Minnesota Attorney General's Office
1400 Bremer Tower
445 Minnesota Street
St. Paul, MN 55101
(651) 296-3353
(800) 657-3787
M - F 8 am - 5 pm
TTY:(651) 297-7206
TTY:(800) 366-4812
Motor Vehicle Service Contracts (PDF)
The Minnesota Attorney General’s Office encourages Minnesota automobile owners to fully understand motor vehicle service contracts, sometimes referred to as "extended warranties," before purchasing one. Although these contracts are intended to cover unexpected and costly vehicle repairs after the original warranty has expired, they may contain fine print that limits the coverage available. Before buying a service contract, consumers should first fully understand both the terms of the contract and who is responsible for providing the coverage and consider the following tips:
Only buy from reputable companies
- Check out the name of the company appearing on the contract. This company is often a third-party administrator that handles claims when breakdowns occur. Ask for references and check the company out with the Attorney General’s Office and Better Business Bureau.
- Also be sure to find out if an insurance company backs up the obligations of the service contract. Minnesota law requires that a service contract be backed up by insurance. The insurance company is obligated to satisfy the terms of the contract if the service contract issuer fails to do so. The service contract is required by law to clearly state the name and address of the insurance company. If this information is not stated in the contract, do not buy the contract. If this information is stated, you may still wish to contact the Minnesota Department of Commerce at (651) 296-2488 to obtain further information about the company.
Carefully review the contract before purchase
- A reputable company should allow you to review the contract before you buy it. Remember that sales brochures are not contracts. Review the contract before you buy it or make a deposit on it.
- Regardless of what you may be told, few service contracts cover all repairs. When reviewing the contract, pay particular attention to the "exclusions," or those things the contract will not cover. The exclusions are usually listed near the back of the contract. Be wary of exclusions that may deny coverage for any reason. According to the Federal Trade Commission (FTC), examples of these exclusions may include the following:
- "If a covered part is damaged by a non-covered component, the claim may be denied," or
- If the contract specifies that only mechanical breakdowns will be covered, problems caused by "normal wear and tear" may be excluded.
- Look for any requirements or conditions you must meet in order to obtain coverage under the contract. Service contracts typically state that in order to be eligible for coverage under the contract, you must perform a certain type of maintenance on your vehicle. For example, the contract may require you to change the oil every three months and provide proof that this has been done. If something later goes wrong with your engine and you cannot prove that the oil was changed every three months, the company might deny your claim (even if the oil change had nothing to do with the needed repair).
- Determine whether the contract has any deductibles and carefully review how those deductibles apply. For example, a contract may have a $100 deductible for each repair or for each component repaired.
- Find out if you need prior authorization from the contract provider in order to have repair work done on your vehicle. People have been denied reimbursement for repairs because they did not get prior authorization before having repairs performed.
- You may be able to negotiate the price of service contracts purchased through car dealers, just as you would negotiate the price of a car or trade-in vehicle.
Where to go with questions
If you have a question or complaint regarding a service contract, you may contact the Minnesota Attorney General’s Office by mail, phone or electronically as follows:
Minnesota Attorney General's Office
1400 Bremer Tower
445 Minnesota Street
St. Paul, MN 55101
(651) 296-3353
1-800-657-3787
TTY: (651) 297-7206
TTY: 1-800-366-4812
For further information regarding motor vehicle service contracts you can visit the Federal Trade Commission Website at: www.ftc.gov and look for links to Consumer Protection and Automobiles.
For information about the insurance that is required to back up the obligations of motor vehicle service contracts, you may contact the Minnesota Department of Commerce at:
Minnesota Department of Commerce
85 East Seventh Place, Suite 500
Saint Paul, MN 55101
(651) 282-5064
1-800-657-3602
www.commerce.state.mn.us