CONSUMER BUYING AND USAGE TIPS FOR MOTOR VEHICLE SERVICE CONTRACTS

WHERE TO PURCHASE:

• Most service contracts for motor vehicles are sold at automotive dealerships at the point of sale; service contracts also can be obtained after the motor vehicle purchase from the dealer or independent service contract providers.
• Service contracts are available for both new and used vehicles; over10 million contracts are sold annually.
• 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.
• Be alert to providers who use unsolicited mass marketing techniques, such as direct mail and telemarketing (e.g., “robo-calls”).

BEFORE PURCHASE:

• Ask for a copy of the contract and read the provisions carefully to be sure the terms and benefits fit your needs.
• Only buy from an auto dealer or service contract provider willing to supply a copy of the contract terms and conditions for your review prior to purchase.
• Research the provider and/or contract administrator with the local Better Business Bureau and/or state insurance commissioner. As with any vendor, consumers are urged to research the company with whom they do business.
• Avoid purchasing a service contract if you feel overly pressured by sales personnel.

ONCE PURCHASED:

• Read the provisions carefully to become familiar with all coverage, exclusions, and terms and conditions.
• Most service contracts (extended warranties) come with a free-look period that gives consumers 30 days from time of purchase to review the details of the contract and receive a complete refund upon cancellation.
• Carefully fulfill all contract obligations, such as regular oil and filter changes, mileage milestone check ups, and other maintenance.
• Maintain a file for contract paperwork, receipts, and maintenance records.
• Use the benefits of the service contract as often as needed and applicable to enhance the life of the motor vehicle and maximize its value.
• Check to see if the contract is transferable when selling the covered vehicle.

Read about the benefits of Motor Vehicle Service contracts.