VSC Review Guide
Making an informed decision about your vehicle service contract (VSC) purchase can be easy if you ask important questions to assist you in choosing the coverage and company that’s right for you. The following questions are a guide to help you obtain a basic understanding of the contract you’re considering and what you can expect from your protection.
How much does my VSC Cost?
Cost may be one of the most important factors when considering a vehicle service contract. Make sure the coverage is adequate, what you expect, and within your budget. Analyze your projected budget and your most important investments and expenses. Consider that labor rates have risen by an average of $20 per hour in the past 3 years. A vehicle service contract helps to offset rising repair costs at an affordable price by protecting your vehicle against tomorrow’s repair bills at today’s prices. Often consumers find that more coverage and upfront cost now can save thousands of dollars in repair costs down the road, while providing a sense of security that only quality coverage can.
How long does my VSC last?
Understanding how long your coverage lasts is another important factor in making an informed decision. Consider how much driving you do now and plan to do in the future, and make sure the mileage and term you choose meets your needs.
What does my VSC cover (or not cover)?
Understanding what is covered is important, but equally important is understanding what is not covered. This question may influence which contract you purchase based on what types of repairs you’re willing to pay out of pocket for in the future. Remember that unlike an insurance policy that covers you and your vehicle in case of an accident, vehicle service contract coverage is designed to cover mechanical breakdown or failure.
What are the Terms and Conditions of my VSC?
Never purchase a vehicle service contract from a company that will not provide a copy of the terms and conditions of the contract. Likewise, you should never need a legal degree to understand your coverage. Make sure you understand your contract’s coverage, the administrator’s obligations, and your obligations, such as vehicle maintenance or claim authorization.
What kind of replacement parts will my VSC ensure are used?
Many vehicle service contracts include information contained in its terms and conditions concerning parts sourcing. A company may source new parts, like-new parts or reconditioned parts. In some cases where these are not easily obtainable, high-quality used parts may be substituted. Although these parts are very often just as operationally superior as a brand new part, it’s important that you review how your contract sources parts and decide if the use of alternative parts would be a cause of concern for you.
Who handles claims on my VSC?
Knowing who will be administering your service contract can give you insight into the potential weaknesses of the coverage you’re considering and the company’s ability to pay claims. Administrators act as claims adjusters, authorizing the payment of claims to the service repair facility under the contract terms – so make sure they have the financial resources to meet their obligations under your contract. The ultimate measure of an administrative company is ensuring that your claims are paid quickly and easily. Find out how long the company has been in business, their financial strength, their standing with consumer organizations, if they are rated by the Better Business Bureau, and if they are backed by an insurer.
Who backs my VSC?
Find out if your vehicle service contract and administrator are backed by an insurer. Typically, a “claims reserve account” with a separate insurer is maintained to cover consumers with contracts should the administrative company fail. If the company is insured by a separate entity, research their financial strength, how long they’ve been in business, and their rating through companies such as AM Best.