Car Warranty Company Goes Under; Thousands Without Coverage

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Story Published: Jul 31, 2008 at 5:27 PM MST

Story Updated: Nov 21, 2008 at 12:01 AM MST

By Rick Montañez

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IDAHO FALLS- A local couple is upset tonight because the company that is supposed to honor their car warranty is basically out of business. Thousands of dollars and several phone calls later, this viewer says he's stuck.

The biggest issue we've noticed today is the company that went under now leaves almost 2 thousand dealerships nationwide with customers that don't really have warranties.

Joe Sumerville bought this car from a local dealership.

"At the time I thought it was a typo error, I thought this can't be," says Somerville.

And he paid more than $1,700 for a warranty, and he later found out the warranty company went bust.

"Rick: you buy the warranty for security right?
Joe: Correct, and then to be told you have no security and you have to pay more to have the work done to get your car back. "

I called the company, what used to be Ultimate Warranty Corporation...they now go by Capital Assurance Risk Retention Group...I found out this group was hired by the feds to basically clean up the mess left behind. Ultimate Warranty filed a rehabilitation plan, they are now in court to get back their assets that were frozen by the government. If that happens some of the customers, like Somerville, do have a slight chance of getting some money back.

"It's a terrible feeling because I feel like where do I go now," says Somerville.

Sumerville, like many of those dealerships is stuck between a rock and hard place. At the time of the companies collapse, about $44 million in claims were just left there. And since their assets are frozen there is no guarantee of getting your money back.

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