When you receive a call from an unknown number, it often features an automated voice delivering a message about your vehicle warranty expiring soon, suggesting that if you don't extend it now, you could face significant costs later. Many people may feel anxious hearing this, especially since it's been a short time since they purchased their vehicle. If the caller knows your car's make, model, and year, it can be even more confusing, making you wonder if it's a legitimate call from the manufacturer.

After receiving such a call, many people feel uneasy and wonder how their information was obtained. However, vehicle registration information is often publicly available through various channels, so it's likely not a case of hacking. The real issue is not the source of the information but the value of the product being sold in the call.

To put it simply, most of these calls can be ignored. There is data indicating that the frequency of these calls is quite unusual.

The Federal Trade Commission (FTC) reported that between September 2022 and September 2023, they received nearly 35,000 consumer complaints related to car warranties. Complaints about warranties and protection plans rank among the top types of complaints regarding do-not-call lists. In June 2022, there were nearly 1 billion automated warranty sales robocalls made in a single month. After the Federal Communications Commission began enforcement actions against related companies, the number of calls dropped to below 7 million by September of the same year, indicating that regulation had some effect.

In July 2024, warranty sales companies CarShield and American Auto Shield agreed to pay $10 million in settlements with the FTC, and in December 2025, the FTC announced that it would send a total of $9.6 million in refunds to 168,179 affected consumers. The scale of these actions gives insight into why this industry is so persistent in its telemarketing efforts.

So, if you do sign up for an extended warranty, will you get your money's worth? A survey conducted by Consumer Reports involving over 8,000 readers provides some useful insights. Among the respondents, 55% reported that they had never used their warranty for repairs during the coverage period, with the median premium they paid being just over $1,200. Even those who did use their warranty had similar experiences. About 65% of respondents said that the warranty costs exceeded the repair savings they received, with an average of $1,000 paid for the warranty but only $700 in benefits received. This means an average loss of $300. Another Consumer Reports survey found that the average initial cost of an extended warranty was $1,214, and over the entire contract period of 3 to 6 years, total expenses could range from $2,000 to $5,000.

Of course, there are exceptions. For certain European brands known for frequent breakdowns, the situation might be different. However, even in these cases, there's no reason to accept a sales pitch over the phone on the spot. If you believe you need it, you can always look for the official warranty programs offered by dealers or manufacturers, compare the terms in writing, and make a decision later.

I don't think we need to view warranty sales as inherently negative. It can be a rational choice for consumers to manage risk with money in the market, and there's no issue if the companies operate normally. However, practices that deceive consumers or pressure them into contracts, as seen in this FTC enforcement case, indicate a need for regulation to ensure the market economy functions properly. Free trade and consumer protection are not mutually exclusive concepts.

A characteristic of telemarketing is the pressure to make a decision immediately. If they ask for your credit card number or vehicle registration, you should be even more suspicious. A legitimate warranty company wouldn't demand an immediate answer.

Ultimately, the most reasonable response when receiving such calls is to simply hang up. There's no need to rush into a decision out of anxiety. If you truly need coverage, you can always research and sign up later, and just remember that statistically, extended warranties are often products that result in a loss.