What to Expect out of an Extended Service Contract
When you purchase a car you will typically be asked whether you want to buy an extended service contract (ESC.) An ESC provides coverage for repairs needed after your manufacturer’s warranty expires. Should you go for that extra peace of mind an extended warranty provides? Or, should you save your money and put it directly toward future repairs. There is no one “right way” to answer this question.
4 Factors to Consider
- Coverage – This category “covers” a lot of ground. First and foremost, compare the coverage offered by the extended warranty with the original manufacturer’s warranty. There is no need to duplicate coverage through an ESC if repair or replacement of an item is already included with the free manufacturer’s warranty. If you do need a replacement, find out whether the parts will be supplied by the manufacturer or a less desirable, after-market source. Be sure the time period or mileage amount covered by the policy is significantly greater than on the original warranty to get the most value (especially if you are purchasing a second-hand vehicle.) Finally, make sure you know exactly what’s covered. Does the ESC provide “bumper to bumper” coverage or just coverage for your car’s power train?
- Fees – When considering an ESC, be sure to read the fine print – every word of it! It’s important to understand exactly what other costs you may incur over the life of your contract. Some services may require deductibles or fees. Note that there may be different costs involved depending on the service being provided.
- Claims – If you have a claim, find out who will handle it. Does the dealer take care of the repairs? Will you be referred to a third party? Be sure you understand whether claims are valid if your problem occurs out-of-state, during non-business hours, or if you have relocated.
- Maintenance – To get the most out of your car—and your manufacturer’s warranty—you need to comply with your car’s maintenance requirements. As a rule, ESCs don’t cover maintenance services, such as oil changes, brake repairs, filter replacements, and fluid refills. In fact, some extended warranties may even become voided if you don’t take proper care of your vehicle.
Be sure to speak with your dealer’s sales rep or finance manager with questions, or contact the policy provider directly. Understanding the detail is the key to getting maximum value!
Can I Add an ESC After I Have Already Made a Purchase?
If you did not get an extended service contract but have changed your mind, you can always add it if you refinance your vehicle down the road! Refinancing can be a great option once you have been making multiple payments and when your credit score is around 600 or higher. If you feel like this describes you, Get Started Now to see what you may qualify for now! Plus, your rep can walk you through extended service contracts and help you decide what’s right for you.