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Service Contracts

Q. What is a service contract?
A.
A service contract specifically covers car repairs and maintenance for a set period of
time. Manufacturers, contract companies, insurance companies, and car dealers offer
service contracts.

Q. Should I purchase a service contract on my automobile right away?
A.
If you buy one at all, you should consider waiting until your warranty period expires.
After all, why pay extra for duplicate coverage?

How a Service Contract Differs from a Warranty

Unlike a warranty, a service contract may not come from the manufacturer. Service
contracts are optional and expensive, and often, coverage overlaps the warranty
protection. Also, a service contract often contains more limitations and exclusions than a
warranty, may require you to pay a deductible fee, and might not cover all parts and labor
or routine maintenance. If a service contract is available on a used car, the appropriate box
must be checked on the Buyers Guide.
Finally, if you believe that your service contract has been breached, in addition to any
state remedies available to you, you may be able to sue under the Magnuson-Moss
Warranty Act, and recover your attorney's fees and court costs, as well as your damages.

- False and Deceptive Repair Practices

- The Mechanic's Lien


 

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