An extended service contract can be purchased at the time you buy your vehicle; it is also possible to purchase one in the future. The extended service contract obligates that the warranty company will pay for repairs covered by the extended service contract for a specific period of time. Your vehicle is a major purchase and investment. By purchasing an extended service contract you are protecting yourself from the unexpected cost of mechanical breakdowns that can or will occur. Many times one major repair will often cost more than the total amount of the extended service contract. This way you can have peace of mind and save money on your investment. Your vehicle will always be in the best mechanical condition.
If you're asking yourself why you should purchase an extended service contract, here are some good reasons:
• It allows for necessary repairs to be made
• Most include a free rental car if your car is in the shop for covered repairs
• Protects you against the rising costs of repairs
• Added resale value- most contracts are transferable upon sale
• Peace of mind
Here are some great questions to ask about extended service contracts:
What extent is your vehicle already under warranty? Is the coverage enough for your anticipated time of ownership?
• If the car you've just bought is new, take a close look at its factory warranty before making an extended service contract decision.
• If you plan on keeping the car long after the factory warranty expires, an extended service contract is worth considering.
• If the car you're purchasing is used, it is important to find out if there is warranty coverage from the dealership before purchasing an extended service contract (coverage periods may range from as little as a month to up to a year, or more).
How reliable is the car model's record that you're purchasing?
• This gives you an idea of what the bills for repairing will be. This is important for when you are deciding what you want in your extended service contract.
Who is behind the warranty that you're considering?
• An extended service contract may be backed by an independent company or by the covered vehicle's manufacturer.
• By knowing the providers underwriting, your policy will give you insight into the strengths and weaknesses of the contract you're considering.
Is there a deductible?
• Make sure that you fully investigate an extended service contract's deductible before signing on the dotted line. Consider the amount and whether it's "per visit" or "per repair."
• With a "per visit" deductible, each visit to the shop results in a fixed amount, regardless of how many parts are repaired.
• A "per repair" deductible applies to each serviced part. What sounds like a minor difference may have a major impact on your wallet.
What exactly is covered in your extended service contract?
- Does the extended service contract cover breakdown as well as wear and tear? Under a "breakdown" warranty, coverage is extended only to parts that break.
- There are some "entry-level" contracts that don't cover antilock brakes (ABS), so if your vehicle has this feature, you should consider upgrading to this level.
- Before committing to an extended service contract, take the time to fully explore the ins and outs of its coverage implications. The distinctions between the various plans might seem all alike but can be important in the end.
Get a great deal on a new car.