If you`re in the market for a new car, you`ve probably heard the term “service contract” mentioned in relation to your purchase. But what exactly is a service contract, and how does it differ from a warranty?
Put simply, a service contract is a contract between you and the dealer that covers the cost of certain repairs and maintenance for a set period of time (often called a “term”). These contracts can be offered by the manufacturer or by third-party companies, and they can be customized to fit your needs and budget.
So, what does a service contract actually cover? That depends on the specific contract you choose, but common items include things like oil changes, brake repairs, and battery replacements. Some contracts might also cover things like roadside assistance or rental car reimbursement in case your car needs to be in the shop for an extended period of time.
It`s important to note that a service contract is different from a warranty. A warranty is included in the price of your car and covers certain repairs and replacements for a set period of time or mileage. A service contract, on the other hand, is an additional purchase that extends beyond the original warranty period.
When considering a service contract, it`s important to do your research and make sure you`re getting a good deal. Some dealers might try to bundle the cost of the service contract into your car loan, which means you`ll end up paying interest on it over time. You might also find that the cost of the contract isn`t worth it compared to the cost of maintenance and repairs you`re likely to need.
If you do decide to purchase a service contract, be sure to read the fine print and understand what is and isn`t covered. Make note of any specific conditions or exclusions and keep a copy of the contract for your records.
Overall, a service contract can be a useful tool for protecting your investment in a new car and avoiding unexpected repair costs. Just be sure to do your due diligence and understand the terms before signing on the dotted line.