CarShield makes big promises, but here’s what you need to know

ATLANTA, Ga. (CBS46) - Olivia Lee thinks of her 2001 Volvo as family. She bought the car four years ago, and is meticulous about its maintenance.

But the car has 158,000 miles on it, and when Lee saw a recent CarShield commercial, she decided to buy a warranty.

CarShield is a national company that markets car warranties, and 95% of those warranties, according to CarShield attorney Mike Carter, come from American Auto Shield.

CarShield makes big promises, offering coverage and monthly plans “on your terms,” according to its website.

“If you do the math, we have less complaints by percentage than almost any company you can name,” Carter said. “All of their percentage of complaints based on volume are worse than ours. Ours is two tenths of a percent given our value of business.”

So what’s the issue? In 2021, the Better Business Bureau (BBB) issued an alert about American Auto Shield, warning customers about a “pattern of complaints.”

A year earlier, the BBB issued a similar alert for CarShield and gave it an “F” for the company’s “misleading sales and advertising practices.” CarShield countered with a lawsuit and said the BBB is biased.

Last November, Lee filed a claim over her car’s transmission, and it was approved; Lee even got to choose her mechanic. But three different companies were involved in the claim: CarShield, American Auto Shield and King’s Automotive.

Lee said the car didn’t work properly when it was returned. The owner of King’s Automotive said he received approval from the warranty company to use a salvaged transmission instead of one that was rebuilt. CarShield said that’s not true.

“We don’t do salvaged transmissions,” Carter said.

The owner of King’s Automotive said he tried installing two different salvaged transmissions. Neither worked, but CarShield nonetheless paid him $2,000 and Lee got a car that didn’t work.

Lee was furious. After months without a working car, she bought a rebuilt transmission online and paid AAMCO to install it. While the car works great today, Lee still had to pay more than $3,200 to get her car repaired.

Then consumer investigator, Better Call Harry, got involved. Now, the owner of King’s Automotive has given Lee a partial refund in the amount of $700. CarShield maintains Lee’s complaint was with King’s Automotive and CarShield followed the terms of the contract. But later, CarShield agreed to reimburse her as well.

Here are the takeaways:

• Aftermarket car warranties could be a good investment, but before you sign that contract, pay a mechanic to do a prepurchase inspection, something you should do regardless.
• Keep up with your car’s maintenance and keep the records.
• If you car warranty claim is approved, ask the warranty company to send the check to you so you can pay the repair shop. But only when the work is done.

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