So I get this marketing postcard in the mail advising me to extend my car warranty (due to expire in December). It says "Call and activate now" and "Coverages available up to 125,000 miles!" The name of the company is National Dealer Warranties located in St. Peters, MO.

Out of curiosity, I decided to google the company name, finding this bulletin from the Better Business Bureau:

For Immediate Release
Contact: Michelle L. Corey, (314) 645-3300, [email protected]
Tracy Hardgrove, (314) 645-3300 [email protected]

The Better Business Bureau (BBB) urges consumers to use extreme caution when dealing with some independent companies offering extended automobile warranties.
The BBB has received more than 750 consumer complaints and over 23,000 inquiries regarding such companies during the past 36 months, and has issued consumer warnings regarding four companies in the industry in the past. Consumers allege that the companies, which solicit nationally, send misleading advertising by mail implying that a person's automobile warranty is about to expire.

One company which has come to the BBB's attention is Premium Care Warranty Services, 8126 Gravois Ave., St. Louis. The BBB has received 38 complaints and reports regarding the company during the past 36 months. On November 10, 2005, after the firm stopped responding to complaints, a BBB employee drove to the company's office and found that it was empty and had a "for rent" sign on the door. Soon after, mail was returned by the United States Postal Service as "moved, left no address."
Those who bought Premium Care warranties said the company sold them policies that failed to adequately cover repairs. They said the company either failed to provide refunds or was slow in providing them, and that it had rude employees. At least 15 of them did not receive their requested refund.
Tim Hughes, in correspondence with the BBB, identified himself as president of Premium Care Warranty Services.

Another company which has come to the BBB's attention due to the number of complaints and inquiries is National Auto Warranty Services, 339 Mid Rivers Mall Dr., St. Peters. Eighty-four motorists in several states complained to the BBB regarding the firm in the past 36 months. The firm failed to resolve several of the complaints, resulting in an unsatisfactory record with the BBB.
Complainants say that the firm sent misleading advertising, failed to provide refunds when service was cancelled, failed to refund the entire deposit, failed to cover repairs, and that they encountered rude customer service and were given the runaround or were unable to reach the company.
Darain Atkinson is listed as president of the firm, according to the Missouri secretary of state's Web site.

A company on which the BBB issued a warning in the past is Quality Care Warranty Services, LLC. Since the warning, Quality Care was purchased by Warranty Activation Headquarters, 12244 Tesson Ferry Rd., Ste. 300, St. Louis, on November 9, 2004. The BBB has received over 175 complaints and reports on these companies. Complaints primarily concerned misleading advertising, sold warranties which failed to cover repairs, were slow to provide refunds and poor customer service.
Chris Shoemaker is listed as president of the firm, according to the Missouri secretary of state's Web site.

Before purchasing an extended auto warranty, the BBB offers the following general information tips:

• Verify that your original auto manufacturer warranty has expired or is about to expire to avoid paying for coverage you already have.
• Check to see who backs the warranty. Warranty claims are often processed by independent companies called administrators. The administrators authorize the actual payments.
• Find out the price of the warranty and whether or not you will be required to pay a deductible when you make a claim. The price will depend on the vehicle's make, model, and condition, as well as the depth and duration of the warranty's coverage.
• Verify the warranty's coverage. Watch out for absolute exclusions that limit coverage, such as "mechanical breakdowns only." Normal wear and tear items may not be covered.
• Find out which of your local service centers will honor the warranty, and whether or not you have to obtain prior authorization for repairs or services.
• Know your responsibilities while owning the warranty. Failure to follow your manufacturer's maintenance requirements or taking your car to a dealer not authorized by the warranty company might void your contract.
• Inquire about the warranty's refund policy. Note that if the contract lasts longer than you expect to own the car, find out if it can be transferred, if there are any fees involved, and if a refund will be made.
• Contact the BBB at (314) 645-3300 or www.contactbbb.org for a customer experience report on a company with which you are considering doing business.