GMAC Insurance Poses Questions about Vehicle Service Contracts
by Steve Cypher on Thursday, July 23rd, 2009In a recent press release, GMAC Insurance offered five questions that every consumer should ask before purchasing a service contract.
Vehicle service contracts
At Auto Credit Express, we’ve always felt that one of the more important dealer “add-ons” to consider when buying a used vehicle with a bad credit car loan, or any kind of loan, for that matter, is a vehicle service contract – sometimes called a “VSC”.
The reasoning behind this is pretty straightforward. Purchasing this product is a way of ensuring that you won’t be faced with a catastrophic expense that you can’t afford. Especially for customers on a limited budget, any large additional expense could very well mean, in a worst case scenario, the difference between continuing to go to work, and parking the car and losing your job.
Insurer recommends checking out reputation and ease of use
But once you’ve made the decision to purchase one of these products, how can you be sure you’ll get the right one? In a recent press release, GMAC Insurance poses five questions you should ask before you purchase one.
“Purchasing a VSC can be significant investment, and every consumer needs to consider his or her own unique circumstances and expectations,” explained Tom Callahan, executive vice president of GMAC Insurance’s Dealer Products and Services group. “A VSC with a reputable company can more than make up for its cost by covering future vehicle expenses, as well as providing consumers with peace of mind.”
According to GMAC Insurance, here is what you should ask:
• Is the contract easy to understand? Read the coverage terms before you purchase the contract — the scope of coverage should be clearly stated in the body of the contract.
• Do the coverage terms and limits make sense for your personal situation? Every situation is unique, but consumers should consider how long they plan to keep their vehicles and their typical annual mileage; the amount of the deductible in event of loss; whether coverage includes normal wear and tear; and the cancellation and refund terms. Ask yourself if the price seems reasonable for the level of coverage you are getting. If it seems too good to be true, it probably is.
• Does the contract offer additional benefits? Some VSCs will cover repair expenses that go beyond just parts and labor by offering rental car coverage or reimbursing costs due to trip interruption.
• Who is providing the coverage? As a general rule, a VSC should provide the right to make a claim against a licensed insurance company that maintains proper financial reserves to pay those claims. Make sure you are dealing with a nationally recognized company that has demonstrated a long-term commitment to the product and their customers.
• Is it easy to receive coverage benefits? Is the repair process simple and convenient? Reputable VSC companies try to make the process of both purchasing and servicing the contract as easy for the consumer as possible. Consumers should investigate how claims are paid and if there are limitations on where vehicles can be repaired.
Auto Credit Express
At Auto Credit Express, our business is to help people with bad, blemished, bruised and tarnished credit buy cars and reestablish their credit at the same time. If you have any additional questions about vehicle service contracts or any other aspect of the bad credit car loan process, our web site has a number of resources that can assist you. It can also help you determine how much car you can afford and, unlike other sites, our toll free number is listed on every page in case you have any additional questions.
When you decide the time is right, our credit application can be filled out in the comfort and security of your own home. For more information, visit www.autocreditexpress.com.
Tags: bad credit, bad credit car loan, car loan, gmac, gmac insurance, service contract, vehicle service contract, vsc
