3 Critical Aspects to Consider Before Buying a Vehicle Service Contract

Posted on: 23 February 2018

As newer car models with newer features and capabilities get introduced into the auto market, it is increasingly becoming difficult for new car buyers to know exactly what type of repairs to expect. When you are out shopping for a new car to buy, the sales representative at the dealership may offer to sell a vehicle service contract to you. A vehicle service contract is an optional coverage meant to protect car owners against pricey car repairs that may be needed at some point in the future. 

Before paying for an auto service contract, you should first determine if it is really worth the money. Here are a number of important aspects to consider before reaching a final decision on whether or not to purchase the coverage.

What repairs are covered? 

Before spending you hard-earned cash on an auto service contract, you should know what repairs are covered. This is because some or most of the repairs covered by the contract may be a replication of what is already covered under your manufacturer's warranty. If most of the repairs included in your contract are comprehensively covered under your new car warranty, you will be getting a raw deal. But if most of the repairs covered by the contract aren't covered under warranty, then purchasing the extra protection may make perfect sense. 

Who does the repair work?

For the most part, the repairs covered under your vehicle service contract are to be performed at your preferred repair facility with the mechanic you want as long as the auto mechanics or technicians at the facility are fully certified. However, the vehicle manufacturer or independent service company may insist that you take the car to specific repair facilities they partner with. Given that policies on where repairs are to be done vary throughout the industry, it is best to determine which arrangement works best for you. 

What's the payment plan?

When it comes to payment of car repair bills, auto service contracts generally provide two options: the service company pays the repair facility directly or, the car owner foots the bill themselves and then ask for a reimbursement from the service company. If you would like to avoid paying for repair costs out of pocket, you will be better off letting your service company deal with your car repairer directly. 

Discussing the above issues with the car salesperson before buying a vehicle service contract can help you make a better-informed decision on whether or not to get your car the extra coverage.