Why Service Contract

Cars911 would like to encourage you to consider an important item for every vehicle which is a Vehicle Service Contract (VSC). A VSC can supplement a factory warranty and provide superior coverage that the manufacturers do not offer, which can provide you with valuable protection for many years.

You are probably thinking... why would I need a VSC when I am still under warranty? You're right! Some manufacturers have great warranties. Most manufactures have longer powertrain warranties than the sometimes called("bumper to bumper"). So what's the difference between coverages? The powertrain warranty covers the vehicle's engine and transmission only. According to most service departments less than 5% of customers ever use this warranty. This means, 95% of customers come in for a different type of repair, which is not covered by the basic powertrain warranty.

This is great news and it shows that manufactures have solid powertrain warranties. The question is... how reliable can a vehicle be? There are service stations all across the US and every dealership has a service department. We all know they would not be there if we did not need them. The fact of the matter is, no matter how reliable a vehicle is one can never predict a mechanical or electrical breakdown.

Allow me to demonstrate the value of this protection with simple math. If a vehicle is 99.9% reliable it would be considered a dependable vehicle. Let's say that the vehicle you bought was 99.9% reliable. This means only .1% of the time it would be unreliable. In a year there are about 365 days, and .1% of the year your vehicle would be unreliable; a little over 8 hours a year (365days x .1% x24hour). The hourly labor repair rate is $105. This means you will be spending $840 ($105 x 8) a year on labor alone; this is not including parts. Usually, for every hour your vehicle stays in service the parts needed for repairing the vehicle is double the labor rate and would amount to $210. This means you will be buying $1,680 ($210 x 8) worth of parts a year. Your total expenditure at the service department could add up to $2,520 ($1680 + $840) per year. Keep in mind these figures are ONLY if your vehicle is 99.9% reliable. Also, in five years part prices and labor rates will increase which only puts a bigger squeeze on your wallet.

Well, what if you don't plan on keeping the vehicle for a long period of time? The fact is you won't need to with a VSC. In California, vehicle owners drive 1,500 to 1,800 miles a month on average. The standard finance period is 60 months; however, more and more owners are choosing longer terms. Not having a service contract while a vehicle is being financed is dangerous. A VSC is fully transferable, adding value to your vehicle's selling price while giving you peace of mind. It is a win-win situation! Why would anyone leave themselves subject to this type of risk? Can you afford not to have a vehicle service contract?

Come in and add a service contract within 90 days of your purchase to avoid an increase in premium. If you have any questions regarding coverage, price, eligibility, a policy tailored to your needs or how to signup, please call one of our finance managers here at Cars 911.