Be warned about so called warranty insurance when buying a used car. The car dealer we bought our 10 year old mini offered a product through Australin Warranty Insurance. In reality it was not worth the paper it was printed on. First of all so called claims had to be approved by them which might mean having to take your car to a prefered repaier even if this was out of the way. More importantly the fine print meant they were offering a claytons product to older cars as they required older cars to be serviced every 3 months-a completely unrealistic cost on a car if it is not driven regularly. Everything about the contract smelled of a bushranger attutude to insurance and rude phone staff when I called with this query did’nt help. I have since sold the car and bought a new one but I would suggest to everyone to avoid this product.
We’ve been doing a lot of work on this at Consumer Action - this year we launched http://www.demandarefund.com which helps people complain and get their money back from extended warranties and junk insurance products sold with cars.
The big three to watch out for in car yards are:
- Consumer Credit Insurance
- Gap Insurance
- Extended Warranties
We’ve heard shocking stories of people being told they have to buy these products (It’s illegal for them to tell you that), commissions of up to 90% in some cases (what’s left to pay for the actual policy?), and in the case of some products, 1 in 5 people not even knowing they’ve bought it (slipped into paperwork without their consent or knowledge).
So, beware! If you know anyone who has got one of these products and wants their money back - tell them to go to DemandARefund.com 
Some good news.
