Auto Service Contract: Important Things To Remember

By Author: Marty Vergel Baes
Total Articles: 413
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Every car buyer should be aware of the so called “auto service contract” or better known as the “extended warranty.” This is because the contract could cause them to spend additional amounts apart from those that are indicated on the new car prices sticker. Besides this, there are other aspects of the auto service contract that you should fully understand in case you are planning to buy a car and t his would only be possible by doing the needed car research. If you don’t have the needed time to do the research, try to remember some of the things provided below.

1. The purpose of the contract

The primary purpose of the auto service contract is to provide car buyers with options on how to minimize their personal expenses in the event that the cars that they have purchased would experience any damage a few months after buying these. This usually covers the coverage not included on the warranty provided by the car maker. The contract is also intended to allow the provider to ...
... earn profits since this is sold in different amounts.

Given this, getting an auto service contract might not be a good decision on your end most especially when the coverage included on the auto service contract is already covered by the car maker’s warranty. If this would be the case, you should avoid getting one since you can still use the money to pay for the payments involved in the car buying process, most especially when you purchased the car by using one of the auto loans offered by lenders.

2. Who handles the claims

The auto service contract claims are handled by the administrator. This simply means that the car dealerships who are selling the contract are not liable for the claims since they only sell this in behalf of the administrator in exchange for a few percentage or commission.

Given this, you will be dealing with the administrator in the event that you will be having a claim that is covered by the contract. You only need to be very careful in dealing with the administrator since they can do almost every way to deny your claim.