What is a vehicle service contract?

A service contract, also called an extended warranty, is a contract that covers certain vehicle problems or repairs after the dealer’s or manufacturer’s warranty expires. … If your car needs repairs and it’s covered under the contract, you’ll submit a claim to the service contract provider.

How does a vehicle service contract work?

Sometimes referred to as an extended warranty plan (though not officially a warranty by legal definition), a vehicle service contract is a paid plan that helps cover the costs of any repairs needed once the limited warranty has expired. As the car ages, the likelihood of it needing repairs rises.

Can you get out of a vehicle service contract?

If you’re really sure you want to cancel, the first thing to do is to contact the dealer through which you purchased the car. They will usually be able to provide you with a cancellation form, which you need to complete and then return to them.

How much is a service contract for a car?

A typical contract can cost anywhere from a few hundred dollars to $1,000. However, on average, most vehicle service contracts cost somewhere between $350 to $700 per year.

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What is the difference between a warranty and a service contract?

Warranties are included in the price of the product. … A service contract is sometimes called an “extended warranty,” but service contracts are not warranties. A service contract can help you fix or maintain your product for a specific time — like a warranty. But, unlike a warranty, service contracts cost extra.

What are the two types of vehicle service contracts?

There are two main types of vehicle service contracts: a powertrain warranty and a bumper-to-bumper warranty. A powertrain warranty covers the components that make your vehicle move: the engine, transmission, transfer case, drive axles, and other related components.

What is included in a service contract?

Most often, Service Contracts include details such as deadlines and payment agreements. Contracts also usually define the work to be performed and what process needs to take place if changes need to be made. These are legal agreements and can be challenged if needed.

How long do you have to cancel a service contract?

Your right to cancel

You have 60 days to cancel a service contract for a new vehicle without penalty. After 60 days, you can still cancel and receive a partial refund.

Can I cancel a service contract after signing?

California’s Home Solicitation Sales Act – allows the buyer in almost any consumer transaction involving $25 or more, which takes place in the buyer’s home or away from the seller’s place of business, to cancel the transaction within three business days after signing the contract.

Can I cancel an extended service contract?

You can cancel an extended warranty at any time and you’ll get a prorated refund for the unused portion of your policy. If the warranty was included in your loan, your car payment won’t drop, but you may pay off the car sooner after the refund is deducted from your balance.

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Can you return a car you bought from a dealer?

The dealer who sold you the car is usually not legally obligated to take the car back and issue you a refund or exchange after you’ve signed the sales contract. … Some dealerships may allow you to return the vehicle if you’re unsatisfied or if the car has major mechanical issues, but only under special circumstances.

What is a fair price for an extended car warranty?

Typically the average cost of an extended car warranty would be around the range of $1,800 with a good quality package and after-sales service. But when you divide that price up into affordably low monthly payments, protection for your vehicle ends up costing a whole lot less than your cable bill.

What is vehicle protection?

The Vehicle Protection Plan is a mechanical breakdown service contract designed to keep you covered so you don’t have to pay out of pocket for future unexpected repairs.

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