Receive his pink letter with the warning “RESPONSE TO THIS NOTICE REQUESTED.” This is just one of the many letters and phone calls, ALL SCAMS that will be received after the purchase and registration of a vehicle. Ask a service manager at a dealer if these guarantees are worth it. The only extended warranties that are worth something are those purchased through the manufacturer. They are much cheaper and the costs are negotiated. Typically, the price of the service contract is based on manufacturing, model, condition (new or used), coverage and duration of the contract. Advance fees can range from one to several thousand dollars. In addition, you may have to pay a deductible. Find out if the deductible is calculated by visit or repair. It can make a big difference. Suppose you have a $100 deductible and your car needs to be repaired in three. With the per-visit deductible, you pay $100. If you have a deductible per repair, you pay $300. Compare service contracts with the manufacturer`s warranty.
New cars have a manufacturer`s warranty that typically offers coverage for at least three years or 36,000 miles, depending on what happens first. A service contract is likely to bring benefits only after the manufacturer`s warranty has expired. Check the documents to make sure this applies before you accept the purchase of a service contract. You may have to pay for covered repairs and wait for the service company to reimburse you. If the car service contract does not usually indicate the duration of the refund, ask. Find out who needs to settle claims in the event of a dispute with the service contract provider and use a dispute resolution program. If the service contract takes longer than you would expect to own the car, ask if it can be transferred if you sell the car and if there is a fee, or if a shorter contract is available. If you buy a “demonstrator,” a new car that has not been in possession, rented or rented, but has been driven by dealer staff, ask when the warranty cover begins and ends. Maybe it started when the dealership put the car into service.
Find out if the car service contract is signed by an insurance company.