Advantages and Disadvantages of Vehicle Service Contracts
Have you already signed up for car insurance and think you are covered for any eventuality? You might want to take a minute to reconsider, as chances are that you haven’t considered getting a vehicle service contract yet. A vehicle service contract, often referred to as an extended warranty is an insurance policy that can be invaluable to you and your car later on down the line.
Vehicle service contracts are often obtained aftermarket, as a supplement to the typical collision or liability insurance. Vehicle service contracts covers a very specific set of concerns which have to do with repairs that the car may need several years down the line. In the case of older cars, the need for a vehicle service contracts may come up sooner rather than later, which makes it a good idea to at least consider getting a vehicle service contract at some point during the course of your car ownership. However, sometimes a vehicle service contract isn’t all that it is cracked up to be.
Advantages of Vehicle Service Contracts
Car repair can be costly.
You might not think so right now with your car being brand new and all, but it will probably require a repair at some point. In some cases, the costs associated with repair can be considerable. This is especially the case with older cars, although newer models with highly specialized components can be expensive to repair as well.
You will likely have a need for repairs sooner or later.
No one ever wants to think that they will get into an accident, but they are an inevitable part of life for most people. There is little you can do about avoiding an accident except for driving safely at all times. Still, most people don’t even consider driving without collision or liability insurance. When it
comes to a mechanical breakdown, even driving safely puts miles on the car and moves it ever closer to the next mechanical breakdown. Protecting your investment with a vehicle service contract, will make it easier for you to deal with the cost of a mechanical breakdown.
You will get more years of service out of your car.
You have probably spent a lot of money on your car and even more ensuring that it conforms to the DMV requirements. Therefore, it only makes perfect sense to take steps to ensure that your car continues to provide reliable service for as long as possible. A vehicle service contract will allow you to get more years of service and performance out of your car, thereby giving you the opportunity to protect your investment in the best way possible.
Vehicle Service Contracts coverage is generally inclusive.
If you take a look at all the different options in vehicle service contracts policies out there, you will likely find more than a few that offer inclusive coverage. In most cases, this is the most favorable type of a vehicle service contracts to get, as it will afford you the most protection.
Disadvantages of Vehicle Service Contracts
Vehicle Service Contracts often covers only part of the repair.
In most cases, vehicle service contracts will only cover part of the cost. Most such plans involve only a specific part of the car, which means that you will have to shell out some more money out of your own pocket in order to deal with other parts of the car.
Vehicle Service Contracts add to existing insurance costs.
Most car owners already have to deal with exorbitant insurance fees just to get their car street legal. Add to that the burden of a vehicle service contracts, and the total cost may just be less palatable even given the advantages of a vehicle service contract.
Insurance claim issues.
If you have had any kind experience with insurance claims in the past, you already know that the process is anything but simple. It often seems as if insurance agents are your best friends when they are getting you to sign up for a policy, but watch how quickly things turn around when it comes time to collect on a claim. Even if you pay your insurance premiums religiously, there is a chance that your claim might not be covered due to some clause in the contract that you neglected to read or failed to understand.
The long wait. Even if you do manage to get a favorable resolution to your claim, you might be in for a long wait before you actually get any money for the repair. A common scenario involves the car owner paying for the cost of getting the car fixed beforehand, only to run into considerable difficulty getting reimbursed later on. if you have already paid out of the pocket just to get your car back in good running order, you might be disappointed to find out later on just how much trouble you can have getting the insurance company to make good on its responsibility.
How to Make A Decision
Like anything else, a vehicle service contract has its ups and downs. The best thing for you to do is to make a thorough and honest assessment of the condition of your car, with an estimation of the likelihood that it will need repair. You should also determine how valuable a vehicle service contract might be compared to the cost of hiring a mechanic to perform any needed repairs when issues come up. After you have made a thorough assessment of these issues, you will be better able to determine the feasibility of a vehicle service for your specific needs and circumstances. When making a decision to purchase, go with a company that is honest with you about the advantages and disadvantages of purchasing a vehicle service contract.