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Car Service Contracts

An automobile service contract is similar to a warranty as they both promise to pay for certain repairs to your car. In order to determine if a service contract is worth paying for, you should consider; the cost, the services covered, and whether this a duplicate coverage from your car warranty.  Often times, the coverage in a service contract is duplicated by a warranty that already covers your car.Some of the issues you should look to are:
  1. Cost and Length of the Service Contract.   The initial price can range from several hundred dollars to more than $1,000. There may be a deductible each time your car is serviced or repaired. If the length of the service contract is similar to the warranty then it is not worth purchasing a similar contract. 
  2.  Repairs and Services Are Covered:  Not all service contract cover all repairs. Check for all the exclusion applying to the policy.
  3. Who will make the repairs: Some contracts allow you to choose among several service dealers or authorized repair centers.
  4. Who Backs the Service Contract: the contract is only valuable if the backer makes good on the terms, learn as much as you can about the reputation of the company.
Find out if your car will be covered if it breaks down while you're out of town, while you're on a trip or if you move permanently. Some auto service contract companies and dealers offer service only in specific areas. Under some contracts, you are also required to get prior authorization for any repair work or towing services.Learn as much as you can about the reputation of the company that is issuing the coverage. Contact your local state consumer protection office, the state motor vehicle department, the local Better Business Bureau at www.bbb.org, or your local automobile dealer association. 



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