Service contracts and warranties are not the same thing, although most people do call them an “extended warranty”. People purchase these types of contracts because they can help them save money should their vehicle require repairs. The newer the vehicle, the more high-tech its parts are, and the more it costs to repair them. As such, a vehicle service contract is a form of insurance.
Which Contract Is Best?
There are numerous companies out there that offer vehicle service contracts. Some of those, like Accelerated Service International, have set the standard for everybody else. They perfectly follow all the necessary insurance regulations, which state that:
- They always have enough financial reserves to pay claims.
- They base the fees for their contract on the claims they expect to receive.
- They are approved by the state insurance office for their contract fees and premiums.
Any company that does not guarantee those three things should be avoided.
When choosing a contract, the first thing you have to consider is which parts are covered. If you have ever seen a vehicle service contract, you may have been impressed by the long list of parts that the agreement covers. Hence, it is best to look at what isn’t covered. This list is usually a lot shorter and tends to include maintenance items, the battery, belts, filters, and brakes. Those are not expensive repairs, so it is fine for them not to be included, but do look into it. However, repairing a BMW or other luxury car, can be expensive. Parts and labor in these types of cars can be 3-4 times the cost of a standard car, so if you have one of these machines, you’ll definitely want to know what to expect out of your contract.
If you do take out a vehicle service contract, you have to make sure that you stick to your end of the agreement. It is a type of insurance, after all, and with all forms of insurance, you must play by the provider’s rules. This means that you have to be able to document that you haven’t missed any factory maintenance, and that you have had your vehicle serviced regularly.
You also need to make sure that, should you have a repair completed, only quality parts are used. Similarly, you need to ensure that your vehicle will be repaired at a high quality facility. Unfortunately, there have been some reports that vehicles would only be repaired using used parts, in facilities without the necessary registrations, by untrained operatives.
Finding a Good Vehicle Service Provider
For some people, these difficulties are enough to make them not take out a vehicle service contract. However, this would be a poor decision to make, just as it is not recommended for you to not take out insurance on your property. Rather, it is about being realistic and exerting due diligence and common sense in terms of finding the service provider that is right for you. As previously stated, ASI have set the standard in terms of what you can expect from such a company, and you certain should compare your options to those offered by them.
If you purchase a vehicle, the dealer may offer you a vehicle service contract. You are under no obligation to take it, or, if you want it, to take it out through them. Spend some time doing your research so that you find the best option out there.