When is a vehicle service contract not worth it?

Vehicle service contracts can be great investments in the well-being of your automobile. However, it is important to also consider times when they are not a worthwhile investment. Like any type of extended warranty, certain factors come into play when deciding to purchase a vehicle service contract.

How long will you keep the vehicle and how old is it?

A vehicle service contract is a great investment for a car you intend to take care of for more than a year or two. But if you like to trade in your car every year, a vehicle service contract may not be a worthwhile investment. Also, consider how old your car is. If it is a brand new car and you will be trading it in within two years, you may already have an extended warranty on the car that will cover most repairs.

Does it add to the existing warranty?

There is no reason to sign up for a vehicle service contract if your new car comes with a warranty that offers the exact same coverage. However, it can be a good idea if it offers additional protection that is not covered by the manufacturer’s warranty. Check the terms of the vehicle service contract and compare them to the terms of your car’s manufacturer’s warranty first.

Can you follow the strict maintenance schedule?

Often, a vehicle service contract will insist that you follow the car’s maintenance schedule for things such as tire rotations and oil changes. If you do not follow this schedule strictly, your coverage may be denied. If you do not think you can adhere to the schedule, a vehicle service contract may not only be a bad idea – it may not be an option at all.

Where can you have repairs done?

There are vehicle service contracts that allow you to go to any repair shop, and there are others that restrict you to certain shops. Make sure you pay attention to this portion of the contract. If you are planning on taking this vehicle on a road trip, you may want to make sure you can take it to any shop that you can get to, or you may be out of luck should something happen.

David Cunningham
Expert Author in Extended Warranties