How to Purchase a Vehicle Service Contract

Vehicles service contracts offer peace of mind and protection from large vehicle repair bills.

As such, you want to make sure that the vehicle service contract you purchase will actually cover the repairs you expect it to cover and do what you want it to do.

Here are some tips for purchasing a vehicle service contract:

Make a list of what you want covered

Consider your vehicle and which parts you would like to be covered. Some people may not care about having their power windows included in coverage but might believe that having their transmission covered is very important. Think about those things on your vehicle that you are confident in, which may not need coverage, and those things that you may want to protect by the service contract.

While you are making this list, consider what you are willing to pay. Try to have a decent number in your head with respect to how large of a contract you are willing to purchase. Though a vehicle service contract can save you a lot of money in the long run, it is an investment like any other investment. Make sure you know and understand what you’re willing to pay for. Also, think about how long you want to keep your vehicle. This will help you decide if you need more or less extensive coverage. The more extensive the coverage and for a longer period, the more the service contract will cost.

Find vehicle service contract providers

When searching for a contract provider, do not simply take the advice of one dealership or of a phone call or mailer you received. Instead, do your due diligence in finding a reputable company to work with. Ask your repair shop if they have dealt with any companies and which they find easiest to work with. Ask your friends and family members who have service contracts if they are happy with their provider and find out who that is.

Don’t simply take the first offer that comes along. Make sure you are finding what you want from a good company….even if it is not the lowest price.

Research the companies you find

Once you have taken the advice into consideration and compiled a list of potential companies, do your research on those specific companies. The Better Business Bureau is a great place to start your research. Find out how these companies are rated and how well they stack up against each other.

Remember that the companies that sell service contracts are not necessarily very involved in the process after the sale. In many cases, they are reselling contracts offered by administrators. As such, it's often more important to find out who the administrator is for your vehicle service contract, and do your homework on that company as well.

Taking the time to do your research can help you avoid offers from companies that claim to offer "extended warranties "at low prices.

Ask a lot of questions

Once you have decided on a company and begin talking about contracts, make sure to ask a lot of questions. Fully understanding your vehicle service contract is crucial to gaining peace of mind and properly utilizing your service agreement.

Most vehicle service contracts not only include coverage, but require the owner of the vehicle to keep up proper maintenance on the vehicle as well as maintain detailed records. In some cases, failing to maintain your vehicle can void your entire contract.

Because of elements like this, it is very important to understand the ins and outs of your contract down to every detail.

In many ways, the process is no different from the process you should undertake when buying car insurance, a new refrigerator, home insurance or any other purchase. Do your research, ask a lot of questions and read the fine print. If you do those three things, you'll likely be in very good shape.