Uncovering Secret Warranties on Cars

Last Updated Mar 1, 2010 11:32 AM EST


Imagine you're a car maker who wants to defuse a potential bombshell. You just learned about a nasty defect in one of your models. How do you reckon with the trouble without the toxic publicity of a recall? You might whisper to dealers that it's fine for them to quietly provide free fixes to owners who complain. That's how Toyota kept the lid on its sudden acceleration risks as early as '02 Camrys, according to investigative firm Safety Research and Strategies
Almost all carmakers use "secret warranties." You, too, may be able to get persistent flaws in your car fixed free even if your warranty has expired --provided you can track down other complaints and negotiate shrewdly with your dealer.

Finding out if your vehicle is covered by hush-hush arrangements can be tricky, say advocates at the Center for Auto Safety (CAS), who originally discovered and named secret warranties in the early '70s. "Manufacturers increasingly have worked hard to keep secret warranties secret," says executive director Clarence M. Ditlow III.

The CAS estimates about 500 secret warranties are in force at any time and says the number has grown over the past decade since regulators often haven't demanded full safety recalls.

Your job finding out about secret warranties may be a little easier if you live in California, Connecticut, Maryland, Virginia or Wisconsin, which require owner notification of them.

If your car has a chronic problem that seems dangerous, here's how to crack the codes of secret warranties and get what you deserve:

Start with the government
Check the web site of the National Highway Traffic Safety Administration (NHTSA). Go to the Defects and Recalls section and search three sections: defect investigations, complaints and technical service bulletins.

Defect Investigations. Check to see if problems like yours triggered a NHTSA investigation. If one is underway, it may strengthen your case for a free repair. But if (as in the case of Toyota unintended acceleration for '02 Camrys) NHTSA closed the investigation without ordering any action, it undermines your argument.

Complaints. In the Search Complaints section, see if other owners raised your problem and if they took their cars to the dealership. Be especially alert for a notation that the dealer repaired the car at no charge and show it to your dealer.

Technical service bulletins. NHTSA puts summaries of these safety-related documents on its site, but getting full versions takes several weeks or longer. If evidence from investigations or owner complaints make it likely that your car company has detailed fixes for the problem, buy a full set of bulletins at the Alldata consumer web site for $26.95.

Getting a Free Repair
Take printouts bolstering your case to the dealership."If you have done your research and have the documents, you should be in a stronger bargaining position," says Sean Kane, whose Safety Research and Strategies does general auto safety research and also works with plaintiffs' attorneys. But you're not assured of a free repair. You could get a discounted fix or be asked to pay full price.

You have a better chance of a free repair if you are a regular customer of the dealer or have:

A car under original warranty.

A technical service bulletin that mentions "goodwill assistance" or "goodwill adjustment." That's manufacturer's code for a secret warranty.

A bushel of NHTSA complaints for the same problem, especially if one mentions a free fix by a dealer.

If you get no satisfaction from the dealer, call the manufacturer's regional office, often listed in the owner's manual, and repeat your case. If you're still rebuffed, write complaints to top executives at headquarters.

Remember, it's the squeaky wheel that gets the grease.

Photo courtesy of Toyota Motor Sales USA Inc.

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    Jerry Edgerton, author of Car Shopping Made Easy, has been covering the car beat since Detroit companies dominated the U.S. market. The former car columnist for Money magazine and Washington correspondent for Business Week, Edgerton specializes in finding the best deals on wheels and offering advice on making your car last.