—
CarShield and American Auto Shield have been sued over their vehicle service contracts that allegedly don’t provide consumers with the advertised warranty services.
A “vehicle service contract” is different than a new vehicle warranty or an extended warranty available from an automaker.
The vehicle service contract is purchased separately from a car manufacturer warranty and is supposed to provide warranty coverage beyond the terms of a warranty from an automaker.
But according to a class action lawsuit, CarShield, which markets contracts from American Auto Shield, falsely advertises the vehicle service contracts which often leave vehicle owners paying thousands of dollars for repairs.
The lawsuit alleges CarShield and American Auto Shield make misleading claims about the vehicle service contracts that do not match real-world results. The three customers who filed the class action contend CarShield and American Auto Shield advertise that “with a service contract from CarShield, your covered repair claims will be paid 100% by your administrator.”
Advertising also says there is a “crystal clear” and timely claims process where customers can use their chosen repair facility.
In 2024, CarShield and American Auto Shield settled a lawsuit brought by the Federal Trade Commission for $10 million. The government accused both companies of using false advertisements and deceptive reviews to sell their vehicle service contracts.
CarShield and American Auto Shield have long used endorsements from celebrities to sell the vehicle service contacts. But the FTC determined many celebrities promoting CarShield had never used any of the vehicle service contracts.
CarShield and American Auto Shield Lawsuit — The Plaintiffs
North Carolina plaintiff April Lindsey-Evans says she purchased a CarShield vehicle service contract for her 2010 Volkswagen Tiguan, paying $89.99 per month to maintain her coverage.
She paid for coverage from 2020 to 2024 when her VW Tiguan wouldn’t start, so it was towed to a dealership. CarShield and American Auto Shield were contacted.
For several weeks the dealership worked with CarShield and American Auto Shield regarding the repairs, but the defendants told the dealership an engine teardown was necessary. However, the dealer said this was not necessary.
Two months later the plaintiff was allegedly forced to pay nearly $3,000 to repair her vehicle even after spending years paying for her vehicle service contract. In addition, she had to pay about $800 for alternative transportation, and during the entire process she continued to pay her monthly CarShield premium.
Illinois plaintiffs Brenna Sebek and Kevin Sheehan pay $169.99 per month to maintain their CarShield and American Auto Shield coverage for a 2016 Volkswagen Jetta.
The plaintiffs complain they were forced to pay $3,500 for repairs and another $1,500 for alternative transportation.
“When Plaintiffs requested more information about the contractual basis for denial, Defendants provided inconsistent answers, including stating that ‘nothing is wrong with the vehicle,’ despite the mechanic’s diagnosis report and quote for necessary repairs.” — CarShield lawsuit
According to the class action, CarShield and American Auto Shield don’t back up their vehicle service contracts and may take several weeks or months to make a decision about repair claims. The plaintiffs assert the vehicle service contract terms are violated which throws the repair expenses onto vehicle owners.
CarShield and American Auto Shield are accused of false, deceptive and misleading advertising of vehicle service contracts that do not provide the promised coverage.
The CarShield and American Auto Shield lawsuit was filed in the U.S. District Court for the Eastern District of Missouri: April Lindsey-Evans, et al., v. NRRM, LLC d/b/a CarShield, LLC, American Auto Shield, LLC, et al.
The plaintiffs are represented by Peiffer Wolf Carr Kane Conway & Wise, LLP, and Sauder Schelkopf LLC.