What Is a Service Contract When Buying a Vehicle

It`s important to understand that if the used vehicle you`re buying has existing manufacturer`s warranties (e.g.B the vehicle you`re buying has 25,000 miles and the manufacturer`s warranty covers up to 36,000 miles), then the vehicle`s service contract includes that existing warranty (just like what we discussed above regarding new cars). To clarify: This means that the service contract does not extend the manufacturer`s warranty, but exists in conjunction with the manufacturer`s warranty. Incorporate it into your car payments: Many drivers choose to purchase contracts from their local dealership when they buy their new vehicle. Although you will find it cheaper online if you choose the merchant`s route, you will pay for it separately. If you finance your vehicle, the dealer will charge you interest, adding the cost to your policy, you will have to pay more interest in the long run. That said, even parts that appear to be covered by a contract won`t always be covered as you hoped. Many contracts explicitly state that they only apply to mechanical failures and exclude repairs due to wear. This means that even if one of your covered components breaks for a reason other than that stated in the contract, you will have to pay the repair invoice. 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. You can`t use it, but if an important component of your car breaks and you don`t have a blanket, you can easily start regretting your decision not to take one. However, keep in mind that not all vehicle maintenance contracts are created equal, so be sure to read our guide to the best extended car warranties in case you haven`t already. We`ve discussed the different reasons why every driver should protect their car with a vehicle service contract and what exactly they are, but we`ve never gone too far when it comes to do`s and don`ts when it comes to purchasing. But after hearing customer testimonials about some anonymous companies and their terrible experiences with them, we felt it was necessary. 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. The term “extended warranty” is colloquially used by third-party companies, but does not technically exist. A warranty is something that comes with the purchase or lease of the vehicle.

It can be given by the manufacturer (most often) or by the distributor, but this is a sales incident. Warranties are express (the vehicle is a written statement, since this vehicle has a new transmission) or implied (warranty of merchantability or fitness for a particular purpose, e.B. if the dealer knows that the customer will use it to get around). If your existing vehicle is already covered by the manufacturer`s warranty, this is a good reason not to purchase a vehicle maintenance contract. As already mentioned, it`s all about your personal willingness to take risks at this point. Vehicle maintenance contracts cover repairs resulting from mechanical failures, but do not cover aesthetic problems, problems due to poor maintenance or most cases of wear. 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. .