(WSPA) – Any time you buy a big-ticket item like a car, the salesperson usually offers you an extended warranty, and you may have wondered, are they really worth it?

They are not the same as manufacturer warranties, which cover defects in production.

Extended service plans can vary widely. As we learned, in this 7NEWS Consumer Exclusive, even when you think you know what’s covered, you may be hit with surprises when you have a big repair.

Pat and Anna Brown paid $2,800 for an extended warranty when they bought their used Audi but quickly learned that protection was paper thin.

“It was a total letdown for us because we had read the warranty, we knew what was in there and we knew the engine was covered, but they found this loophole to get out of paying for it even though they had convinced us that it would pay for it,” Mrs. Brown said.

Who was so convincing is worth noting, but before we go down that road, the Browns learned the warranty company put the brakes on covering the engine failure because of a prior gasket repair.

“And I think they took some liberties because they control the narrative, they’re able to say well this oil gasket you had repaired a month earlier is the cause of the engine failure without ever actually proving that. We had two mechanics look at the car independently of each other and in writing say that there is no way to prove that that part caused the engine to fail,” Mr. Brown said.

We asked Attorney Ken Anthony to review the Brown’s extended warranty.

In his honest response, he said, “This thing was worthless from the beginning.”

Anthony found in the fine print that “mechanical breakdown” is defined as a “defect” or “faulty workmanship” in manufacturing. That means any issue not linked back to when the car was built won’t be covered.

It is those narrow stipulations in so many extended service plans that have led Anthony to one conclusion:

“Don’t buy an extended warranty. It’s just not worth the money because it has a very limited amount of coverage and is very difficult to collect on at the time it happens,” Anthony said.

Anthony was quick to point out that his warning does not apply to manufacturer warranties, which he said can be a smart buy.

However, with both he said it’s important to:

  • read the fine print
  • keep all car maintenance records
  • call the warranty company before any repair

Michael Morrison, who owns Cottman Transmission, said mechanics can tell you which extended warranty companies to avoid.

He said many leave the customer footing the bulk of the bill like a repair he was working on the day we talked to him.

“Most people think my transmission is covered from here to here, front to back every part of it. But they’re going at it, itemizing and saying no it’s just this part the rest of it failed because you kept driving it,” Morrison said.

Many car buyers get sold extended warranties by dealerships that don’t have control over what’s covered.

This brings us back to the Browns.

“The sales guy was very aggressively selling the warranty. He was telling me we really needed it for a used car, that if anything should happen it would cover everything,” Mrs. Brown said.

Therefore, with the power in the hands of the extended warranty company, and the burden of proof on the customer, the Browns are left with a $15,000 repair and a warning to steer clear of paying for a service plan that may never pay out down the road.