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Buy a vehicle service contract to save money when warranty expires

Alan Miller Senior Vice President CNA National Warranty Corporation

Vehicle service contracts pay for repairs due to mechanical breakdown after the factory warranty expires, allowing car owners to save money for up to 10 years of ownership and up to 120,000 miles. With today’s uncertain economy, vehicle service contracts can be a great asset to your peace of mind; know the signs of a quality service contract program before it is too late.


Do protect yourself from rising auto repair costs

Vehicle service contracts protect you from skyrocketing auto repair costs that can absorb a significant amount from your budget. The contract details should specifically spell out what is and what is not covered. Any ambiguous statements about coverage should be explained before purchasing. Your responsibilities for maintaining the vehicle should also be explained.

You should look for other benefits like towing and roadside assistance. Also make sure the coverage pays retail prices for parts and labor costs.

Do fix your vehicle when you need to, not only when you can afford it

A high-quality vehicle service contract helps hedge against inflation by protecting you against the rising costs of repairs, enabling you to fix your vehicle when you need to, not only when you can afford it. Use your vehicle service contract to pay for repairs immediately without having to put your family and passengers at risk.

Do limit out-of-pocket expenses to your deductible

Confirm the deductible you will be required to pay. Regardless of your deductible amount, the coverage provided by a quality vehicle service contract allows you to keep more money in your pocket to use for other bills and expenses.

Do think about the increased sales value a transferable service contract brings to your vehicle

A used vehicle without a warranty can be harder to sell, but a vehicle service contract that can be transferred to a subsequent owner can help bring a higher resale value.

Do check the financial strength of your vehicle service contract provider

Good financial strength of your service contract provider is a must with the current economic climate. Research and track their financial history, specifically to ensure a high level of financial stability. This is especially important for products such as extended service contracts.


Do not assume all vehicle service contracts are the same

Often people assume all vehicle service contracts are the same with equal financial backing, claims administration, and management experience. However, the level and quality of these essential resources varies within the industry. Do your homework.

Do not select a cheap vehicle service contract provider just because of the short-term cost savings

The price advantage with low-quality vehicle service contracts usually comes with a lot of headaches. Low-quality service contracts usually have less coverage benefits, and a less efficient claims administration and authorization process, which leads directly to a less satisfying experience for the consumer.

Do not be afraid to ask questions

Buying and selling cars is an everyday routine for car dealerships, but not for consumers. If you have questions or endure special driving conditions that may be in conflict with your vehicle service contract language, ask up front, before you sign anything.

Do not assume you have "bumper-to-bumper" coverage

"Bumper-to-Bumper Coverage" is an overused term and underutilized product in the auto industry. If you hear this term used to describe your vehicle service contract it should raise red flags immediately—you may not be dealing with a trustworthy provider. There is no complete bumper-to-bumper product in the service contract industry, so beware of this claim.

Do not don’t procrastinate once an issue occurs with your vehicle

Vehicle maintenance is a vital responsibility with any service contract, so make sure you fulfill all of the maintenance requirements and bring your car to the repair shop as soon as you identify a problem. Lower-quality service contracts will try to find any way not to pay a claim, while high-quality service contracts give customers the benefit of trying to identify the appropriate contract language that enables them to pay their claim.

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Following these best practices to select a high-quality service contract provider will ensure the best experience when your automobile needs repairs. Don’t allow the expiration of your factory warranty mean the end of timely repairs to your vehicle. Quality service contracts can provide peace of mind for the entire time you own your vehicle.

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Photo Credits: Worried Young Woman With Her Broken Car courtesy of anankkml/; Check Man, Cross Man and Jump Man © ioannis kounadeas -

Alan Miller Senior Vice President

Alan Miller is senior vice president of sales for CNA National Warranty Corporation, headquartered in Scottsdale, Arizona. Miller has 25 years of automotive industry experience in sales and as a director of finance & insurance operations. CN...

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