What Is Vehicle Service Contract

Only a few car maintenance contracts cover all repairs and maintenance. Beware of exclusions that deny coverage for any reason. For example, if the contract states that only “mechanical failures” are covered, problems caused by normal wear and tear can be excluded. You may even have similar coverage through some of your other financial products. For example, car insurance could cover car rental costs and roadside assistance, while your credit card could cover trip interruptions. If you`re buying an auto service contract that offers similar benefits, make sure you don`t duplicate coverage and check how much the service contract pays for a claim. The cost of a vehicle maintenance contract depends on the duration, mileage covered, deductible, and completeness of the plan. The year, make and model of your car also help determine the cost of the plan. As a result, a vehicle maintenance contract can cost anywhere from a few hundred to a few thousand dollars. If you decide to purchase an auto service contract, you may be able to negotiate the price of the car or contract. This strategy works best when you have multiple offers on hand, so do some research before you visit the dealership.

Before you buy an auto service contract, compare it to your car`s warranty to see when the coverage applies and if it overlaps. Another option is to rely on your car`s warranty. After all, that`s what it`s for, right? Of course, your car`s warranty must still be in effect (i.e. active) if it has to pay for the covered repairs. If you have exceeded the distance traveled or the manufacturer`s warranty period has expired, you are unlucky and will have to pay for the repairs out of your own pocket. Depending on your situation and personal calculations, a vehicle maintenance contract may still make sense to you. How do you then determine if a particular plan is worth what it costs? You can find one of them through a car manufacturer, car dealership or warranty administrator. The service provider can set a deadline within which you can purchase the service contract – for example, until the end of the first year of ownership.

If your car needs to be repaired and it falls under the contract, file a complaint with the service contract provider. Payment will be sent directly to the repair shop. When you buy a new car, you are usually insured against mechanical failures under the manufacturer`s warranty for a few years. However, most vehicle owners keep their cars long after the manufacturer`s warranty expires, which means they eventually have to start paying their own repair bills in the event of a problem. If possible, try to purchase a plan that is considered transferable. Transferable service contracts could potentially increase the resale value of your car. When you buy a car, your seller can offer you a car service contract. Automotive service contracts are designed to protect you from unexpected or costly repairs. However, you may not need it if the car already comes with a manufacturer`s warranty or if you have the same protection against an insurance policy or credit card benefit.

Before you spend the extra money on an auto service contract, research what they cover and whether it makes sense to buy one. Customers want a fast and simple service. That`s why CARCHEX has a 99.9% customer satisfaction rate, as well as industry rewards and rewards, including: Coverage varies by provider and contract, so read the policy before signing up. They usually come with a long list of exclusions, such as routine maintenance, normal wear and tear, theft, and vandalism. If a service is not listed, assume that it is not covered by the policy. Then comes the logistics to bring your disabled vehicle to a safe place. Of course, it`s not without its unexpected blow to your finances. The average tow costs between $50 and $125 for a local tow of five or 10 miles. On average, a long-haul tow starts at $75 plus an additional fee of $2 to $4 per mile. This is where a vehicle maintenance contract comes into play. Sometimes referred to as an extended warranty plan (although it`s not officially a warranty by legal definition), a vehicle maintenance contract is a paid plan that helps cover the cost of repairs required after the limited warranty expires. As the car ages, the likelihood that it will need to be repaired increases.

The biggest benefit of getting a vehicle maintenance contract is the potential savings on unplanned repairs for a car that is no longer covered by a factory warranty. Unlike some extended dealer warranties, many Endurance contracts don`t charge a deductible, nor do they require you to visit a specific dealership. You can choose any repair shop you like and just have to pay a monthly payment that fits your budget. Before you sign on the dotted line, look around to compare plans from different providers. Because a VSC can be added to a car at any time, there is no time limit on when you need to buy a plan, and you shouldn`t feel guilty about rejecting what a dealer or lender offers you. Comparative purchases can help you find the best value for money, with coverage that best suits your needs and budget. The advantage of buying an auto service contract from a dealership is that you will always receive original spare parts from your manufacturer if one of your auto repairs is covered. On the other hand, however, you are also limited to maintaining your vehicle at one of your manufacturer`s authorized service centers. Don`t plan to take your car to your favorite body shop and take shelter. But wait. Don`t dealers also offer extended warranties or vehicle maintenance contracts once the factory warranty expires? What is the difference between a dealer`s extended warranty and a third-party extended warranty? The value of a vehicle maintenance contract depends entirely on the company you buy from, the amount you pay, what is covered, and the condition of your vehicle. Keep in mind that these days it`s not uncommon for motorists to put more than 150,000 miles on their car during the life of their vehicle, so if you plan to keep your car for a while, a vehicle service contract may be worth a look.

Vehicle maintenance contracts work in the same way as car insurance: before repairs are covered, you need to make a claim and pay a deductible. Depending on your specific service contract, you may need to obtain prior approval from the plan provider before repairs can be made. First, let`s define both warranties and vehicle maintenance contracts. According to the Department of Justice, a warranty is a statement by the seller or manufacturer that follows: A deductible is the amount of money you must pay before a vehicle maintenance contract is paid for a covered repair. If your plan has a $100 deductible and a covered portion costs a total of $700, you will have to pay $100 before your plan pays the remaining $600. Vehicle maintenance contracts may be worthwhile, especially for used vehicles, if you buy from a reputable brand and enjoy having some peace of mind, even if your service contract doesn`t save you money. For some people, just knowing that they have a clearly defined limit on how much they will spend on repairs is more important than saving money on actual repairs. For others, contracts will be useful and may end up saving these customers a few hundred or thousands of dollars.

Of all the vehicle service contract providers we`ve reviewed, Endurance is the one we recommend the most. In fact, we`ve rewarded it overall for its extensive repair network, excellent customer service, the fact that it`s directly related to the repair shop, and the number of different coverage options it offers, from a powertrain warranty to a bumper-to-bumper warranty. Depending on your choice and budget, some VSCs have deductibles as low as $0, which means that all covered repairs will be paid for by your service contract. Choosing a low deductible makes up for the financial burden that is placed on you if your car needs an unexpected repair. However, third-party verification doesn`t take long (we`ve already done it for you in this article), and when you find a supplier you like, you often have a lot more flexibility in terms of repairs. Endurance, for example, has a gigantic network of service providers in the United States, so you`re much more likely to have your car repaired at your favorite local store and still be covered. .