CarShield Review and Alternatives: Why the TV Based Warranty Company Is a Bad Option
CarShield is one of the biggest names in extended warranty companies. They are a celebrity endorsed third-party vehicle service contract provider that offers coverage for vehicles in and out of their original manufacturer’s warranty. Since 2005, the company has been selling extended car warranties to customers across the United States (all states except for California). With reports of warranty claims never being paid out and lawsuits and settlements related to scams, we have put together our review of CarShield. Continue reading to learn more about their business model and find answers to the following FAQs:
Is CarShield trustworthy?
How much is CarShield and is it worth the expense?
What do reviews say about CarShield?
Are there alternatives to CarShield?
With over one million vehicles covered, CarShield is the most popular extended car warranty provider in the industry. Over the years the company’s administrator (American Auto Shield) has paid out more than one billion dollars in claims to its customers. There are six protection plans to pick from, each offering different protection options at variable prices based on a free quote:
Diamond (Best Coverage): Most similar to a manufacturer’s new car warranty
Platinum (Comprehensive): Comprehensive coverage for high mileage vehicles. Protects the engine, transmission, AC, electrical system, starter, water and fuel pump, and more.
Gold (PowerTrain Plus): Covers major and minor parts such as the engine, transmission, water pump, alternator, starter AC and power windows.
Silver (PowerTrain): CarShield’s most affordable policy that covers all lubricated parts, the engine, transmission and water pump.
Aluminum (Specialty Coverage): Covers most electrical and computer related problems
Motorcycle & ATV (Other Coverage): These contracts vary across motorcycles and other special circumstances.
Note: All CarShield plans include roadside assistance, free towing, and rental car reimbursement.
On paper these contracts are appealing and give the impression that they will save you thousands of dollars in auto repairs, but continue reading as we uncover some downfalls to CarShield.
Can I Trust CarShield?
CarShield specializes in providing coverage that adds more value, coverage, and services than a traditional manufacturer warranty. Under the right conditions, you may be able to save on unexpected automotive repair costs that you would otherwise have to pay out of pocket or rely on a factory warranty alone.
When it comes to CarShield honoring the coverage contracts and paying for car repairs, we have found that many claims are denied. Customers blame false advertising, lack of disclosure and loopholes in the contract language to prevent payment of claims. It’s worth noting that the contract does state that the extended warranty kicks in only if there is mechanical failure. It’s difficult to know exactly what is defined as mechanical failure because circumstances vary from customer to customer. Ultimately, CarShield's adjuster has the final say in what issues they deem qualified under their warranty. Since the language is vague, it’s imperative that you read through the contract to ensure it meets your needs before agreeing to the terms, or make adjustments/terminate within the cancellation window of 30 days.
CarShield Fees & Expenses
The pricing of your CarShield contract depends on the protection plan itself, your vehicle, its age and condition, and other factors that are considered. On average, you can expect to pay at least $99 a month for coverage. Many customers discovered they had to put down an initial deposit, and on top of that pay a monthly fee as well as a deductible should they ever need to file a claim.
Example: One customer was offered 18 months of coverage for $379 deposit + $170/month + $100 deductible
As you can see, you can easily end up paying more than $3,500 for a year and a half of coverage. Someone with a newer vehicle may not find paying that price tag necessary. On the other hand, used cars, vehicles that are older or have high mileage may need extensive repairs and could benefit from the extended warranty.
A general rule of thumb with extended warranties is the value of the warranty can offset the cost under certain circumstances:
Your vehicle is old and requires service on drivetrain parts
You want coverage and services the manufacturer warranty doesn’t offer
Ultimately, it will come down to whether or not you feel the extended warranty is beneficial. Having that extra peace of mind in itself may be worth paying the price.
The Good and the Bad
CarShield’s protection plans easily cover more than their manufacturer counterparts. The extensive warranty options make it easy to compare differences and similarities to prioritize what coverages are most important. That being said, the plethora of options can also make it difficult to know what you may need or want. CarShield does have an extensive customer service network to provide additional information and help decide which plan suits their customer's needs best. Speaking to a representative may help avoid possible information overload if you aren’t familiar with the particulars of extended warranties.
A big disadvantage to CarShield is the lack of an online quote platform. Currently, there is an online form where you fill out personal and vehicle information in order for a representative to contact you through text, email or phone. We are living in a time where consumers want instant information, and not having the ability to receive an instant price quote is a major drawback. You may also need specific information regarding vehicle exclusions that may disqualify your vehicle from particular coverages. Again, not having this information readily available makes the process time consuming for the customer and is another downfall to using CarShield.
CarShield Reviews: Best and Worst
While screening service reviews of CarShield, we found there were some positive reviews, but very heavily weighted with negative reviews. CarShield claims to be one of the most affordable choices for coverage -- so why is it that there are so many negative reviews?
The Better Business Bureau (BBB) rates CarShield a 1.46 out of a 5 star rating. The warranty service has a BBB rating of ‘F’, the lowest possible rating. The reasons provided by BBB for the ‘F’ rating are:
Advertising issues found by BBB
1,348 complaints filed against the business
Business has failed to resolve underlying causes of a pattern of complaints
Over the past three years, there have been 1,340 customer complaints reported. Considering CarShield has sold over 500,000 plans in those three years, the customer complaint ratio is approximately 0.1% of all customers. Many negative reviews focused on unwanted sales correspondence (by mail, phone and email) and uncovered repairs.
One customer stated:
“Scam as the word is known…no. But when it comes time to pay for your repair..90% of the time they will come up with creative reasons to deny your claim. They will even hire someone to go to the repair shop and inspect the parts and tell you…lack of maintenance on your part…voids payment”
Note: Vehicles must be inspected by an ASE-Certified repair facility to be eligible for any type of repair coverage.
We can be a bit more forgiving of the complaints about sales advertising, but CarShield is in the business of servicing vehicles not covered under or out of a manufacturer’s warranty. Not providing the primary service their customers are paying for is simply unacceptable.
For customers who have been able to get their claims paid out, for good reason, do speak highly of CarShield. These reviews are generally positive and compliment the company’s great customer service.
Another CarShield customer left this review on BBB:
“No, CarShield is not a scam, I have this service. They have paid for thousands of dollars of problems with my car. However, they have to have an inspector, inspect your car before they will authorize work. If you bring your car in on a Thursday or Friday. They will not have an inspector come out until next week. They will not pay for a rental car for you during the weekend! They will pay for a rental car during the week only. So, if the car will still run, I suggest bringing the car in on a Monday, but calling CarShield as early as possible! One more thing, you can negotiate their price, so don’t accept their first offer!”
Before signing a contract, speak with a sales person to ensure CarShield provides the coverage your vehicle requires. Be thorough and consider all other coverage options available. If you cannot find what you’re looking for on the website, you can contact a service representative by phone or email.
Alternatives to CarShield
CarShield is not the only third-party extended warranty provider in the industry. Other companies include Endurance (WithClutch’s Endurance review), Carchex, and Protect My Car. Our recommendation remains the same for these providers. Conduct extensive research and shop around before committing to a coverage plan.
If you're deciding whether or not to purchase an extended auto warranty from CarShield, be sure to do your due diligence and consider other extended warranty vehicle service providers. Request price quotes from multiple sources and compare the particularities of each warranty plan to ensure it meets your needs.
Keep in mind, with newer vehicles you're less likely to save money because the chances of your vehicle needing a major repair. Older vehicles however will more likely face unexpected repairs and justify CarShield's extended warranty.
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