Peter O’Brien survived a bad car crash in June with bumps and bruises, but the Audi he was driving was a total loss. And without adequate insurance on the car, O’Brien’s finances took a big hit, too.
Desperate to scrape together a few bucks, O’Brien, 44, a full-time graduate student, figured he could get a quick refund of the $799 he had paid Audi for future maintenance on his vehicle — now, never to be used.
But he was wrong.
O’Brien and a friend, Paul Paglia, spent weeks presenting some pretty sound logic to Audi: He no longer needed the prepaid maintenance because the car he bought in January had been destroyed and sold for junk.
“It was to cover the first two appointments for maintenance, which were never used,” Paglia said. “The car had never been at the dealer for service before it was totaled.”
O’Brien had purchased the bright blue 2015 Audi A3, with 55,800 miles on it, at Audi Natick. The car, which O’Brien said he loved, had cost about $17,000. The sales staff separately sold him an Audi service plan, known as Audi Care, which is created and controlled by AudiUSA, the national corporation (not the dealership).
I’m not sure why anyone would pay upfront for future maintenance. I think it’s always advisable to hold your money until you absolutely must part with it. You don’t know what may occur between the time you pay for something and when you expect to receive it — like getting into an accident that totals your car.
And asking for the return of your money is never a good position to be in.
On its website, AudiUSA says its service plan saves money, based on a comparison of its prices and those of local dealerships, although “actual savings will vary.” It also touts the program as a hedge against inflation (though inflation is at a historically low 1.3 percent).
To me, AudiUSA’s pitch doesn’t make a convincing case for paying $799 in advance, just to wheel your Audi into the service department for oil changes, tune-ups, and inspections without (further) opening your wallet.
But to O’Brien, excited about the beautiful vehicle he was about to drive off the lot, the Audi service plan “seemed like a genuine, reasonable offer,” he said. Maintenance on his car was scheduled for when the odometer hit 65,000 miles and 75,000 miles.
Then the crash happened. Last month, AudiUSA finally sent O’Brien a check, but it was for $250, without explanation of why it was keeping the remaining $549.
When the dealership asked for an explanation on O’Brien’s behalf, it received this terse and weirdly worded statement from AudiUSA: “When the vehicle totaled the refund is $125 for each service not used.”
“That made no sense,” Paglia said.
I found the Audi Care cancellation policy on its website. It consists of only a few words: A purchased service plan “may not be canceled and is non-refundable.”
Such a declaration obviously doesn’t make it so, and if challenged in court, I doubt it would hold up when the covered car no longer exists.
Seth Marshall, Audi Natick’s general manager, sounded exasperated with the national corporation when I talked with him, saying he wanted O’Brien to be made whole, but his hands were tied.
“We’re totally empathetic toward him,” he said of O’Brien. “We don’t disagree with him. We get it. If it were up to us, candidly, we would make a different choice.”
Marshall said the dealership makes about $100 every time it sells a service plan for AudiUSA. “It’s not a high-margin sale for us," he said.
After I contacted AudiUSA, the issue was quickly resolved in O’Brien’s favor.
AudiUSA will reimburse O’Brien “as a goodwill gesture,” a spokesman wrote in an e-mail to me.
Then AudiUSA went further: “As part of the continuous improvement of our Audi Care offering, we will revisit the terms going forward.”
So O’Brien gets his full $799 refund, and AudiUSA says it may change its cancellation policy.