What You Should Know About a New Car Free Service Contract

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Most people like to buy a new car for three reasons. They like the new car smell. There is nothing that actually quite compares to it. Second, the buyer is looking for the updated features and status that comes with a new car. Third, people like the idea of a free service contract that covers the repair bills on a new car versus the high risk of unexpected costs with a used car.

What do you get with a new car’s free service contracts?

For many who are considering buying a new car for the first time, understanding what type of coverage that they can expect from this new car service contract is important. While not all new car warranties are the same, most follow a similar pattern with only the time frames being lengthened or shortened.

What can you expect during the first phase of the new car free service contract?

Most car manufacturers start off the new car owner’s experience with a twelve month or twelve thousand mile warranty. This free service contract covers nearly everything that can go wrong on the car from bumper to bumper until one of the conditions has been met. There are some exclusions on most of these service contracts. Items that carry a warranty from another company are excluded. This would be items like the battery and tires.

Sometimes routine car servicing is included during this first phase on the free service contract.

To bring people back to the dealership and promote goodwill, car companies and dealers will include free oil and filter changes up to a limit. This can run on the same time frame as the new car warranty, or it can be for a limited number of free services like 3 or 5. Some cars come with just time limit like during the first year.

The first phase of the free new car service contract fixes manufacturing defects.

One of the primary reasons car companies are so generous during the first phase of the service contract is that they realize that not all cars will come off of the assembly line with everything perfect. Small defects in parts can be missed. Pieces may not be put onto the vehicle securely. Although there are quality inspects performed, cars are complex, and things can be missed. Nearly all of these show up during the first few months of regular use of the car. The service contract covers break downs, but not accidents or other driver inflicted damage.

The second phase of the new car free service contract lasts for a longer time.

In this phase, the free service contract is limited on what it will actually cover. It is normally divided into two portions. One part of the contract covers the drive train (motor, transmission, differential, etc.). The second part covers the body against premature outer body rust through. This part of the free service contract can last up to 7 or 10 years. Often, 70,000 to 100,000 miles is the cutoff on the other side. Repairs may be thought of as free, but frequently the coverage is for parts and not labor, or only a portion of the labor is covered.

One of the downsides to the new car free service contracts is with the dealers.

Car manufacturers set aside a portion of a new car price for the minor warranty repairs. This money is awarded to the dealer that sells the car. This means that other dealers may not jump when you take your new car to them for service. This can be a problem if you purchased the new car at a dealer that is not convenient for your service work. You may find yourself having to drive many extra miles to take advantage of the free service contract.

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