My mechanic mentioned a service contract, what Is that?
Many vehicle dealers and others sell optional service contracts. Vehicle manufacturers or independent companies issue these contracts. Not all service contracts are the same; prices vary and usually are negotiable. To help decide whether to purchase a service contract, consider:
- The cost.
- The repairs to be covered.
- Whether coverage overlaps coverage provided by any other warranty.
- Where the repairs are to be performed.
- Procedures required for filing a claim, such as prior authorization for specific repairs or meeting required vehicle maintenance schedules.
- Whether repair costs are paid directly by the company to the repair shop or whether you will have to pay first and get reimbursed, and
- The reputation of the service contract company. This can be found by checking with your state Attorney General`s office or local consumer protection agency.
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