Should I get a prepaid maintenance plan for my car? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make better financial decisions by providing you with financial calculators and interactive tools that provide objective and original content. This allows users to conduct studies and compare information for free to help you make sound financial decisions. Bankrate has partnerships with issuers, including but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The offers that appear on this site are from companies that pay us. This compensation may impact how and when products are featured on this website, for example, for example, the sequence in which they appear within the listing categories, except where prohibited by law for our mortgage and home equity products, as well as other products for home loans. However, this compensation will affect the content we publish or the reviews you read on this site. We do not cover the vast array of companies or financial offerings that could be available to you. SHARE: Westend61/Getty Images
3 min read Read Published 13 March 2023
Writer: Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in helping readers with the ways and pitfalls of borrowing money to purchase a car. Edited by Helen Wilbers Edited by Helen Wilbers Editing for Bankrate since late 2022. He values clear reporting that helps readers easily land deals and make the most appropriate choices regarding their finances. He specializes in small and auto loans. The Bankrate guarantee
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This compensation could influence the manner, place and in what order items appear within listing categories in the event that they are not permitted by law. We also offer mortgage home equity, mortgage and other home loan products. Other factors, such as our own website rules and whether or not a product is available within your area or at your personal credit score may also influence the way and place products are listed on this site. While we strive to provide the most diverse selection of products, Bankrate does not include details about each financial or credit item or service. Dealerships offer prepaid auto maintenance plans like extended warranties, credit insurance, as well as anti-theft tools. These aren’t necessarily an excellent deal. But the most effective way to determine whether a prepaid maintenance program is the best option is to research expected maintenance costs — then evaluate them against the price you’re being offered. If you’re looking to include the prepaid maintenance plan to your auto loan, it may make more sense to keep a savings account for where you earn, not paying interest. What is a prepay car maintenance plan? Prepaid car maintenance plans provide regular and planned maintenance. In contrast to other plans, they provide preventative maintenance such as tire rotations and . The warranty of the manufacturer or extended warranty may provide for unexpected repairs. Prepaid maintenance plans may be considered when you purchase a new vehicle that doesn’t include scheduled car maintenance into the retail price , or when the manufacturer no longer covers. In either case, make certain to inquire if the offered plan can be used at an independent mechanic’s shop , or when it’s limited to servicing in the dealer. A lot of these plans will only permit service at the dealer selling the plan which limits your options for future maintenance. Depending on the prepaid maintenance plan you are considering, maintenance may be restricted to certain intervals (for example, oil changes only being covered at intervals of 10,000 miles). Certain prepaid plans offer services once a calendar year, or every six months, which means that based on how much you travel, you could require additional maintenance that is paid for the car. Many manufacturers, such as Jaguar, Toyota, BMW, Volvo, MINI and Land Rover — offer pre-paid maintenance plans. Certain of these plans also cover wear and tear items like windshield wiper blades or brake pads. However, some don’t, so it’s important to do your research prior to heading to the showroom. Are these maintenance plans worth the cost? Like many aspects of the car-buying process, doing the math before meeting with the dealer is key to getting the most value for money. Examine the cost of the insurance plan against the estimated cost of the cost of the scheduled or out-of-pocket expenses for the period covered. The owner’s manual will list the types of maintenance you’ll need as well as the time you’ll require it. Contact the service manager of your dealer and request an overview of the scheduled maintenance expenses. It is also worth considering the costs of maintenance, insurance, and other expenses. If the estimated cost for regular maintenance of your new car’s first 30,000 miles is $400 and you are paying $800 for the plan, then a prepay maintenance plan for your car is not worth the money. If you’re willing to pay 250 for the program you will save money. It is possible to find a balance, but remember: If you include the prepaid maintenance plan as part of the loan, calculate how much you’ll be paying in interest along with the flat maintenance cost to estimate the total price. Pros and cons of plan to maintain your car prepaid Don’t simply sign up to the prepaid maintenance plan. Before you set foot in a dealership, know the expected maintenance costs for the cars you’re interested in. And keep this list of pros and cons while you negotiate. The benefits of covered services are that they are locked in and not changed by inflation. You may be able to transfer the plan when you sell the vehicle. Residual value on leased vehicles may increase with a prepaid maintenance plan. Costs prepaid can be discounted in comparison to regular maintenance costs. Manufacturer-backed plans are generally provided by affiliated dealerships regardless of location. Cons Service intervals may not be as specified in the owner’s manual. Prepaid maintenance plans can be more expensive than the actual expense of maintaining. In many cases, you must get fixed at the place that you bought your car from. Common wear-and-tear items are generally not covered. Some insurance plans may include coverage that’s redundant or is already covered by an extended warranties. The bottom line: Prepaid maintenance plans are negotiable -therefore don’t be content to agree to the price that is offered by the dealership’s finance office. If you’re aware of the costs of regular maintenance, you’ll be able to plan ahead and avoid the stress of deciding when and where to take your vehicle. However, it’s not the most ideal option for those who already have a trusted mechanic or body shop or are not planning to remain within the region where you bought the vehicle. Also, if you include a prepaid maintenance plan into your auto loan, you could pay more interest than the maintenance will be worth. Be aware of your loan’s interest rate and do not hesitate to . To determine whether a prepaid maintenance plan can benefit you, make the effort to research expected costs and compare it to what the dealership offers.
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The article was written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers in navigating the ins and outs of securely taking out loans to purchase cars. Edited by Helen Wilbers Edited by Helen Wilbers has been editing for Bankrate since the end of 2022. He is a firm believer in clear reporting that helps readers successfully land deals and make the best choices for their finances. He is a specialist in auto and small business loans. Similar Articles: Auto Loans 5 minutes read in Mar 03, 2023 Auto 6 min read Mar 02 2023 Automobile Loans 3 min read October 13 2022 Automobile Loans 4 min read August 22 2022
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