Five Things You Need to Know About Vehicle Service Contracts
Posted on September 25, 2017 by Jeff Greenwald

What You Need to Know About Vehicle Service Contracts

Never go into any contract without doing your research. Here are the 5 most important things you need to know about vehicle service contracts.

Buying a vehicle is a major purchase for most people. There's so much to consider. 

Generally, when you buy a vehicle, the manufacturer offers standard auto coverage for maintenance and repairs. This basic warranty typically covers poor workmanship or defective parts and is good for a certain amount of time or miles. 

But, if you are planning to keep your vehicle for a long time or put lots of miles on it, you may need to purchase vehicle service contracts for some extra coverage.

Vehicle Service Contracts

A vehicle service contract or extended warranty is designed to cover those needed repairs and services after the manufacturer's warranty has expired. 

Many people think you can only buy this type of warranty from the vehicle manufacturer, but that's not the case. You can also purchase an extended auto warranty from auto dealers and vehicle service contract providers.

You can buy a vehicle service contract for a new or used vehicle. Just beware of a dealer who tries to include an extended warranty without your consent. Read the contract carefully before signing anything.

Now let's head over to 5 things you need to know about vehicle service contracts:

Know Who Backs the Contract

Make sure you know who pays for and performs any repairs under the contract. This could be the auto dealer, the manufacturer, or an independent provider.

You also need to know whether or not the contract is underwritten and by whom. In some states, service contracts are required to be backed by insurance companies. In this case, be sure to contact the state insurance commission to check the legitimacy of the company.

Know the Costs Involved

Vehicle service contract costs are normally based on contract length, make and model, coverage, and condition. Up-front costs can vary by thousands of dollars. You may also be required to pay a deductible. This could be based per visit or per repair.   

You should check to see how much is provided for rental car expenses and towing. And, there could be cancellation fees if you end your contract early.

Know How Claims Are Handled 

What happens when your car breaks down? You need to know if you can choose your own repair center or not. You might be required to use the original dealer for repairs.

Be sure to know if you are covered if your car breaks down while you are out of town. Some auto service contracts will only cover repairs in certain areas.

Know What Is Covered 

The majority of auto service contracts will not cover all repairs. Look for the repairs listed, and if it's not there, it won't be covered.

Read the fine print, and look out for absolute exclusions which deny coverage. If your contract states that only mechanical breakdowns are covered, then repairs needed due to wear and tear may be denied.

Know Your Responsibilities

You may be required to follow recommended routine maintenance guidelines. And, your contract could be canceled if you fail to comply. Always keep your receipts and repair records.

Be sure to understand if there is a stipulation against performing repairs yourself. And, you should know your options for who can perform routine maintenance. 

Find the Right Vehicle Service Contracts Provider

We know buying a new or used vehicle is a big decision. You want a warranty that provides great coverage for an affordable price. is here to help. We would love to answer any questions you may have, so be sure to get in touch with us.

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