The contract lays out the various systems and components that are covered, and at first glance, it's a pretty thorough list. But if you keep reading, you'll reach a section on "exclusions" on the third page. That's where you'll find this little stink bomb:
"Failures must be the result of a proven mechanical failure resulting from failure of the Protector 5/100 product."
I'm no lawyer, but that seems to be saying that if you can't prove your engine or transmission went kerblooey as a result of the Protector 5/100 oil additive not doing its job, you're not covered. And God knows how you'd prove that a major mechanical breakdown is the direct fault of an oil additive.
I called American Automotive back and related my concern. I was connected with Clayton, who said he was a manager at the warranty company.
He explained that a quirk of California law prevents companies like American Automotive from offering true extended vehicle warranties. Instead, he said, they could only offer a product warranty that comes with lots of extra coverage.
For this reason, Clayton said, the warranty from American Automotive seems to be about the oil additive, but it's actually coverage for a vehicle's various systems.
California law requires that any seller of an extended service contract be a licensed dealer. According to the Department of Insurance's website, any unlicensed company selling vehicle service contracts from out of state is breaking the law and can be charged with a felony.
Lynda Gledhill, a spokeswoman for Atty. Gen. Kamala D. Harris, declined to comment on the matter.
Legal issues aside, I pointed out to Clayton that his company's contract seems to let it off the hook for any mechanical problem that's unrelated to a "failure of the Protector 5/100 product." I asked him to show me any language that mitigates this sweeping loophole.
He couldn't. All he could do was reiterate that the coverage was comprehensive, regardless of what it may say in the contract.
It's like Chico Marx said: "Who are you gonna believe, me or your own eyes?"
The conversation ended there.
David Lazarus' column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to david.lazarus@latimes.com.
