2013 Chevy Equinox, blown engine, dealer won't honor warranty

Last November, my stepdaughter bought a 2013 Chevy Equinox from a local dealership, along with an extended warranty. Just a couple months later (Jan or Feb of this year) she had it back at the dealership because the engine was acting up. The service department told her there was an issue with the engine that caused unusually high oil consumption. Apparently this is a well documented issue.

At the time, the warranty company said they would not cover an engine replacement because the engine was still good. The dealership made it sound like there was nothing they could do, but offered to let her trade her car in on another vehicle.

Fast forward to last week, when she went to go to work in the morning and the car wouldn’t start. She had it towed to the dealership, who got back in touch with her yesterday to let her know the engine is shot and will need to be replaced. And again, the warranty company is refusing to pay for the replacement, this time claiming the engine failed because of a known oil consumption issue.

Needless to say, my stepdaughter and my wife and I are furious. It sounds like the warranty company wants to have it both ways. The dealership acts like they’re caught in the middle and helpless to do anything, other than (as before) let her trade the car in on another vehicle. At the very least it seems that the dealership should be going to bat for their customer.

This weekend I plan on looking through all of her paperwork from the purchase, including the extended warranty. And on Monday I plan on going to the dealership and raising some hell. In the meantime, I’m looking for some advice from my fellow Dopers who may have been in similar situations.

Offering an extended warranty on such an old car should have been a major red flag.
My guess is you’re screwed. There is likely wording in the contract that gets them out of everything.

Third party extended ‘warranties’ are essentially worthless. The dealership won’t “go to bat” because beyond getting a cut from selling it they have zero stake in it (and are not infrequently scamming the customer and warranty company themselves).

Stranger

Thanks for that link Stranger, very eye opening. I was thinking I should talk to someone at the dealership first, then talk to the warranty company directly if the dealership is no help. Maybe I need to contact the warranty company first, and see what they have to say.

Unfortunately, neither my wife or I was involved in the purchase. After months of not having a car, my stepdaughter decided to go out on her day off, went to the dealer, saw something she liked, and bought it that day. She probably did little to no research on the vehicle she was buying. And I doubt she read the warranty she bought, so who knows what they sold her.

If the dealership sold her an extended warranty that specifically did not cover an issue that they knew the vehicle had (or was likely to have), that sounds like fraud. Is this something where I could file a complaint with the state AG’s office?

As a counter-point, the third party extended warranty I had on my BMW 3 series was awesome, and paid for itself several times over. My mechanic (not the dealer) handled dealing with them directly, and absolutely went to bat for me on more than one occasion.

As with many things like this, your mileage may vary.

They’ve got your money so I think you’re screwed. But, you can make the argument that they had acknowledged the warranty of the engine with the above statement. If not then there was no warranty and they should refund the cost of the policy. It worked for me once.

Most state attorney general departments have an office for consumer complaints. However, if the extended service contract (which as Steve Lehto points it in the video, this probably is even though it was promoted as a “warranty”) has language excluding certain types of components, pre-existing damage, et cetera, you may have little legal recourse other than to lodge a complaint. My impression is that a lot of these third party “warranty” companies often go out of business after a few years and sell their liabilities to some fourth party which may or may not even be responsive to your inquiries.

It boggles my mind that a company would even offer comprehensive extended service contract on a BMW given the frequency and cost of repairs. I don’t doubt your story but given the number of BMW owners I’ve known in the last few years who have had major repairs even within the OEM warranty period I have to wonder how that company stays in business. Certainly dealing with a mechanic directly (who has an incentive to get paid) versus a dealer who is primarily interested in just selling you the car gives you a little more leverage but again, if the verbiage of the contract indemnifies the company from paying out on typical warranty claims it isn’t going to be worth the paper it is written on.

Stranger

By taking premiums and not paying claims?

I have never had a similar situation, but, in cases where I’ve had companies that refused to honor their contractual obligations (or were obviously trying to run me out of patience and hoping I’d go away), I have found some minor success in opening complaints on the BBB (if they were accredited). IMHO, they start realizing I was going to be a serious issue and that I was happy and willing to make the biggest possible stink about it in a forum that others could see, not just on the phone. So I started getting some cooperation at that point.

However, those were all for pretty minor ticket items. But if you start slamming both the dealership and the extended warranty folks in such a forum, they may do the right thing to kill the possible bad publicity. Worth a shot. The extended warranty company already has your money, and may well have a bad rep, but no dealership wants it to be known that they won’t honor the contracts they sell - or it’ll be harder to sell new cars (although not so much in the current market).

I too have had @Digital_is_the_new_Analog’s experience w warrantees on my current and prior used BMWs.

I bought one car from Carmax, one from a Mercedes dealer, and another from a Lexus dealer. So same general level of car as BMW, but with no expectation that I’d be bringing the car back to them for ongoing service.

Using a 3rd party shop that’s good at playing the game is very helpful to getting claims paid, versus bringing the vehicle to a dealership of that brand.

I’ve made a profit vs. the one-time premium for both the previous cars. I fully expect to make a profit on the current one too but haven’t had it long enough to accumulate quite that much expense. Yet.

Why didn’t she take the offer?

In US car parlance, “trade-in” doesn’t mean “exchange like for like” or even “exchange”.

It means they’d be happy to sell her a different car for that other car’s full advertised price. Plus at the same time they’d be happy to buy her dead car for whatever the wholesale price of a dead car that needs a new engine is. Like maybe $200.

So in effect she’d be paying for two cars, less $200, to get just one that runs. That’s a great deal … for the dealership.

There are “third party” warranties and there are manufacturer’s warranties. Many third party warranties are pretty much worthless, and are essentially scams. Manufacturer’s warranties tend to have a much better reputation.

Exactly this. They weren’t going to take her car back and let her pick another one off the lot, they wanted to sell her another vehicle and she’d just get whatever lowball trade-in value they threw at her for the first crappy car they sold her.

See, this is what really cheeses me off. Earlier in the year when she took it in, the warranty company made it sound like they would only replace the engine once it quit working, they weren’t going to replace a “good” engine. Basically, like they were trying to run out the clock on the warranty. But now that the engine is shot they’re making some other excuse for why they won’t replace it. I want to ask them "Under exactly what circumstances would you replace the engine? "

I’m not sure I understand all the legalities here, but one general comment I can make – and certainly something that would likely be effective if it was a GM warranty that was in dispute – would be to escalate it via a letter to a GM regional manager or VP. I’ve done this for a relatively minor problem that the dealer claimed he couldn’t fix because it wasn’t a problem, and I know someone else who did the same for quite a major problem. In my case, after my letter was sent, the dealer suddenly got creative and managed to fix the problem. In the other case, the person eventually convinced the company (in that case, Honda) to take back a new car that had turned out to be a lemon.

I understand that this involves a third-party warranty but if a GM dealership gets a shitty reputation then some of that rubs off on GM, so maybe they should care. Does this dealership sell new Equinoxes? GM is pinning major hopes on the new Equinox EV coming out next fall. Would be a pity of one of their Equinox dealerships gets a shitty reputation because you complained about them to a media consumer help department.

“Once I’ve exhausted every exception in the contract. And then I’ll just make shit up.”

This would have been the best option. You have a car that is worhtless and a warrantee that is worhtless. Get out of the deal with as minimal loss as possible.

Sunk cost fallacy; the stepdaughter has already discovered that the dealer sold her a probably defective car and a worthless extended warranty. What are the odds they’re going to treat her better the second time around, especially since she’s locked in with the trade-in?

Stranger

So what is the better solution? Continue to sink money into a lost cause? The warranty situation will not improve. The car is junk.