Every day in cities and towns big and small throughout the country, someone buys a service contract for their newly purchased vehicle. If you've ever bought a car or a truck, you know the drill. You shop around and find something you like, agree upon a price with your salesperson, and then after waiting awhile you get ushered into an office where another salesperson closes the door and has you sign a whole bunch of paperwork. It’s also this person’s job to offer you additional products to help protect your vehicle, so you’ll be likely to return to the dealership when the car requires service.
It may seem obvious, but car dealerships don’t just sell cars. They stay in business by servicing your vehicle, too. They want your continued business after they sell you your car, and honestly, who can blame them? One way they accomplish this is by selling you a service contract.
Do you really need a service contract? That’s up to you and your budget, but in all honesty, when money is tight and your vehicle breaks down, a service contract can be a financial lifesaver. Depending upon the nature of the repair, a service contract could save you hundreds or thousands of dollars. That’s money that would normally come right out of your pocket, or get charged to your credit card if you can’t afford the repair right away. If your repair is covered by the contract, all you have to do is bring the vehicle back to any licensed repair facility to have it fixed up.
The dealership is counting on you to take your vehicle back to them when it needs to be serviced or when something goes wrong. And things do go wrong, all the time, usually when you least expect it and often when you can least afford it. It’s “Murphy’s Law."
Just don’t make things worse by waiting until your vehicle breaks down to read your service contract.
Service contracts come in all shapes and sizes, and what’s covered under one contract is specifically excluded by another. In all likelihood, your dealership has a number of service contracts to choose from. Make sure that the one you choose is the one that works best for you. Is your vehicle new, or is it “pre-owned”? How many miles are on it? What’s its history? Does it have a well-earned reputation for reliability? Do you know? If you don’t know the answers to all of these questions, find out.
When the salesperson offers you a service contract, ask questions. Know what you’re buying. Read the coverage details and understand what you’re getting for your hard-earned money. The last thing your dealership wants is for you to be disappointed by your purchase, and the last thing you want is to find out only after your vehicle breaks down that your service contract doesn't cover that particular problem.
It’s very common for people to buy service contracts and assume that everything on their vehicle is covered. Unfortunately, that’s rarely true. Yes, service contracts cover a lot of components, but not everything. For example, simple maintenance items like brake pads, fluids and windshield wipers are usually not covered. Yet you’d be surprised by the number of people who believe that they are, simply because they haven’t read their contract.
A service contract is a smart investment, and can save you a ton of money during your coverage period if your vehicle suffers a breakdown and requires repair. But it’s also a smart move on your part to read your contract and know your coverage, inside and out.
You’ll be very glad you did!