Auto Service Contracts: What You Need to Know

By: Cat Tobin

During the car buying process, your dealer may try to talk you
into additional extras and services. One, in particular, is an
auto service contract. Though they aren't necessarily required,
many car buyers feel enticed into buying one in order to protect
themselves against unforeseen circumstances, such as expensive
car repairs.

In general, auto service contracts pledge that the responsible
agency, usually the car dealer, will provide the necessary
services or repairs that the contract holder is entitled to.

When it comes time to make a decision about an auto service
contract, these are the factors you need to consider:

1. Be aware of the terms and conditions stipulated in the auto
service contract. Make sure you're clear as to what services and
repairs are included, and which are not.

2. You should know exactly who will be performing the required
services. Will the car dealership be making the repairs or
performing all services onsite? Or, do they outsource it to a
third party?

3. You should find out the reputation of the company repairing
or servicing your vehicle. How long have they been in business?
Have any complaints been filed against them?

Finally, the most important thing to consider is the cost of the
auto service contract. Will it be money well spent?

If it's a brand new car, or one still under the manufacturer's
warranty, is the added expense really economical?

Would it be cheaper to pay for any mechanical problems yourself
should they come up before the warranty expires? Or, would it be
cheaper to have regular maintenance performed by your regular
mechanic?

These are important factors that should be taken into
consideration before purchasing any auto service contract.

About the author:
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