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A Vehicle Service Contract (VSC) is often referred to as an “auto warranty” or an “extended car warranty,” but it is not a warranty. A VSC does, however, provide repair coverage for your vehicle after the manufacturer’s car warranty expires.
A VSC is a contract between you and a VSC provider or administrator that states what is a covered repair.
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15 Questions to Ask Before Taking Out a New Car Extended Warranty
Not all car warranties are created equal. And there’s no reason why you need to take the one that the dealer is offering. Learn more about what to do by reading these 15 questions you should ask before taking out an extended warranty.
1. What is the Length of the Contract?
It’s very important to understand the basics of the extended car warranty you are interested in purchasing. Pay close attention to details like the time and mileage limits. The last thing you want is to discover that a claim has been denied due to the coverage having expired because you’ve reached your mileage limit.
The best way to prevent confusion is to read the contract carefully so that you clearly understand the terms of the plan.
2. What is Covered?
Keep in mind that not even the best contract is going to cover everything under the sun. So you’ll want to look closely to make sure things like roadside assistance, rentals, towing, and lockout service are included.
Many policies have limits on rental fees and towing, and thus some of those expenses might have to be paid out-of-pocket. Also be aware that the coverage in some policies depreciates based on amounts paid for repairs or depending on the age and mileage of the vehicle.
3. How Much Does it Cost?
Remember that there are different plans offered at different costs. So don’t be fooled by the low cost of the most basic package because it will likely be missing important features that you’ll want to be included. These added features might cost a little more upfront, but will be worth every penny when an emergency arises.
4. What Company Backs the Plan?
Before purchasing the extended warranty, take a look at the company backing the contract. Make sure they have a high rating with the Better Business Bureau so that you know you can trust them.
There are government regulations in place to protect consumers, and a good rating tells you that you can expect prompt payouts, reasonable rates, and won’t be overcharged for services.
5. Who Will Pay for Repairs?
Make sure that the contract specifies how payment for repairs is handled. Are you expected to pay the repair shop yourself and then get reimbursed? Or does the company offering the warranty pay the repair shop directly?
If you are expected to pay, how long should you expect to have to wait to receive the reimbursement check in the mail?
6. Is the Price of the Contract Negotiable?
Negotiating the price of your new car is exhausting enough without having to haggle over the price of an extended car warranty. Nonetheless, you should never be afraid to negotiate for a better deal.
It’s definitely worth the time and effort. After all, you can typically save at least $300 by not accepting the first offer they show you.
7. Will New or Reconditioned Parts be Used for Repairs?
Don’t let this detail scare you. Everyone typically prefers to have new parts used for the repair of their car, but most reputable companies allow the use of reconditioned parts.
Many times it’s up to what the mechanic recommends. Just make sure that your policy covers OEM or remanufactured parts if you are paying for a higher level of coverage.
8. Where Will the Repairs be Completed?
Every warranty is different when it comes to choosing a repair shop. Some plans allow the consumer to pick a preferred shop for repairs, while other plans offer a list of approved repair shops.
This can be an important detail if the approved shops are not located in your area. It can be a huge inconvenience for you to have to take your car to another town anytime a repair is needed.