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LegalGems
LegalGems, Lawyer
Category: Consumer Protection Law
Satisfied Customers: 3204
Experience:  Research Attorney; Private Practice; Attorney Mentor; Mediator
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Car Loan I purchased a car in March and did the loan through

Customer Question

Car Loan

I purchased a car in March and did the loan through Wells Fargo. We added a two year bumper to bumper extended warranty to the financing.

three months later, the AC goes out and we find out the repair will be over 2k. With a 100 deductible through NWAN and full coverage, no problem.

The repair shop contacts the warranty company and we find out that my car is not covered. So we call the dealer, who says that the warranty company I signed the contracts for, stopped carrying that car, for that year and they need to go to another carrier. However, they forgot to have me sign the contract for the new carrier.

The new carrier covers about 20% less repairs with a 150 deductible increase.

My Question: Does this make the contract with Wells Fargo null and void, since the loan includes a full coverage warranty policy that does not exist?
Submitted: 1 year ago.
Category: Consumer Protection Law
Expert:  LegalGems replied 1 year ago.

LegalGems :

Hi! LegalGems here. My goal: To Do My Best To Assist You. Please remember, I can only provide general information,as this is a public forum.

LegalGems :

I am sorry to hear of this situation. One moment as I look into a few things.

LegalGems :

The warranty company was not WF, correct?

LegalGems :

It was simply financed through WF, with the warranty through NWAN?

Customer :

correct

LegalGems :

Thanks. The loan money that WF funded - did they send any of it to NWAN? I am trying to determine where the money that was borrowed for the warranty portion - where that money went.

Customer :

not sure

Customer :

they say the warranty was paid right away

Customer :

but this was over 3 months ago

Customer :

So I financed the car (and 6k down) based on the warranty

LegalGems :

If the warranty company accepted the money, the contract would be fully executed - meaning that failure to provide warranty coverage would constitute a breach of warranty.

Customer :

otherwise, it was a no go

Customer :

as the car is too expensive to repair

Customer :

So the NWAN Platinum warranty was the reason i moved forward

LegalGems :

In reviewing the dealer paperwork, were there any contingencies regarding the warranty? Or was it a T&C of the sale?

Customer :

Now....we have issues

Customer :

I think it was T&C of the sale

Customer :

The paperwork is with the car right now

Customer :

at the shop

LegalGems :

If it was a T&C, then the dealer would also be in breach. However, if the warranty was funded, then it would be a breach of contract/warranty issue with NWAN.

Customer :

The car dealer just wants me to quick sign the new contract and let them handle the repair

Customer :

but I don't trust that approach

LegalGems :

Well, yes, because that would solve their problem, not yours.

Customer :

Yes

Customer :

They didn't even send the new coverage over....just the contract for me to sign.

Customer :

Which is a red flag

LegalGems :

The first step is to get the paperwork and see if the warranty was a T&C of the sale. Then if so, failure to provide the specified warranty would be a breach of contract by the dealer. There are 2 types of breaches: material, and immaterial. A material breach goes to the very essence of the contract, and generally results in a rescission (voiding) of the contract. An immaterial breach goes to extraneous issues, and generally damages are awarded - economic damages- such as the difference between warranty #1 and W#2.

Customer :

Ok.

Customer :

what language do i look for?

LegalGems :

It would generally be included in the actual contract versus a separate contract with the warranty company. For example, it would be similar to a specific lender being included in the document (versus financing is contingent). However, I would also be concerned about the payout by WF - if NWAN did in fact receive and accept that money, then there is a binding contract to provide coverage. Otherwise, all warranty companies could say "oops, we don't cover that car anymore" when a problem arises.

Customer :

Ok

Customer :

There was a separate contract, but the warranty was mentioned in the wells fargo iteration

LegalGems :

And the contract was signed by NWAN or a representative (sometimes dealers are reps)?

Customer :

I would upload the new contract if i could

Customer :

I think the dealer, but not sure on that one

LegalGems :

Unfortunately we can't review legal documents as that becomes specific legal advice; whereas we are limited to providing general information for the customer to apply to the situation at their discretion. If a dealer is a rep of the warranty company, and the lender funds the warranty, and the warrantor accepts it, that would be a binding contract.

Customer :

basically, I'm screwed without taking legal action.

LegalGems :

Not necessarily - legal action would be filing a lawsuit. Instead, you may want to hire an attorney to write a demand letter, enclosing and highlighting the relevant parts of the contract, to both the dealer and WNAC, requesting that they honor the contract or they will be considered in breach; and that you intend to pursue legal action should an amicable resolution prove not possible.

Customer :

what if the warrantor does not accept payment?

Customer :

and the dealer does not inform the customer

Customer :

and the customer is not covered for the warranty they purchased?

LegalGems :

It sounds as if the warrantor already accepted payment - otherwise where did that portion of the WF money go? The dealer's failure to notify the customer could be considered negligence - or breach (again depending on the specifics of the contract). Also, there is an issue of possible misrepresentation, if the dealer represented that the warranty would be secured, and then failed to follow through on this.

Customer :

and the deductible goes up from 100 to 250

LegalGems :

That would be part of the economic damages if breach was established. However, it would be difficult to determine how often that deductible would need to be paid over the life of the contract. (warranty contract). So ideally, the solution would be to secure a comparable warranty to WNAC.

Customer :

ok

LegalGems :

Did you have any other questions on the above?

Customer :

no.

LegalGems :

OK. If you were interested in having an attorney write a demand letter I can link you to the state bar's referral service.

LegalGems :

As I will be going offline shortly, I want to make sure you have this information: http://www.cobar.org/directory/

Customer :

Do you think I should sign the new contract and hope for the best?

Customer :

" Richard it seems you are creating a problem and an issue that does not exist "

Customer :

that was from the dealer just now

Customer :

I told them I need to have a lawyer review it all before signing

LegalGems :

We are prohibited from giving specific legal advice, So I can't really say sign - or don't sign. I can tell you, however, that dealer's are notorious for engaging in high pressure tactics. If you sign the new contract you will be obligated under this new contract and will forego any legal remedies you may have had under the initial contract. This needs to be reviewed (so you will need to get it from the shop) so you know exactly what you signed. If the warrantor accepted payment, then it is an executed i.e. binding contract.

LegalGems :

If the dealer is anxious to get this resolved, as them to fax/email you a copy of all signed documents so you can try and get in and see an attorney today.

Customer :

I don't have time today. Either way, it will cost me 1000 plus dollars to figure out their screw up.

Customer :

So, I'm inclined to make this ugly for them.

LegalGems :

A demand letter generally can cost from $125-$250 as you aren't hiring an attorney to oversee the case - just to prepare a simple document. You really need to get the paperwork so you know exactly what the contract states. (I was suggesting the "today" idea so that the dealer might get nervous - and also help you avoid a trip to the location of the car).

LegalGems :

As for a warranty entered into subsequently, the repair shop is correct in that the new warranty company will not cover any pre-existing conditions.

LegalGems :

I will be away for approx an hour. If you have any follow up questions, please post them here and I will reply as soon as I get back. Thank you!

Customer :

ok

LegalGems :

Thanks.

Expert:  LegalGems replied 1 year ago.
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Expert:  LegalGems replied 1 year ago.
Thank you for using JA/Pearl! I hope you found my services helpful, as this is important to me.

If you need further assistance, please put TO LEGAL GEMS in front of the question and I will get back to you as soon as I can.

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