Motor Vehicle Extended Service Contracts
Most new cars come with a factory warranty that is included in the price of the vehicle. But some consumers buy motor vehicle extended service contracts on cars whose factory warranty has expired. MVESCs typically cover the cost of repair, replacement or maintenance of their vehicle, due to defects or normal wear-and-tear. These contracts are available from a car dealership, or they may be advertised on television, radio, online or sold by telemarketers.
To protect consumers, Missouri law says administrators, providers and other producers (marketers) of motor vehicle extended service contracts:
- Must offer a “free-look” period. Consumers can get a full refund within 20 business days from the time the contract is issued or mailed. Any refund not paid in full within 45 days of the return of the contract will be assessed a 10 percent penalty each month until the refund is paid.
- May not use the word “warranty” in the sales and marketing materials.
- May not claim a false affiliation with a motor vehicle manufacturer or dealer.
- May not falsely claim to know the status of the consumer’s factory warranty.
- May not use deceptive practices in any term or provision of a motor vehicle extended service contract.
Tips for consumers shopping for motor vehicle extended service contracts:
- Verify the company is properly licensed to do business in Missouri by calling the Department of Insurance Consumer Hotline, 800-726-7390.
- Be suspicious of mail or phone solicitations that suggest your factory warranty is about to expire.
- It is illegal for telemarketers to call you if your phone number is on the Missouri No Call list or the federal Do Not Call Registry.
- Check to see if your manufacturer's warranty is still in place. If so, you could be purchasing unnecessary coverage.
- Be sure you clearly understand what company or companies you are doing business with. Often, the company that sells the contract (the producer) is not the company that backs the contract and pays claims (the provider) or the company that administers the contact (the administrator). The contracts are required by law to name these companies; the sales person (producer) you are dealing with should also be able to give you this information.
- Before agreeing to purchase an MVESC or make payment, request a written contract to review. If you request a written contract, the law requires companies to deliver one to you (or direct you to an online copy) prior to processing any payment. Review the terms and be sure you understand them.
- Don’t do business with strangers. Instead choose a company that’s known to you or recommended by someone you trust.
- Missouri law requires motor vehicle service contracts to explain exactly how the repair and reimbursement process works, including what repairs are covered and any deductibles that apply.
- You can get a full refund within 20 business days from the time the contract is issued or mailed.
Resources for consumers
How to file a complaint
Before your complaint can be processed, you must first submit the following documents along with your
consumer complaint form:
- Copy of vehicle service contract
- Copy of all invoices reflecting repair costs associated with your vehicle service contract claim
- Copy of financial documents showing the method of payment for the vehicle service contract
- Copy of all correspondence received or sent to the vehicle service contract provider
Vehicle Service Contract Laws