Is CarShield Legit? What You Need to Know Before Buying

Thinking about getting an extended warranty for your car? You’ve probably seen those CarShield commercials with Ice-T telling you how they’ll save you from expensive repair bills. But before you pick up the phone, you might be wondering: is CarShield actually legit?

I’ve researched what customers are saying, what regulators have found, and how CarShield stacks up against competitors. Here’s the unfiltered truth about this popular vehicle service contract provider.

What Is CarShield and How Does It Work?

CarShield sells vehicle service contracts (VSCs) – not actually warranties, despite their marketing. They’ve been around since 2005 and function as a broker, connecting you with third-party administrators like American Auto Shield who actually manage the claims.

They offer eight different coverage plans with monthly costs between $80-$170. One standout feature is they’ll cover vehicles with up to 300,000 miles, which beats most competitors. Plans range from basic powertrain coverage to their “bumper-to-bumper” Platinum option.

The process is simple:

1. You choose a plan and pay monthly
2. When your car breaks down, you file a claim
3. If approved, CarShield pays the repair shop directly

But that middle step – “if approved” – is where things get complicated.

The Good: Why People Like CarShield

CarShield has earned some positive feedback. On platforms like Trustpilot and Google Reviews, they maintain respectable ratings of 4.2/5 and 4.3/5.

Many happy customers point to:

• Month-to-month plans with no long-term commitment
• Coverage for high-mileage vehicles when other companies won’t touch them
• Successful major repairs being covered (some customers report $2,500-$6,000 repairs paid in full)

One Reddit user shared: “CarShield covered a $6,000 repair on my 180,000-mile Silverado. The transmission went out, and they paid without hassle. For me, it’s been worth every penny.”

Their flexible payment options and specialized coverage for motorcycles, ATVs, and electric vehicles also earn points with customers who have unique needs.

The Bad: Customer Complaints and Red Flags

The picture looks very different on the Better Business Bureau (BBB). CarShield holds a dismal 1.48/5 star rating based on over 2,400 reviews. The BBB has logged hundreds of pages of complaints, revealing some troubling patterns:

1. Claim Denial Tactics

Many customers report denied claims for questionable reasons like:

• “Pre-existing conditions” that weren’t detected during inspection
• Normal wear and tear being excluded (despite marketing suggesting otherwise)
• Repairs being classified as “consequential damages” not covered by the policy

One customer reported: “My oil pump failed, which is covered. But they refused to pay for the engine damage caused by the pump failure, calling it ‘consequential damage.’ The entire repair was $4,300, and they paid only $240.”

2. Administrative Runaround

Customers frequently complain about:

• Hours spent on hold with customer service
• Being transferred between departments with no resolution
• Repair shops waiting days or weeks for approval

3. Billing Problems

Multiple complaints mention:

• Unauthorized charges
• Difficulty canceling policies
• Partial or denied refunds

The Ugly: The $10 Million FTC Settlement

In July 2024, CarShield was hit with a major Federal Trade Commission lawsuit that resulted in a $10 million settlement. The FTC found that CarShield had engaged in deceptive practices, including:

1. Misleading advertising that promised “all repairs” would be covered when contracts contained numerous exclusions
2. Fabricated testimonials from celebrities portrayed as satisfied customers who had never actually purchased CarShield plans
3. False rental car promises that weren’t fully honored when customers needed them

The settlement requires CarShield to be more transparent, including posting sample contracts online and ending misleading marketing practices.

How CarShield Compares to Competitors

CarShield’s high mileage limit and flexible payment terms are advantages, but their customer satisfaction ratings lag significantly behind competitors. Endurance handles claims directly without a middleman, which may explain their higher customer satisfaction despite less flexible terms.

What’s Actually Covered (and What’s Not)

CarShield’s marketing suggests comprehensive coverage, but the fine print tells a different story. Here’s what various plans typically include and exclude:

Platinum Plan (Most Comprehensive):
✅ Engine, transmission, drive axle
✅ Electrical components
✅ Air conditioning
✅ Steering
✅ Brakes

❌ Regular maintenance items
❌ Cosmetic damage
❌ Consequential damages
❌ Pre-existing conditions
❌ Modifications

The “consequential damages” exclusion is particularly problematic. If a covered part fails and damages other components, CarShield often covers only the original part – leaving you with most of the repair bill.

Is CarShield Worth It? Doing the Math

To determine if CarShield makes financial sense, consider this example:

• Average monthly premium: $125
• Annual cost: $1,500
• Average 5-year cost: $7,500

The typical driver faces about $1,200 in annual repair costs for vehicles over 5 years old, according to AAA data. That’s about $6,000 over five years.

But here’s the catch: CarShield won’t cover all of those repairs. Regular maintenance, wear items, and many component failures may be excluded.

For many drivers, setting aside $125 monthly in a dedicated “car repair fund” might be more cost-effective than paying CarShield – unless you’re certain your vehicle is likely to need major covered repairs.

Who Might Benefit from CarShield?

Despite the concerns, CarShield might still be worth considering if you:

• Own a high-mileage vehicle (150,000+ miles) that other providers won’t cover
• Need month-to-month flexibility rather than a long-term contract
• Own a vehicle with expensive electronic systems prone to failure
• Cannot afford a surprise $2,000+ repair bill

Just be prepared to read the contract carefully and potentially fight for claim approvals.

How to Protect Yourself If You Choose CarShield

If you decide to go with CarShield, take these steps to minimize potential problems:

1. Request and read the full contract before signing up – not just the marketing materials
2. Ask specific questions about what’s excluded, especially regarding your vehicle’s known trouble spots
3. Verify that your preferred repair shops accept CarShield contracts
4. Document your vehicle’s condition with photos and maintenance records before coverage begins
5. Keep detailed records of all communications with CarShield

Alternatives to Consider

If you’re concerned about CarShield’s reputation, consider these alternatives:

• Manufacturer extended warranties directly from your car maker
• Credit union mechanical breakdown insurance
• Savings account dedicated to future repairs
• More highly-rated competitors like Endurance or CARCHEX
• New car purchase if repair costs are becoming excessive

The Bottom Line: CarShield’s Legitimacy Is Questionable

Is CarShield a complete scam? No – they do pay some claims and provide value to some customers. But their $10 million FTC settlement, poor BBB rating, and pattern of customer complaints suggest significant problems with their business practices.

Before signing up, weigh the monthly premiums against the potential benefits and carefully read the contract’s exclusions. For many drivers, CarShield’s coverage may not deliver the peace of mind their commercials promise.

Remember that no extended warranty covers everything, and the best protection against costly repairs remains diligent maintenance and choosing reliable vehicles in the first place.