Should You Buy a Service Contract on a Used Car

Buying a contract is easy and most come with a 30-day money-back guarantee. A vehicle maintenance contract may be worth it if you expect not to be able to cover unexpected repairs out of pocket. A maintenance plan is more useful for cars that are a few years old and whose warranties have expired. Many automotive service providers offer coverage between these two extremes, such as blueprints that cover your powertrain, as well as your brakes, air conditioners, audio systems, or other critical components. Third-party providers operate completely independently of their manufacturer. This comes with some risks: Unlike buying an extended warranty from Ford or Hyundai, you`ll need to look for a third-party supplier to make sure the company is trustworthy. If you`re having trouble unsubscribing from your extended warranty plan, try posting a complaint on the company`s BBB profile or on the Federal Trade Commission (FTC) or Federal Communications Commission (FCC) websites. These websites track consumer reports of fraudulent marketing practices. The FTC fines companies that violate customer service laws regarding phishing and fraud tactics. Reputable companies with an extended auto warranty offer 30-day money-back guarantees. You can also get a prorated refund at any time depending on coverage and time spent. The latest data from Experian Automotive shows that 86.6% of new vehicles are purchased with financing, as are 55.3% of used vehicles.

Financing requires a long-term investment, and a service contract is a long-term measure to give a vehicle additional protection. A vehicle maintenance contract is a paid plan that covers expensive auto repairs and takes effect after the new car`s warranty expires. Often referred to as an extended auto warranty, a vehicle maintenance contract can cover both new and used cars, but as the car ages, the likelihood that it will need to be repaired increases. Once you`re ready to purchase a vehicle maintenance contract, it`s time to compare quotes. Whether you`re buying a used car or the manufacturer`s warranty has just expired, check out the options of three of our recommended extended warranty providers: Endurance, Protect My Car and CarShield. However, third-party verification doesn`t take long (we`ve already done this for you in this article), and finding a supplier you like often gives you a lot more flexibility in terms of repairs. Endurance, for example, has a gigantic network of service providers in the US, so it`s much more likely that you`ll be able to get your car repaired at your favorite store while still being covered. Car maintenance contracts cover vehicle repairs that go well beyond the duration and limits of the manufacturer`s current warranties. Most of them are sold at car dealerships at the point of sale, although you can buy different sellers to find the best price. They are available for both new and used vehicles. Protect My Car has been in business for 14 years and has a good reputation with customers. To find out how much a Protect My Car vehicle maintenance contract would cost you, we recommend getting a quote from the company.

If you want to be fully insured, you`ll probably want to get a policy that offers exclusion coverage. This means that the contract covers everything except the parts listed in the contract as exclusions. The standard deductible for vehicle maintenance contracts is $100, although this can vary. Some providers offer $0 deductibles, and some deductibles can be as high as $500. A vehicle maintenance contract is similar to a warranty in that it is an agreement to cover the costs of repairing certain components. Customers pay monthly or in advance. In return, the administrator of the automobile service contract assumes the costs of repairing malfunctions of the mechanical and electrical systems. You may have to pay for covered repairs and be reimbursed by the service company. Ask how long you have to wait to get your money.

The advantage of purchasing a car service contract from a dealership is that you will always receive genuine replacement parts from your manufacturer if any of your auto repairs are covered. On the other hand, however, you are also limited to servicing your vehicle at one of your manufacturer`s authorized service centers. Don`t plan to take your car to your favorite body shop while taking cover. In addition to the exclusions listed above, most vehicle maintenance contracts also come with a number of conditions to maintain coverage, such as: In this article, we`ll go into the details of vehicle maintenance contracts, including what they usually cover, the additional benefits that can be included, and average prices. We will also discuss the pros and cons of purchasing an extended warranty from a manufacturer versus a third-party provider. If you`re not sure about the value of a vehicle maintenance contract, consider getting free, customized quotes from our top suppliers recommended below. Several quotes allow you to effectively compare plans based on their coverage and prices. You don`t need (or want) double coverage.

Before you buy a service contract, compare it to the manufacturer`s warranty you already have. New car warranties typically offer coverage for a specific period of time or miles, whichever comes first. It probably won`t be helpful to have a service contract that starts before the manufacturer`s warranty expires. In addition to reimbursing covered repairs, most vehicle maintenance contracts include a number of benefits for customers. Specific benefits vary from company to company, but typically include: Based on data we obtained from major industry suppliers, the average cost of vehicle maintenance contracts ranges from approximately $1,700 to $4,000 in total. This is a wide range as the cost is highly dependent on individual factors, including: An automobile warranty is a contract to correct certain defects or malfunctions for a certain period of time after the purchase of a car. A manufacturer`s warranty is usually included in the purchase price when you buy a new car, but used cars can also come with some sort of warranty coverage. A vehicle maintenance contract can be taken out with a manufacturer or a third-party supplier. There are pros and cons to both options, so it`s best to consider all aspects before deciding which one best suits your needs. Vehicle maintenance contracts can be worth it, especially for used vehicles, if you`re buying from a reputable brand and making it a point to have some peace of mind.

For some people, simply knowing they have a clearly defined limit on what 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 those customers a few hundred or thousands of dollars. In our research, we have come across a number of complaints from customers who have problems terminating contracts from less reputable companies. It can be difficult to terminate a contract if your provider wants to make it harder to cancel. The following components are excluded from most vehicle maintenance contracts: CARCHEX always puts customer satisfaction first. It ensures that you won`t be associated with a pressure seller when you request a quote. When you call, CARCHEX will put you in touch with someone who can help you understand the plans, which is helpful because contracts, like all legal documents, can be confusing. Vehicle maintenance contracts have an agreed duration, which can range from a few months to more than a decade. Typically, a contract has both a time limit and a mileage limit. For example, a 7-year/100,000-mile vehicle maintenance contract lasts for 7 years or until your vehicle reaches 100,000 miles, whichever comes first. Think of it this way – insurance covers your vehicle and helps cover repair costs in the event of an accident, and a vehicle maintenance contract helps cover the costs of repairing your car in the event of a breakdown. Even the most extensive vehicle maintenance contracts have some exceptions.

Most plans do not cover the following: If you are considering purchasing a vehicle maintenance contract, we recommend getting quotes from multiple suppliers to compare your options. CarShield vehicle maintenance plans are available in all states except California and offer six levels of coverage. CarShield customers can even purchase extended warranty plans for motorcycles and off-road vehicles. If you plan to sell your vehicle shortly after your factory warranty expires, you probably don`t need a vehicle maintenance contract. However, if you are one of the many drivers who intend to keep their vehicle long-term, an extended warranty can help you keep your car in perfect condition. Only a few car maintenance contracts cover all repairs and maintenance. Be wary 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. Understand how complaints are handled.

If your car needs repair or maintenance, some service contracts allow you to choose between multiple authorized service dealers or repair shops. Others require you to use the dealer who sold you the car. Find out if you need prior approval from the contracted supplier for repair or towing services.

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