A Vehicle Service Contract Explained

It isn’t a secret for anyone that when it comes to purchasing a car, the auto warranty is among essential factors. It allows you to drive your vehicle confidently, without thinking about repair costs, if something unexpected happens to your car.  Sometimes the dealer may offer you the option of obtaining a vehicle service contract. Are you confused because you have no idea what is ‘’a vehicle service contract’’?  Well, you shouldn’t worry about it. If you keep on reading this article, we will explain everything you need to know about a vehicle service contract.

What is a vehicle service contract?

In fact, a vehicle service contract aims to provide car owners’ protection against the vehicles’ repair expenses.  Very frequently consumers choose to purchase vehicle service contracts when the auto manufacturer’s warranty expires.  Sometimes repairs covered by vehicle service contracts include labor, sales tax, parts, etc. It goes without saying that the coverage offered by a vehicle service contract is different. The truth is that it depends on the person’s vehicle service agreement.

What are the advantages of vehicle service contracts?

Consumers purchase a vehicle service contract because it offers them considerable benefits.  Most probably the most vital advantage is that a car owner can have a peace of mind. That is to say, you can take a breath with ease and forget about repair costs. The coverage offered by vehicle service contracts gives you the opportunity of saving financial means if the vehicle’s performance ‘’disappoints’’ you.  The automobile is a vital investment for any person. Typically, you invest not only your savings, but your energy and time as well to purchase your dream car. Thus, it is logical that consumers will do their best to protect their investment against high repair costs. Vehicle service contracts are a quite affordable option taking into account the high costs of labor. Furthermore, the parts are also quite costly to fix.

What do usually vehicle service contracts cover?

As an informed car owner, you should keep in mind that vehicle service contracts are different. This means that the coverage that they offer consumers is not the same. At this point, a worthy piece of advice is this one.  Explore the terms and conditions of the vehicle service agreement in detail. It will help you avoid, ‘’ pleasant surprises’’ in the future. At times, purchasers read thoroughly this agreement, but fail to understand everything. To be more concrete, they need certain clarification, but don’t ask for clarification. NEVER do this. Always feel free to ask all the questions that you have in mind. Only after you have a clear idea of what’s covered, you can purchase a vehicle service contract.

There is also another issue that deserves your attention. Among the basic requirements of these contracts is that the car owner should make the necessary payments. In addition to that, you have to do the main maintenance on your vehicle. It is also true that very few service contracts offer the coverage of the vehicle’s all repairs. For example, in some cases, a vehicle service contract may not include brakes and clutches. At times, a car owner may find out that the coverage refers to mechanical breakdowns only. In this case, what to do if a car has a problem caused by the wear and tear? Unfortunately, you have to use your financial means to fix this issue.

Does a consumer have to purchase a vehicle service contract?

Of course no. You don’t have to purchase an auto service contract when buying a vehicle. It is also not a requirement for a car buyer to purchase vehicle service contracts to qualify for financing.  However, very often consumers may come across this situation. A car dealer attempts to include an auto service contract in a car buyer’s loan.  Sadly, the consumer has no idea of this. Watch out, as you are dealing with a dishonest and unethical dealer.  Explore the loan agreement carefully. Whenever you notice that there is a fee for the vehicle service contract, don’t hesitate to take it out.

Who is backing vehicle service contracts?

It is vital for any car buyer to find out information related to the company, who backs the contract. The reality is that vehicle service contracts may be covered by dealers, manufacturers, as well as independent companies. Administrators are considered to be the companies that usually handle the majority of the service contracts.  This means that in case of a dispute concerning the payment of the claim, you should turn to an administrator.

Are you currently having problems with your vehicle service contract? Well, in this situation the first step is attempting to resolve the dispute with the provider.  If you fail to achieve your goal, turn to your state Attorney  General, local protection agency or state insurance commission. It is also a good piece of advice to file a complaint with the FTC.