Buying A New Car? Watch Out For Dealer Added Insurances! Part Four

by Kevin Gipson, New Orleans Bankruptcy Attorney

November 1, 2007

In Part Three we saw a situation where the client was unaware that the insurance they had purchased through the car dealer was worthless because they had not purchased the necessary underlying collision insurance on their car.

While this situation is bad enough, client number three had a problem that is almost impossible to anticipate:  She was the victim of fraud by the car dealership.

Client three was sold an extended warranty on a used car that she had purchased.  Several weeks after purchasing the car it began to overheat. The mechanic told her that the repair bill was going to be in excess of $1,000.00.

When she attempted to make a claim on the policy the extended warranty insurer advised her that they had no record of a policy being issued to her, nor did they have any history of receiving a payment from the dealership.

As a result of a lawsuit we filed on the client’s behalf, we were able to determine that the car dealership had pocketed the money they had collected from the client for the extended warranty and had not sent it to the insurer.

Be careful when dealing with used car dealerships particularly those that offer their own financing and a variety of insurances.  It is a good idea to be sure that the car dealership is reputable by contacting your local Better Business Bureau.

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I've been a consumer bankruptcy lawyer for nearly 25 years. Since that time I have helped many people resolve their financial problems. I have been practicing law since 1986 and I am licensed to practice in all state and federal courts in the State of Louisiana. Because I am a sole practitioner, you know that your debt matters are being handled by me personally. In addition to my work with consumers, I am also frequently asked to speak at local seminars on bankruptcy law. I am member of the following organizations: • Louisiana Bar Association • National Association of Consumer Bankruptcy Attorneys • Bankruptcy Law Network My office is located at: 3920 General DeGaulle Drive, New Orleans, LA 70114 Telephone: (504) 368-4101

Last modified: February 23, 2013