ST. LOUIS (KMOV.com) -- It's the time of year when many people are weighing buying a new car or holding off, but consumer advocates warn including an extended warranty in that plan could be costly.

Extended warranties, also known as Vehicle Service Contracts (VSC), offer coverage for cars no longer covered by the manufacturer's warranty. Investigators with the Better Business Bureau (BBB) say St. Louis has become a hub for these companies and they've noticed a sharp increase in complaints.

Tom Ray is used to spinning in the DJ booth at his Delmar Loop record store, Vintage Vinyl. Recently, he keeps turning back to his car and a contract he wished he never signed.

"They seemed legit and we were trusting," Ray said.

The warranty was up on his wife's convertible, so Ray opted for an extended warranty. He picked AutoAssure, a company based in St. Charles County.

"We figured it was locally based and would be more responsive than others," Ray explained.

Ray paid a fee upfront, then made monthly payments over $100. The first time he tried to use the coverage to repair the car's cooling pan, a fix he thought was standard, he says his claim was denied.

"We were amazed at the fact that the repair was not covered," Ray said. "In the very, very small print it listed things it wouldn't cover."

That doesn't surprise BBB investigator Sarah Wetzel, who says many times, extended warranties come with a long list of what they don't cover.

"We realized that within the past three years, the complaints had nearly tripled," Wetzel explained.

Wetzel says in 2018, their St. Louis office fielded 544 complaints, in 2020 that number jumped to 1,402. Wetzel says 2021 is set to outpace that. According to the BBB it received the most complaints about CarShield. The company it received the second most complaints about was AutoAssure, Ray's pick.

"They felt misled by advertisements," said Wetzel, explaining the complaints they received. "They felt very stressed about the high pressure sales tactics over the phone."

It's a story that's played out before. In 2012, News 4 Investigates exposed Wentzville based US Fidelis. The company was co-owned by brothers Darain and Cory Atkinson. Both are now convicted felons, accused of using deceptive marketing to mislead customers, and in the process, made millions until their company crumbled.

The BBB says customers need to do their homework before buying a plan.

"It's important to do the math, see what you're paying in," Wetzel said. "You might be better off just putting that money into an account each month for a rainy day fund."

Wetzel says they also found that almost half the customers who bought extended warranties, never used them. The BBB believes its a policy change or added regulation could help protect customers.

"As regulators perhaps, maybe they should take a step and not allow the phone sales and that way require them to give everyone a written contract," Wetzel added. "That's where a lot of things get lost in translation is over the phone."

For Ray, it's too late. He lost all the money he put into the contract, plus the repair bill he had to pay out of pocket. That's why Ray's advice is simple.

"Assume the worst," he said.

It's important to note there's a difference between an extended warranty offered by a car manufacturer, and a VSC contract which is from a third party. Dealerships can give information about both.

Copyright 2021 KMOV. All rights reserved.

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