Ontario student pays nearly $3K for extended warranty on used luxury car, surprised repairs aren't covered

An Ontario student bought a used luxury car last July and because it was seven years old the car salesman advised him to pay extra for an extended warranty.

“I was told by the warranty company, when I bought the warranty, everything would be covered with the car," said Carter Roung of St. George, near Brantford, Ont.

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Roung purchased a 2016 Mercedes-Benz CLA 250 and said the car dealership charged an additional $2,922 for a one-year extended warranty.

He said, in his mind, it was described as a “bumper to bumper “ warranty and thought any repairs needed in the first year would be covered.

Last month, when he was driving, a check engine light came on and Roung said when he took the car to a repair shop he was told he needed emissions work done at a cost of $2,828.

“I went in with full thought that I was going to be able to use my warranty. A couple of days later I found out they are not covering it and I was very shocked," Roung said.

The warranty was through iA Dealer Services and the company told Roung in correspondence "the contract covers everything except what is in the contract exclusions. Diagnostics was not chosen therefore (it’s) not eligible for coverage.”

Roung's mother, Stephanie, said it was frustrating to pay almost $3,000 for the extended warranty and not have the repair covered and added it was difficult to find out exactly what is covered under the warranty.

An Ontario student paid nearly $3K for an extended warranty on a used luxury car, only to be told an emissions repair was not covered.

“When you purchase an extended warranty for something you expect it will be there for you if a problem arises with the vehicle, but that's not the case,” she said.

When you buy a new vehicle, it will come with a factory extended warranty which is generally very reliable and covers most repairs, however when you purchase a used car, third party or aftermarket warranties can come with exclusions and fine print.

Consumer Reports (CR) has researched extended warranties extensively and according to Automotive Reporter Benjamin Preston with CR their findings show extended warranties are usually not worth buying.

“Typically we recommend not going for an extended warranties. You would be better off setting aside money for eventual repairs," said Preston.

Preston added, “You're buying it for peace of mind, but it costs a certain amount of money to buy the warranty and then depending on what it does or doesn't cover, it might not really pay out.”

After CTV News Toronto reached out to iA Dealer Services the warranty company said the claim is “being resolved.”

The Roungs were told as a goodwill gesture they would be refunded the $2,828 for the repair which came as a relief to them.

“The warranty company has agreed to pay for my repair which is great news,” Roung said.

CR conducted a survey and found 55 per cent of used car buyers who purchased an extended warranty never used it and only 25 per cent said they would buy one again.

If you're buying a used car and you’re offered an extended warranty to purchase take the time to read the fine print.