Questions to Ask When Buying an Auto Service Contract

No matter what product or service you are exchanging your money for, it is always wise to be an informed consumer. While you may never know as much about an auto service contract as the provider offering it, you can prevent many issues that arise when shopping for, buying, and using such an agreement, simply by asking questions.

Auto Service Contract Buying Guide

It may be best to start with understanding the difference between a warranty and an auto service contract. While they may appear to be the same, the truth is these two items have significant differences. When you purchase a new vehicle, for example, you will have a manufacturer’s warranty that will cover your car for a set number of years or a specific number of miles. However, an auto service contract is an optional agreement that will pay for certain covered repairs based on the terms of the contract.

Contact us at 800-293-5048 or use our online form to learn more about vehicle protection plans and to find one that is right for you.

Auto Service Contracts: Understanding the Details

There are several details to consider when deciding whether an auto service contract is right for you. First and foremost, you should understand the terms of a contract including what is and isn’t covered, the length of the contract, and any other limitations or requirements.

Auto Service Contract Questions to Ask

Here are a few key items to understand:

  • Know who is backing the service contract. Understand from the beginning who will do the repair work and who will pay for it. Is there a service contract administrator? If dealer or administrator goes out of business, what is the status of your agreement?
  • Know the costs. Make sure you know what your final cost will be for the auto service contract, including deductible. Does the deductible apply per repair or per visit?
  • Know what is covered. What does the auto service contract cover? These agreements are very specific about what is not covered and what is covered. Normal wear and tear may not be included.
  • Know your responsibilities. You may have to keep records showing you have followed the manufacturer’s routine maintenance recommendations in order to keep the contract valid. Additionally, sometimes the auto service contract specifies that only the dealer who sold you the car is authorized to service the car.
  • Know if the contract is transferrable. If you have an auto service contract that is in force when decided to sell the vehicle, ask if the agreement can be transferred. This may help increase the value of your car to prospective buyers.

In addition to these important details, you should clearly understand where you need to take the vehicle to have work performed under the vehicle service contract. Do you have a choice? Can you have repairs made while on a trip? Is there a geographical limit to where you are covered?

One key financial item that many people fail to understand involves the actual exchange of money for repairs. Does the auto service contract provide for direct payment to dealer or repair shop? Do you have to pay and then wait for reimbursement? Keep in mind that a service contract can require you to perform regular, scheduled maintenance in order for the agreement to be valid. You should keep all receipts and other documents to prove this if necessary.

Learn More About Auto Service Contracts

The overall key to success with any auto service contract is to know what your responsibilities are and to understand what the dealer or repair shop responsibilities are. By being informed, you can make a wise investment and protect yourself from costly repair bills. Call 800-293-5048 or contact us online to learn more about our vehicle protection plans and which option is right for you.

Protect Yourself from Auto Warranty Scams

Detecting Auto Warranty Scams

While vehicle service contracts can be a beneficial and wise investment to protect you from unexpected auto repair costs, some companies aggressively offer an auto warranty without fully explaining what is covered. Others go as far as to misrepresent the contract and what is covered. In these cases, the buyer often ends up financially hurt by such transactions.

To learn more about vehicle service contracts and what you can to do ensure that you make a smart financial decision, contact us at 800-293-5048 or use our online form to learn more about how a typical auto warranty compares to our vehicle protection plans.

Auto Warranty Scams: Be Informed and Skeptical

Reputable companies exist in the extended auto warranty field. Unfortunately, people are sometimes taken in by an offer that comes in the mail or by a phone call. On the phone call, the seller may be aggressive or talk very quickly, not giving the potential buyer time to ask questions or think the process out. It is in these cases that buyers need to protect themselves from aggressive auto warranty companies.

Auto Warranty Companies to Avoid

While most auto warranty providers rarely, if ever, represent a specific car dealer or a manufacturer, they may state this in a letter or during a phone call. Watch for these phrases, and others that are included in mailed letters and then never mentioned in the sales process:

  • Vehicle Recall
  • Vehicle Notification
  • Notice of Interruption

These and other phrases using the words auto warranty, final, interrupted service, etc. are generally a good indication that there is more to the story. While companies may represent their product or service as an extended auto warranty. What they are really offering is a vehicle service contract for which you pay a fee to receive certain coverages. Auto warranties are offered by a vehicle manufacturer or an authorized dealer only, not a third party.

What is an Auto Warranty

Additionally, these shady “auto warranty” companies may conduct deceitful business practices, such as collecting money from a number of people only to go out of business in a short time, leaving the purchaser with little or no recourse. Even more, some of these companies have no intention of ever providing any vehicle service agreement or contract. They instead use your personal information to commit other fraud. Avoid giving these companies financial information or money up front without doing your research to know who you are dealing with.

Protect Yourself When Buying an Auto Service Contract

In order to protect yourself when purchasing a vehicle service contract, do your research to find out if the company you are working with is reputable and trustworthy. Know the details about the vehicle service agreement (which is not an auto warranty), especially who will pay for repairs or other service. Many service contracts may be handled by a third-party administrator, make sure you know who this administrator is and ensure that they are backed by reliable sources.

Additionally, some states require that the service contract is underwritten (backed) by an insurance company. You can find information about these insurance companies by contacting the insurance commission in your state. The company behind any vehicle service contract should have adequate financial reserves, should offer services at a reasonable price, and be in good standing with the state commission.

At American Automotive Service Solutions, we believe in helping customers make informed decisions when it comes to purchasing vehicle service contracts. We do not use shady or dishonest practices seen with some auto warranty providers. Call us at 800-293-5048 to learn more about our vehicle protection plans and if they are the right choice for you.