that would be difficult and they magically reduced the price and payments 2 times. Then put a closer on the phone to pressure me more…
I ended up saying ” have a nice day ”
I see numerous Fidelis employees on here espeially the one who quoted hours in decimal times such as 7.5 hours. Thats definately not a what a customer would say in time frames but more likely a FeDelis employee who is used to computing labor hours.
Yes i would love to find a reputable honest warranty company. Is it possible ? I will continue my search.
@Mary,
$300 A MONTH for a warranty?!
That’s a car payment on a new car!
That’s ridiculous…
Felix, warranty companies are nothing like auto insurance companies. “On your side” is the truth, out of Nationwide’s own mouth. Best claims experience ever, and I was hit by their customer. I suppose you think the THOUSANDS of dollars paid out on claims grows on trees. I’m thinking $892.10 for a 6 month premium is fair compared to the $7,183.32 paid out on my claim at the hospital! I’m sorry where’s the profit??? Point is don’t compare auto warranty companies to auto insurance companies. Auto insurance protects your investments!!!
I agree with joe. this is a poor decision to invest any money into something so sketchy! And Amber…damn right…I had a horrid situation where someone with no insurance hit me and Nationwide took care of everything! I will never change. I learned that it isn’t always best to price shop..you need to value shop.
This company is a total scam. I paid my monthly payments for 7 months then my engine blew. I was honest when i purchased the policy that my car was used when i bought it and the milage was 115K, they denied my claim for too many miles and when I didnt except that they said oh well your denied for lack of maintence so i faxed them 3 copies of oil changes to prove i took care of my responsiblities and their last denial was for normal wear and tear…ummmm hello its only a 2002 and the estimated engine life span is 300k miles. needless to say they had to return all my money i had paid them…after 6 weeks with no car i still had to pay out of pocket!
DO NOT GET A POLICY WITH THESE PEOPLE!!!!!!!
Hi James,
Thanks for the article. I’m currently doing research on extended warranties as the warranty on my current car is about to expire and though I haven’t had a trasmission go out, I certainly have used the warranty extensively. Though I whole hartedly agree that a high yield savings plan is a much better idea, the extended warranty plan offered by the manufacturer seems quite reasonable. At $1700 for a 3yr/36,000 mile plan with zero % financing for 17 months, and with the exact same coverage as the original warranty, and no up front fees (some extended warranty companies require you to pay up front, then haggle later whether or not it’s covered) and work done at their (the dealership) service center (again, other companies require you use an exclusive list of providers) I found this to be competitive and convenient. I agree with another poster that with the sheer number of people covered by Fidelis (likely in the tens of thousands), 809 complaints over 3 yrs actually seems kinda low. However, I felt compelled to research alternative options. And the first poster who stated you as being jealous of a company making money seems to have missed the point completely.
Thanks,
Christopher
Follow up – apparently they’ve been busy…
40 state Attorneys General are currently investigating the company for misleading consumers.
The Today show goes on to point out that the company has 1100 complaints with the St. Louis Better Business Bureau.
Mary Johnson,
yea just go out and buy yourself a new car i encourage it so that you can invest 20k into a new car and 8 yrs later its worth nearly 4k. i may not be a investment nerd but if you said i have a investment plan to invest 20k then 5 yrs later its worth 5k o would say your out of your mind. so lets look at the payments 300 a month for 60 months that’s 18k…most are at at lest 10% interest so that 1800 dollars in interest you pay so the total is 19200. you drive the car off the lot you lost 2500 dollars.
the manufacture give you a 3/36 so after 3 years you will be out of warranty. so magically most cars break down when there outside the warranty. so here we are 3 yrs later still doing the same thing looking for coverage. except you have to look that your already paying 300 dollars towards that car payment. so you will search and search for cheep coverage and maybe you give up because you think warranty’s are a scam so 4 yrs later your car breaks down and the car is worth 3k and the tranny costs 2200 you say its time for a new car you trade it in and buy a new one…..see there is a common pattern the dealer has you right by the collar so go ahead think 300 dollars for 12 months with no interest is to high and don’t get coverage wait on it your car is running GREAT so when it does break down ill walk up to you and say I TOLD YOU SO and walk away laughing
1100 complaints i believe like 3 are unresolved
3/300,000 customers .00001 of are customers are unhappy
1100/300,000 X 100 is .36666 so that’s a 99.6 approval rating. hm if i was a business owner id say im pretty happy with that.
This John saparito kid makes sense. They have 1100 complaints cuz they talk to over 10,000 people everyday. That’s not bad at all. I will be calling us fidelis tomorrow to see what they can offer me on my 2001 accord
You all have way too much time on your hands…
Just out of curiosity, how is a refund 100% money back if they clearly state in the fine print that there is a 75$ cancellation fee. Last time I checked, 100% of the money I would have paid us fidels minus 75$ is not 100% money back, but here we go gettin all technical about the fine print, math, and what the definition of 100% is
it varies from contract to contract from the amount of coverage on the engine and transmission. exactly what are we leaving out?
Transmission/Automatic or Standard: The internal components of the automatic transmission or manual transmission. Drive chain, drive chain gears, carrier bearings, and internal trans-axle seal. The manual transmission case and automatic transmission case and torque converter are covered, if damaged by the failure of internally lubricated parts. Flywheel/ flex plate, vacuum modulator, electronic shift control unit, transmission cooler, transmission mounts, oil pan, seals and gaskets, shift linkage and shift bushing.
it does vary from contract to contract. this is why we give all our customers a 100% money back guarantee. its state law that customers get to review the terms and conditions, before they make a final decision. after 30 days you get a pro-rated refund minus a canx fee.
The “terms and conditions” of any insurance policy determines what will and will not be paid. As for automobile extended warranties, one should make sure that claims will be paid for ‘Seals and Gaskets’ and ‘wear and tear’. Another important item is their definition of ‘failure’.
Most warranty companies can turn down almost any claim for wear and tear if your policy does not cover those.
if you do your finanacing thru a credit union, they sometimes sell a warranty product and then you have them to go back to if you do have a problem. When you buy yourself thru an independant company you have no one when the answer is NO
Hmmm, when thinking about manual transmissions John the clutch isint’ covered, the pressure plate isint’ covered and the clutch assembly isit required, roughly 1300 worth of parts and labor, I know cause I just had it replaced. Also, like I said earlier a 100% refund is considered 100% of the money I’ve paid you not 100% of the money Ive paid you less a cancellation fee….there we go with the ‘precision in English’
also you negleceted to address why you were so rude to some of the previous posters. I especially love how you only address the non covered items and leave everything else out in your reply.
Bottom line is this people, call us fidels and see how much they are going to charge you for a warranty. Take what they give you as a down payment and open a savings account with it, then each month take the money you would be giving them and put it in your savings accout. This way you have a stable emergency fund and you can make decisions about what will and will not be covered by your emergency fund
To clarify my previous post it is supposed to read ‘and the clutch assembly isint’ covered’
Stupid iPhone auto correct
For those of you who think its a scam check this out… I purchased a plan with not deductible and once my grace period was up I took in my 2004 F-150 with over 75,000 miles in for service. The warranty I puchased paid for two new lower ball joints, a new A/C control unit, and all the labor. Not one cent came out of my pocket. This all totaled over $1,000 which is about half the cost of my plan. Well worth it!
Just spoke with a customer service rep from US Fid of course He probably just told me what i wanted to hear. Was confirmed that they are no longer sale warranty contracts at this but customer service is still avail. Assured me that my vehicle was still covered they only sold me a contract the actual company that my contract is Teir one and i have contacted this company and my vehicle is stilled covered. And far as payouts I do have complaints but I guess minor overall. I had to use my warranty twice. One for a/c needed a compressor only paid 500.00 and the repair company(Firestone) charged me a total of about 800.00 caharging for removing and rplacing a part of the a/c that had to come off to replace compressor and for replacing coolant you would think that inc in a/c service but thats an issue with firestone not us fid they paid with no problem. Second I needed a transmission Only requirement proof of maintainance. They shipped in a transmission taking three-four days paid for labor refuse to pay for rental car stating hours of labor did not qualify and the fact that they had to ship in the transmission did not qualify. Transmission repair would have cost me apx 2300 runs great so I say I got mines. By da way I have 2002 with over 190,000 miles
Even Rusty has seen the hand writing on the wall and burned his tires leaving the place. Check out his comment towards the bottom:
http://www.stltoday.com/blogzone/the-savvy-consumer-blog/uncategorized/2009/12/nascar-team-says-us-fidelis-wont-be-a-sponsor-next-year/
I purchased a warranty, put 180.00 down and it started that day. I paid on it for 8 months, 92.46 per month, thru Mepco finance. I had an issue with my 2007 Jeep Liberty, took it to Aamco, which requires NO deductable if taken there or pep boys or firestone, and they paid the repair bill of 1,049.00 with NO hassle. Last month I took to a jeep dealer and got my blower motor fixed, cost them 329.00 with labor, they paid it and all I paid was a 100.00 deduc, since it was not a preferred place. They been awesome to me and I am keeping it. Bill in Pittsburgh.
U.S Fidelis is a complete scam. I had this insurance for almost a year and a half and I never used it. Recently, I needed about 900 dollars worth of work done and they denied my claim. Obviously I was upset and decided to cancel the service. Since I was on a monthly plan, I would not recieve any refunds because under the provisions section it states that the contract must be paid in full before any money that i have paid out will be issued. So all the money that i had paid was a lost cause. They also make you wait 30 days or 1000 miles after purchasing the warranty before you can fill any claims so it is not a quick alternative to an immediate repair. In addition, if you happen to have many repairs that are back to back they have the right to send out an inspector who can deny your claim for any reason. Wow, what a rip off. So if anyone has any questions about what they cover please feel free to post here and i will gladly let you know what they say. I dont want others to fall into the same trap that I did.
Complete waste of my money. The water pump went out and I had to show ORIGINAL receipts for all my old changes for 2 years. The garage that I go to, to have the water pump and oil changed offered to send them copies of all my oil changes and they said it wouldn’t work. They actually expected me to have copies of all those ORIGINAL receipts with me in my wallet so that I can fax them over. Keep in mind I dropped the car off earlier in the day and I’m at work. I only had 2 payments left and I canceled it. They actually said to me, “you only have 2 payments left, are you sure you want to cancel?” My response, “Why in the hell would I pay you $90 a month for 2 more months? You won’t even cover a !@# windshield wiper.” GOD I’M SO MAD AT MYSELF FOR FALLING FOR THIS SCAM!!!!! They spend 30 minutes on the phone with you talking about all the wonderful things they cover, you’d think they could spend 2 seconds telling you to please make sure you keep all the ORIGINAL receipts in case something breaks.
SCAM, SCAM, SCAM!!!
Peter
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