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By Enterprise Car Sales
Mortgage payment: $1,000
Utility bills: $300
Health insurance: $100
New engine: $2,500?
For many credit union members, “saving” for unexpected and incidental expenses – such as major automobile repairs – is not the first item listed on the budget after the regular monthly bills.
But the fact is, if a member is planning on purchasing a used vehicle and driving it for several years, expensive parts will need to be tightened, cleaned, or replaced, which could result in a significant financial burden. For members who are not able to save for such expenditures, a vehicle service contract can be a terrific investment.
A vehicle service contract that is purchased at the time of sale serves as a supplement to any remaining manufacturer’s warranty coverage. The contract can include a wide range of repairs and maintenance protection – from bumper to bumper to just the engine. After a member purchases a service contract, the contract provider – be it a dealership, independent insurance company, or other third party – is then responsible for the cost of all future covered repairs.
Many dealerships include the option to purchase a vehicle service contract at the time of sale or for a period of time afterward. Third-party companies also offer contracts and can be found via the Internet.
There are several types of contracts, so it is important that members research what’s best for their particular vehicle and budget. Some offer a choice of miles covered by the agreement, and a period of time – such as 30,000 miles/30 months. Some contracts cover engine components only, others offer bumper-to-bumper coverage. They can also come with services like comprehensive towing, battery jump-start, tire change, and fuel delivery.
Many vehicle service contracts also offer deductibles, which allow members to have a reduced up-front charge and pay a deductible should they need to take their automobile to be serviced.
So who should get a vehicle service contract? To start, if a member is planning on keeping their vehicle for several years or drives excessive miles, it may be a good idea. One major out-of-warranty repair can easily exceed the cost of buying a vehicle service contract. Individuals on tight budgets also might find value in a vehicle services contract. Owners without coverage may put off needed repairs until they can afford the cost of the repair. This delay may result in additional damage to the vehicle and can create potentially unsafe driving conditions.
When shopping for a service contract, the following considerations will help members with this important decision:
It’s important for members to purchase these contracts through a reputable company, because the contract is only as good as the company that backs it. Enterprise Car Sales offers service contracts on every used vehicle for customers’ added protection and peace of mind, including extensive mechanical coverage, roadside assistance and alternate transportation. These service contracts are administered and backed by the Insurance People of General Motors, which gives members nationwide coverage.
This sponsored content article is provided to the credit union community for shared insights and knowledge from a recognized solutions provider in the industry. Please note that the views and opinions offered here do not reflect those of Callahan & Associates, and Callahan does not endorse vendors or the solutions they offer.
If you are interested in contributing an article on CreditUnions.com, please contact our Callahan Media team at firstname.lastname@example.org or 1-800-446-7453.
April 10, 2006
7/26/2012 04:07 PM
Helpful for sales.
Really breaks down why a vehicle service contract is important when buying a used car. Thanks...
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