When Should You Consider Opting for Extended Service Contract and What Are Its Benefits

When Should You Consider Opting for Extended Service Contract and What Are Its Benefits

When buying a new car, you expect to get adequate coverage on mechanical breakdowns under the manufacturer’s warranty. However, it is only for a specific period subject to terms and conditions. Like other motorists, you intend to use the car long after the original warranty expires. It implies from that moment onwards you will have to pay for the costly repairs and maintenance. To avoid doing so, the car salesman may encourage you to buy an extended service contract. For this, you need to pay an additional charge to enjoy its benefits in the future.

What do owners need to consider when opting for extended service contracts?

At the outset, you need to understand that new cars that are coming out of the manufacturer’s production line have a factory warranty. The car you ultimately buy from your dealer will also have one included in the price. It is prudent on your part to read the fine print of this policy carefully. Only then will you come to know its limitations and exclusions. In this situation, you may want to buy an extended service warranty. This is a plan where you get coverage for certain costly repairs in case your new car breaks down after the factory warranty period is over.

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You probably know that new cars are less likely to breakdown and need costly repairs. However, it does make sense to opt for extended service contracts once the manufacturer’s warranty expires. In doing so, you need to keep in mind the following six factors:

  1. Browse through the manufacturer’s website to assess how often your new car will need repairs,
  2. You need to determine what type of additional coverage does the extended service contract providers,
  3. When deciding to opt for an extended service contract, you should know who handles the claims,
  4. You also have to find out who is actually responsible for enforcing the terms of the contract,
  5. You even have to know what other alternatives are available instead of opting for an extended service contract, and
  6. Do the terms and conditions of the extended service contract meet your specific needs?


You can enjoy the following three advantages when opting to buy an extended service contract for your new car:

  • Your car dealer is responsible for preparing all the relevant paperwork,
  • The contract covers expensive repair and maintenance costs on your car which may be out of your reach, and
  • You do not have to worry about replacing high-tech components for your car in case of breakdown.

Extended service contracts can help you avoid incurring costly repairs in the event your new car breaks down. You also do not have to lose sleep over finding high-tech parts for your car. Moreover, your car dealer deals with all the necessary paperwork.

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However, when applying for one, you to know what additional coverage it provides. You should also be aware of who enforces its conditions and handles the claims. Only then can you determine whether or not it is worthwhile for your needs in the future!

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