Key Factors to Consider Before Purchasing Extended Service Contracts

Key Factors to Consider Before Purchasing Extended Service Contracts


Car owners often need to face unexpected auto repairs, and this can incur huge costs. This is why experts in the automobile industry recommend car owners to enter into service contracts with the manufacturer. These service contracts are like maintenance agreements to cover the costs of unforeseen repairs of the vehicle that has been purchased. They have specific terms and conditions that the car owner needs to read carefully and understand before signing up for them.

Extended service contracts – What should car owners consider before opting for these plans?

Car manufacturers give their customers warranties that are free from charge; however, when it comes to extended service contracts, they need to be purchased from them at an extra cost. For first-time car buyers, they need to understand what these service contracts entail and how they can benefit them in the future. Experts in the automobile industry caution car owners to be careful when it comes to taking such service contracts. Research should be conducted in the following areas-

1 Scrutinize the terms and conditions of the service contract- You should do some shopping and compare the different service contracts that are offered by dealers, manufacturers, and others. Know what you need as there is no point paying for a service that you will not use in the future. For doubts and concerns, consult professionals in the field to guide you.

2 Service Contracts are optional and not mandatory- When you are going in for service contracts, there is no obligation for you to take one. There are times when your manufacturer might insist you buy an extended service contract for financing; however, lenders generally do not need one. If this is the case, consult your lender first and clarify whether you need an extended service contract for finance.

3 Check the provisions of the contract and compare it with the coverage of the warranty- Every new car comes with a manufacturer warranty that gives you free service for the first three years or 36,000 miles whichever is higher. You generally need to enter into an extended service contract when your car warranty ends. Therefore, compare the service contract with the warranty that is being offered to you by the manufacturer before you make a purchase.

4 What is the duration of the extended service contract- You should be aware of how long the service contract will last? If the duration supersedes the time, you plan to own the car, ask the manufacturer as to whether you can transfer it or not if you can what is the fee you need to incur or if there is another service contract with a shorter duration? These are some of the key questions to ask the manufacturer when you have decided to choose a service contract for your vehicle.

Therefore, when it comes to extended service contracts, ensure you keep the above factors in mind. Do your homework well and, in case of doubts, get them clarified with professionals. Research well and ensure you invest in the right contract that gives you value for money for a long time!

Leave a Reply

Your email address will not be published. Required fields are marked *