What is an Extended Service Plan?
An Extended Service Plan provides coverage for parts and the associated labor relating to replacing items that break on your vehicle.
What is covered by an Extended Service Plan?
To answer this question we must first understand that there are many types or levels of plan coverage;
- Total Coverage (typically called: Premium, Ultimate, Complete) - is the most comprehensive plan offered by a company. These plans typically cover over 1,000 parts, provide coverage for collateral damage (one part breaks because of another part), provides coverage for wear and tear, provides roadside assistants, and provides a rental car).
- Extra Coverage (typically called; Extra or Quality) - provides coverage for a short list of extra parts above your essentials (powertrain and electrical).
- Base Coverage - provides coverage for the items that make your car start and move. This usually does not cover your radio or air conditioning.
- Powertrain Coverage - provides coverage for only the parts related to your engine and transmission.
Who offers Extended Service Plans?
Every new car dealership will offer Extended Service Plans that are either backed by a manufacture or usually a highly reputable third party that has been underwriting service plans for years.
Used car lots that have been in business for a good amount of time and meet certain qualifications can and often do offer Extended Service Plans.
In today's market, many finance companies and insurance companies have begun underwriting and offering service plans also.
IN OUR OPINION: We strongly suggest that you take extra precautions when considering a service plan that is offered to you on T.V., Radio, by Phone, or in the mail. These companies typically do not offer the same protection as the Extended Services Plans you can purchase at a dealership.
What kind of protection do you need?
The answer to this question may seem a little vague, but you must consider the following before determining what kind of Extended Service Plan you need:
- The year of your vehicle
- The present miles on your vehicle
- The amount of miles you drive a year (on average)
- The amount of coverage you desire
- The amount of money you are willing to spend
Protect your investment.
We have all heard these comments from a dealer:
- Protect your investment
- Protect your cash
- Peace of Mind
These are all correct statements that we have for years taught the dealers to say to sell products, especially Extended Service Plans. Well in reality these are correct statements. The purpose of an Extended Service Plan is to prevent you from having to pay for unexpected repairs, which can be extremely costly and usually happen when we least expect it and are low on cash.
We have all heard of people who have bought one before and never used it, but we have also heard of the people that bought one and had to replace an engine or transmission. Extended Service Plans are a great benefit, but only you can decide if you truly need one.