What You Need to Know About Vehicle Service Contracts

What You Need to Know About Vehicle Service Contracts

If you own an automobile, a vehicle service contract will help you deal with unexpected and costly repairs. But, before you signwith vehicle service contract providers, here are some things you need to know about it.

What Is a Vehicle Service Contract?

It’s an agreement where a company provides or pays forserviceswhen a contract holder’s vehicle experiences a breakdown or failure. It covers mechanic-related labor, like engine diagnoses and repairs. Parts replacement and itsaccompanying costs are often included as well.

While the process varies depending on the company, it usually goes like this:

  1. Your car breaks down.
  2. You contact your provider’s claims center and report what happened.
  3. They’ll provide a list of facilities they’re partnered with.
  4. You take your car to a repair facility of your choice from their list.
  5. An Automotive Service Excellence (ASE) certified mechanic will work on your car.
  6. Your provider will ensure your vehicle is repaired and will pay the service center that completed the job.

Keep in mind that only the labor costs and vehicle components included in the terms are covered. If the service is beyond what is mentioned in the contract, you’ll either get a deductible or have to pay a fee.

Its Difference with Warranties

Most people think service contracts and warranties are the same, but there are clear distinctions between the two. Here are the qualities of the former:

They’re not warranties.While these contracts are often called “extended warranties,” the Federal Trade Commission (FTC) states that they’re not required when purchasing a new car. They have a separate price, and they’re arranged at a later time, even if your dealer says otherwise.

They start when the warranties end.The benefits ofa service contract begin after the initial written guarantee expires. It can be either once the 3-year coverage ends or after the vehicle has reached 36,000 miles. This prevents the terms from overlapping.

They can be transferred to another car.Unlike warranties, which are exclusively for the indicated vehicle, service contracts are transferrable. This works even if your car is leased, a rental, or if you’re planning to sell it in the future.

An extended vehicle service contractcan help with unexpected repairs or replacement by taking care ofthe parts and professional labor. While it may seem similar to warranties, they have differences according to federal law. If you’re interested in learning more, you can talk to vehicle service contract administrators.

Leave a Reply

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


*