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Car Service Contracts: Full Service Or Foolish Service
By Gregory Ashton
Upon purchasing a car, one may also be required to avail of an
auto service contract to do away with untimely and expensive
repairs. Before agreeing into any of it, one should first
completely get a grip of both the contract's terms and the one
responsible for supplying the coverage.
The following will help in the understanding of the use of a car
service contract and what should be considered before getting
one.
Car Service Contract mistaken as a warranty
A car service contract should not be mistaken as a warranty as
made understood by federal law even if it is sometimes called
"extended warranty". Similar to a warranty, a car service
contract promises to provide or pay for particular services or
repairs.
A warranty goes together with a new automobile and comes
together with the original price of the car while an car service
contract is sold separately and can be arranged for at anytime.
Things to consider in a car service contract:
o Duplication of car service contract with whichever warranty
treatment
Before buying any car service contract, try comparing it with
the manufacturer's warranty first. This will avoid shelling out
for coverage that may already be provided by the warranty.
o Accountability of car service contract
Check on who is accountable in performing or paying for
reparations within the terms of the contract whether it is the
dealership, the manufacturer, or an independent company.
A lot of these car service contracts that dealers sell are
controlled by companies that are independent or administrators,
as they are called. They function as adjusters of claims who
authorize payment claims to dealers under service contract.
Therefore, any dispute on claims should be discussed or settled
with the supervisor.
Once the administrator stops his business, it is a possibility
that the dealership may be compelling to execute the terms of
the contract. It is also possible that if the dealer runs out of
business, the administrator may be the one expected to complete
the contract's terms.
It is imperative to know the credibility of the dealer and/or
the administrator. Inquire about their references and verify
them. The local or state office for consumer protection, local
automobile dealers associations, Department of Motor Vehicles,
local Better Business Bureau are good sources of references and
public information.
It is also important to know the length of time the dealer or
administrator have had in the business. It is also vital to
determine if the dealer or administrator has the funding to
sustain their contractual responsibilities.
Know if the car service contract has an insurance company that
has underwritten it. This is mandatory in some states. If it is
so, verify the company's solvency with the State Insurance
Commission and check for complaints that might have been filed
against it.
o Prices of Auto Service Contracts
The cost of auto service contracts are usually known through
observing the vehicle's model, make, condition whether it is new
or used, the coverage, and the contract's length. The price
ranges from hundreds of dollars to over a thousand.
Over and above the initial charge may be an additional fee to
pay known as deductible, every time the car is repaired or
serviced. In some auto service contracts, one may pay just one
charge for each visit for all the required restoration, no
matter how many. On the other hand, other contracts demand the
client to pay a deductible for each unrelated repair.
Transfer of cancelling fees may also be asked to be paid once
the client decides to sell the car or wishes to finish the
contract. Contracts usually decrease the payment for towing
services and other related car rental expenses.
o Coverage
Only a few car service contracts treat all types of repair.
Typical repairs for parts such as clutches and brakes are
usually not coming with the service contracts. If some items are
not listed in the service contract, assume that it is not
included. An example of this is if the contract indicates
coverage on the "drive train" only, it will surely not pay for
the alternator which is a component of the electrical system.
Beware of absolute rules that reject or deny coverage for any
reason. An example of this is if a part that is covered is
damaged by a part that is not covered, no claim will be given.
One my not have full protection even on parts that are covered
in the contract. This is possible due to some companies using a
"depreciation factor" in calculating the coverage. This
primarily means that the contract covers only partial repair or
replacement costs if they take into consideration your vehicle's
mileage for instance.
About the author:
Gregory Ashton, your resident automobile enthusiast, bringing to
you over 20 years of vehicular passion, and expertise; presents
for your approval his insider secrets on selecting, buying, and
maintianing the car that is ideal for you.
http://www.best-car-buying-tips.com
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Car Service Contracts: Full Service Or Foolish Service
Upon purchasing a car, one may also be required to avail of an auto service contract to do away with untimely and expensive repairs.
Before agreeing into any of it, one should first completely get a grip of both the contract's terms and the one responsible for supplying the coverage.
The following will help in the understanding of the use of a car service contract and what should be considered before getting one. more...
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