Buying a new car is an exciting time. When you are sitting at the dealership, the salesman may try to offer you many other products for your vehicle and it is hard to make a quick decision on what you really need. A car maintenance plan is an option that your salesman may try to convince you to purchase.
What is a Maintenance Plan?
If you are offered a vehicle service plan, ask for specifics about what that plan is. Many dealers use that term for both extended warranties and car maintenance plans.
A car maintenance plan covers services that the vehicle’s manufacturer recommends be completed to keep the car running in optimum condition. These things could be oil changes, filter replacements, and tire rotations. Dealerships have learned that offering maintenance plans can be a very profitable revenue stream for their business.
These plans are prepaid and can be very valuable to have, but you need to carefully consider what is covered and what you would pay out of pocket compared to the cost of the plan. Always read all of the fine print details, and if you don’t understand the contract, consider having an attorney explain it to you.
A car maintenance plan covers services that the vehicle’s manufacturer recommends be completed to keep the car running in optimum condition. These things could be oil changes, filter replacements, and tire rotations. Dealerships have learned that offering maintenance plans can be a very profitable revenue stream for their business.
These plans are prepaid and can be very valuable to have, but you need to carefully consider what is covered and what you would pay out of pocket compared to the cost of the plan. Always read all of the fine print details, and if you don’t understand the contract, consider having an attorney explain it to you.
The Positives of Purchasing a Plan
Dealerships rely on their service departments for a large part of their income. By selling car maintenance plans, they are guaranteed that their department stays busy. These plans are prepaid and often offer discounts on the services you will need. Remember, though, that what sounds too good to be true often is, and you still need time to think about whether you actually need the maintenance plan. Do not let a sales person talk you into something that may not fit your needs.
For example, the average cost of an oil change in South Carolina is around $30. Assuming you change your oil as recommended, or about every three months, that is $120 a year. Tire rotations are about $40, and it needs done once a year. Filter costs vary, but you may plan on about $100 for filters a year. If this is your plan of maintenance, you will be paying about $260 a year in car maintenance. (You also need to check your car’s owner’s manual for recommended maintenance.) If you can get a car maintenance plan for less, it may be worth it.
For example, the average cost of an oil change in South Carolina is around $30. Assuming you change your oil as recommended, or about every three months, that is $120 a year. Tire rotations are about $40, and it needs done once a year. Filter costs vary, but you may plan on about $100 for filters a year. If this is your plan of maintenance, you will be paying about $260 a year in car maintenance. (You also need to check your car’s owner’s manual for recommended maintenance.) If you can get a car maintenance plan for less, it may be worth it.
The Negatives of Purchasing a Plan
Before you purchase a plan, carefully read your owner’s manual. These can often be found online if the dealership doesn’t have one. See what maintenance the manufacturer recommends. Some dealers still use outdated information to try to convince customers to purchase the plans.
An example of this would be that new vehicles require very little maintenance. Many cars will go for more than 5,000 miles (instead of 3,000) between oil changes. This reduces your out of pocket expenses. Many manufacturers now state that your vehicle will only need significant servicing every 30,000 miles. If you don’t drive much, a car maintenance plan is probably not a good option for you.
Also, once you purchase the plan, you will have no options about who services your car. Unless you decide to pay out of pocket, you will have to take your car to the dealership for services. If you aren’t happy with their service, you have no options. Another thing to consider is that the things that do wear out quickly, such as wipers and brake pads, are not usually covered by maintenance plans.
The dealership may also sell the plan according to their schedule of maintenance and not what is recommended by the manufacturer. If you drive often in extreme heat or cold, oil changes may be recommended more often, but your dealership may not take these conditions into account, and you will have to pay for the oil changes yourself.
An example of this would be that new vehicles require very little maintenance. Many cars will go for more than 5,000 miles (instead of 3,000) between oil changes. This reduces your out of pocket expenses. Many manufacturers now state that your vehicle will only need significant servicing every 30,000 miles. If you don’t drive much, a car maintenance plan is probably not a good option for you.
Also, once you purchase the plan, you will have no options about who services your car. Unless you decide to pay out of pocket, you will have to take your car to the dealership for services. If you aren’t happy with their service, you have no options. Another thing to consider is that the things that do wear out quickly, such as wipers and brake pads, are not usually covered by maintenance plans.
The dealership may also sell the plan according to their schedule of maintenance and not what is recommended by the manufacturer. If you drive often in extreme heat or cold, oil changes may be recommended more often, but your dealership may not take these conditions into account, and you will have to pay for the oil changes yourself.
The Final Cost
If you decide to purchase the car maintenance plan, be sure to pay for it in full and do not add it to the total of your car or you will be paying interest on the plan, just like the purchase price of the car. To make the best informed decision, make sure to find out exactly what is covered and compare prices of those services to the total cost of the plan.
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