“Service Contract”. Do you need one and should you buy one? Before we get to that decision, do you know what a Service Contract IS, and what it means? Car dealerships want to sell you one, most-often coining them as “extended warranties”. They are NOT “extended warranties”. They are not a warranty at all. What are they then? They are a insurance policy against mechanical breakdown. How does that differ from a warranty? Well, a warranty is administered by the auto manufacturer, and they just pay for the repairs. A Service Contract, as with any insurance policy, is a CLAIM. That means it has to go through the claims process and can either be “approved” or “denied”. Now you’re starting to get the picture. Is there a Service Contract that is hassle-free? – YES. Each automobile manufacturer sells their OWN Service Contract, and they are VERY good. They go by names like “Nissan Security Plus”, “BMW Protection Plan”, “Toyota Extra Care”. These factory service contracts are generally hassle-free, and everything is taken care of between the dealership Service Department and the auto manufacturer. Should you buy one? The answer is, IF you are going to keep your vehicle to 100,000 miles, 7 or 8 years, etc., then the answer is YES. There is a caveat, you MUST buy this from the dealer BEFORE the car goes out of it’s original bumper-to-bumper warranty. Consumers *do* need to know that repairs done under ANY Service Contract do NOT count as repairs under California’s Lemon Law. Only factory warranty repairs or warranty repairs done under “Certified Pre-Owned” cars are applicable. Should you buy a dealers Service Contract rather than a manufacturer’s Service Contract? That answer lies within your pragmatic logic from reading this article.
“Lemon Law Bytes” is Copyright 2/1/2019 The Law Offices of William R. McGee, APLC
Disclaimer: all Lemon Law Bytes articles are for informational purposes only. None of the content should be construed or assumed to be legal advice. If you desire legal advice on your 2014 or newer vehicle, please call us to speak with one of our attorneys.