Tips from the industry experts should help even those car buyers with credit issues understand in what ways used and new car service contracts can help them
Understanding New and Used Car Service Contracts
Getting your questions answered

Consumers, especially those on tight budgets and with less than perfect credit, are particularly at risk for being blindsided by unforeseen vehicle expenses in situations that, in many instances, could benefit from an auto service contract.

At Auto Credit Express we are very familiar with this situation because, for over two decades, we've been helping car shoppers with low FICO scores find dealers for their best opportunities at approved car loans.

And while today's discussion of car service contracts (sometimes mistakenly called an "extended warranty") is being brought to you by the Service Contract Industry Council (representing the industry that offers them), the SCIC article does present some very valid points.


In a press release issued not that long ago the Service Contract Industry Council offered some guidance for consumers thinking of purchasing an auto service contract for either a new or used car. Here are some excerpts:

New cars

Why should I buy a service contract if a car comes with a manufacturer's warranty?

1. There are over 10,000 components on a vehicle; a manufacturer's warranty covers only a fraction of these parts.
2. A manufacturer's warranty does not cover steering, electrical, suspension, air conditioning, heating, fuel systems, brakes, and convenience packages such as a navigation system.
3. Manufacturers' warranties are based upon defects in material and workmanship and do not cover normal wear-and-tear.

What does an automobile extended warranty typically include?

1. Comprehensive bumper-to-bumper coverage, including the exhaust system, electrical system, the engine, gas tank, the heater and air conditioner, normal wear and tear, the leather seats and the sunroof, etc.
2. Regular maintenance
3. Access to pre-qualified, professional auto technicians
4. Twenty-four hour technical assistance
5. Roadside assistance such as towing

Used cars

Should I Buy an extended warranty for a used car?

• Buyers of used motor vehicles need the protections offered by extended vehicle warranties for essentially the same reason that new cars buyers do – to cover repairs not included in a manufacturer's limited warranty and to continue protection after the warranty runs out.
• Extended warranties are not insurance.  Most dealers offer minimal coverage (at least 30 days) for used vehicles to cover basic repairs but you are responsible for purchasing an extended warranty if you want to cover the cost of repairs beyond any manufacturer's warranty.
• There are only a few comprehensive warranty programs that will cover the full cost of repairs on your used vehicle.  Some of those programs have a high deductible that requires you to pay for a portion of the work upfront.

As we see it

Successfully completing the high risk car loans process involves keeping your car in running order. By purchasing a service contract if and when it makes sense and following the tips outlined above you'll a better chance of that occurring.

Another tip: research warranty prices before purchasing one. That way you'll know if the price the dealer quotes you is fair.

One more thing: Auto Credit Express specializes in matching applicants with new car dealers that can offer them their best opportunities for car loan approvals.

So if you're ready to begin reestablishing your car credit, you can begin now by filling out our online auto loans application.