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Smart Shopper smart choice warranty HELP !
125 messages, Last post on Mar 10, 2008 at 10:36 AM
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| I wonder whether any one of those four companies can declare bankruptcy without the other 3 or DeltaGroup as a whole having to do the same. I read in an article early-on that a lawyer for SC&E said that SC&E was going out of business. My dealership told me the same. But apparently not, at least while all that reserve money is in limbo. My understanding is also that DeltaGroup forced the liquidation of NWIG in order to terminate their relationship with them, since NWIG kept asking for more money to cover claims. That dispute is what brought about the whole situation, and I haven't heard anything about that dispute going to court yet. Has anybody heard the latest on that? | |
| If the companies are set up properly one could go bankrupt without effecting the others. However, I would think that it may be possible to sue the parent company or its owners under certain circumstances. Usually, the main reason for setting up so many companies is protecting the group as a whole. The process of going out of business is a slow one. Look at NWIG, they didn't even lay any employees off until about 2 weeks ago! Which means they were still paying all those salaries. I know that it was a dispute between the two companies but the only versions I've seen came from NWIG people so I'm not sure I trust that and I haven't seen any info on a court battle over the dispute. | |
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| If you go to Section 6, titled "Legal Issues" (page 11) of the Joint Provisional Liquidators Report(I believe the JPL's were appointed by the Grand Court of the Caymen Islands), there is a description of the dispute between NWIG and SC&E that brought about the liquidation of NWIG. http://www.nwig.com/030716%20-%20First%20report%20to%20creditors.- - - - pdf I haven't seen anything about that dispute since this report. This is a MUST READ for anyone involved in this fiasco. I haven't read anything more informative about the causes of the NWIG liquidation. | |
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| Here is a link to a very interesting document about the SC&E/NWIG situation on the Iowa Insurance Division web site: http://www.iid.state.ia.us/division/orders/sce_info.pdf | |
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Two new news stories just came out in the Lincolnstar Journal on the NWIG situation. They both involve how the liquidators are trying to get back money that the NWIG execs seemed to have set aside at the last minute for their own legal defense. They are at: http://www.nebweb.com/business.php?story_id=95293 http://www.nebweb.com/business.php?story_id=95588 |
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I just found out about the liquidation and am another smartchoice warranty holder. this forum is great. scammedipna says that the contract says "the contract is between my and the seller" but it also says "" that the liabilities of the Contract are with the SC&E administrative Services" thus the murkiness. Has anyone had any success with the dealers? I am calling my dealer today and then calling the PA AG's office, but it would be great to know what other people are finding out. marcy |
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Hi Marcy. I am sorry to hear about your negative experience with Smart Choice. You definitely should contact the dealer that you purchased your contract from. They are not obligated to do anything for you, however, I have read in several articles that certain dealers who have sold Smart Choice warranties to consumers are covering repairs until this whole mess gets straightened out to keep their customers happy. These are some of the quotes that I was talking about: Source: Automotive News 7/4/03 - EDWARD LAPHAM COMMENTARY: Extended warranty troubles "July 4 -- There has always been a question about the value of buying an extended warranty on an automobile. Most consumers don't realize that they can negotiate the price of an extended warranty, which makes them big-profit items for dealers. But the game is changing. One of the big insurance companies that backs thousands of Smart Choice extended warranties sought protection from its creditors. Now, some dealers say they aren't being reimbursed and are paying for customer repairs out of their own pockets." Source: Automotive News 6/30/03 - Dealers caught in warranty war, Insurer's problems force tough choices "Five thousand dealers who sold service contracts under the financially troubled Smart Choice program may have to choose between two evils - pay off hefty repair claims themselves, or tell angry customers to slug it out with insurers. Either way, some dealers could lose.... The contracts, which can range from one-year to 10-year terms, cover repairs and parts for vehicles out of warranty. According to dealers, they sell a typical three- to five-year extended-service contract for $800 to $1,500. Some dealers may try to cancel the contracts because it may be cheaper to issue a refund than pay for a $6,000 engine job, says Kirk Borchardt, a Santa Barbara, Calif., lawyer who represents Smart Choice agents and their dealers.... Other Las Vegas dealerships are paying off repair claims, but they aren't happy about it. 'I am concerned we are going to be left holding the bag on 700 warranties,' says Tom Downer, COO of the Fletcher Jones Management Group. 'I won't believe anything until I see some claims money....' Dealers face tough choices. Customers could blame them for selling them a worthless contract. And if a dealership pays for the repairs as a goodwill gesture, it might be held legally liable for other contracts, says Mike Charapp, a Washington dealer attorney. 'The problem with starting to cover repairs is once dealers start eating repairs, where do they stop?' That question worries Chicago dealer Jeff Jacobs, owner of Jacobs Twin Auto Plaza. When he started selling Smart Choice in 1996, the warranty looked rock-solid. But in the last three weeks, Jacobs has paid $30,000 for customer repairs that should have been covered under the contracts. He stopped selling Smart Choice three years ago, but Jacobs still has 2,500 contracts outstanding. The company that insures Jacobs' dealership has told him the claims are not covered under his general liability policy. 'You are more likely to get claims as the cars get older,' says Jacobs, a multifranchise dealer with $150 million in annual revenues. Transmissions and engines can cost $3,000 to $7,000 to replace, he says. If a dealer gets two or three such claims a month, he may end up spending $100,000 to $200,000 a year on repairs. Says Jacobs: 'This is a snarled mess with no easy answers.'" Again, there's no guarantee that they will work with you, but you don't have anything to lose, especially if you have a good relationship with this dealership. Car_man Host Smart Shoppers / FWI Message Boards |
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I purchased a new Chevrolet in October, 2002. I also purchased the Smart Choice extended warranty for $1,175. In November, 2003, I traded this vehicle in on a new 2004 Chevrolet and purchased an extended warranty for this one (not sure who the service contract is with, but am calling today to cancel it.) I never used any portion of the extended warranty and the 2002 vehicle was still under manufacture warranty. The two vehicles were purchased from different dealerships. I went back to the dealership I bought the 2002 from to get a refund on the extended warranty. They told me that the extended warranty was with Smart Choice and not them. That Smart Choice went belly-up and that I would not be getting a refund. I was not told this when I purchased the extended warranty, but was led to believe that this was an extended warranty from the General Motor Corporation on both vehicles. I have given the dealership 24 hours to pay the refund on the warranty. If I am not reimbursed by the dealership then I will take it to the news media. Does anyone know if all General Motor dealerships use Smart Choice or if they are the only dealerships that use it? Does anyone know if there is any legal class-action suit on this issue in behalf of the consumers? |
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| i to would be interested to no if there are any lawsuits going on to cover my repairs i have already had done and am waiting on reimbursement for. should i report the car dealership to my ag for not even attempting to help me? thanks, kim | |
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| Hey Car_Man, I'm not so sure dealers have no obligations (although I sure they would like everybody to believe that.) My contract says that the contract is between me and the dealer, with SOME of the responsibility, etc...resting with SC&E. I certainly haven't let my dealer off the hook!!! I have filed papers with my state's Attorney General, against the dealer, and I encourage ALL people who got taken to KEEP THE HEAT ON THE DEALERS who sold them the contract. After all, they sold you the contract and made money doing it. I have also contacted my local police and they state that as long as I'm not blocking traffic or trespassing, I have every right to exercise my right of free speech and let everybody know how I feel about this dealership. I've already thought up a few good slogans for picket signs. | |
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