Should You Buy An Automotive Extended Service Contract?

The decision to purchase an extended service contract or mechanical break down policy as they are sometimes called is a decision that has many variables. Depending on the age of the vehicle, the usage, how long do you plan on keeping the vehicle for are just a few questions that need to be considered.

If you look online, some of these so called guru's who write scam pieces will tell you" ?Don't Buy" ?it's a scam. I whole heartily disagree with their opinions, I question if they have real world knowledge and experience to begin with. If they did, then I firmly believe their opinion would be other wise.

The scam comes when you are charged outrageous and inflated prices for an extended service contract, they are not cheap to begin with, but those who exasperate the cost are the ones who are taking advantage of unsuspecting consumers. Or perhaps even requiring you to purchase as a condition of buying the vehicle, you should never be forced to buy under any circumstances.

With automotive repair labor rates ranging easily up to $100.00 per hour or more, it doesn't take a huge repair to cost you major bucks, and with the electronics and technologies of today's automobiles, parts prices are equally as expensive.

During my 26 years in the automotive service industry, I can recall countless and numerous times where customers wished that they had purchased, and those that did were glad they made such a sound financial decision.

Consider the following examples of repair cost:

Air Conditioner Repairs can easily cost $1500.00 for compressor replacements.

Transmission Overhaul or Replacements--$3000.00

Water Pump replacements--$600.00

Power Steering Pumps and Steering Gears--$600-$2000.00

However, don't be mislead into believing a mechanical break down policy covers every nut and bolt on the vehicle, there are variables and different kinds of policies as well. Some cover seals and gaskets, wear and tear items, consequential damages etc and others don't. Be aware of what it does and does not cover before buying, this will save you a lot of grief in the event you have a mechanical failure.

It is a major decision, and one that requires weighing the advantages and disadvantages.

My personal and professional opinion is that if you are going to use the vehicle on a daily basis, you plan on keeping for 2 years or more after the original factory warranty has expired, then you should purchase the extra protection.

It is after all, like an insurance policy, you hope that you don't have to use it, but it will give you some peace of mind in the event that you have to have an expensive repair.

Jerry Christopher

Jerry Christopher, has over 26 years experience in the automotive industry as vehicle technician, body shop manager, and service manager of new car dealerships.

When I left the business, I decided to share my knowledge of the used car and automotive industry.

"During my experience, I've seen countless situations where consumers have been taken advantage of by sales people, finance managers etc. Situations where they really needed a used car guide in their corner."

"It was frustrating for me. As an employee, I had to be careful about what information I relayed to them about the vehicle they had purchased."

Owning my business allows me to stand beside a consumer, like their own personal 'used car guide', and inform them about the hazards of dealing with unscrupulous sellers. By following my course content, they can minimize their risk of purchasing a vehicle that is less than they expected.