Motor Vehicle Service Contracts
According to national data, car, truck, and motorcycle owners are keeping their vehicles for longer periods of time. A motor vehicle service contract provides an efficient and economical way of maintaining a vehicle for long-term ownership, particularly after the manufacturer’s limited warranty expires. In addition, the increased complexity of components and analytics in today’s motor vehicles has greater financial implications when failure occurs. According to the National Auto Dealers Association, “the level of standard equipment that's considered normal for a car has increased dramatically. There are telematics in cars that weren't there 15 years ago for electric windows and locking, automatic starting, satellite radio, etc.”
With a service contract, drivers can keep their vehicles in top-operating condition at a fraction of typical service garage repair rates. In addition to enhancing the resale value of a well-maintained vehicle, most service contracts are transferable to a new owner at the time of sale. Click here for more on the benefits of auto service contracts.
The SCIC believes strongly in the value of motor vehicle service contracts and offers buying and usage tips for consumers to maximize their worth.
WHERE TO PURCHASE:
- Most service contracts for motor vehicles are sold at automotive dealerships at the point of sale;
- Consumers can also purchase an auto service contract from the dealer or independent service contract providers after buying a motor vehicle.
- Service contracts are available for both new and used vehicles.
- The vast majority of service contracts are sold and/or administered by reputable, licensed companies that abide by current regulations, adhere to high principles of customer service, and are protected by financial reserves and/or insurance.
- A list of motor vehicle service contract providers who are members of the Service Contract Industry Council, a non-profit trade association representing the service contract industry, is available here.
The SCIC urges consumers to be cautious when dealing with providers who use unsolicited mass marketing techniques, such as direct mail and telemarketing (e.g., “robo-calls”).
Click here for additional tips on buying and maximizing service contracts for motor vehicles.
The Service Contract Industry Council works directly with state legislators nationwide to protect consumers, regulate the licensing of service contract providers and implement stringent financial safeguards. Currently, 37 states have adopted the SCIC Model Act in some form to regulate providers of motor vehicle extended warranties. To read about recent legislative highlights, click here.