As consumers including those with damaged credit hold onto their vehicles even longer the Service Contract Industry Council reminds us that this is one more reason to consider one even if that auto loan is paid off
What we know
Here at Auto Credit Express we've always felt that a service contract was one of the better dealer backend products for borrowers with problem credit, especially if they're financing a used car with a high-risk auto loan. But a recent article from the Service Contract Industry Council which includes a number buying tips also points out another reason why purchasing one might be a good idea.
So we thought we'd pass this information along to those consumers with bad credit currently searching for online car loans. Because in addition to helping these buyers find dealers for their best opportunities for car loan approvals, we'd also like them to successfully complete the credit repair process.
SCIC service contract tips
Here is what the article had to say:
In the aftermath of the Great Recession, American motorists are hanging onto their cars longer – and with the rising cost of repairs to keep those vehicles on the road, the Service Contract Industry Council (SCIC) says there's never been more reason to get a service contract and dramatically reduce repair costs.
According to an analysis released earlier this month by the automotive research group Polk, consumers on average now keep their cars a record 11.4 years, up 15 percent since 2007. At the same time, a separate report from the car repair site CarMD says car repair costs rose 10 percent last year.
The most common car components needing repair include the electrical, air conditioning, cooling and fuel, steering and engine systems. With costs of these repairs often ranging from a few hundred to several thousand dollars, the extended protection of a service contract can greatly reduce out-of-pocket expenses.
Pocket buying guide
In addition to these insights, the SCIC is also offering a downloadable and printable pocket guide. On it is the following information:
Consumer Tips: Vehicle Service Contract Pocket Buying Guide
Questions to ask when considering purchasing a vehicle service contract
1. What does the service contract cover and when does the coverage begin?
2. How do I make a claim? Will I need authorization before repairs are performed? Is there a deductible?
3. Does the contract provide for a rental car while repairs are being made?
4. Does the contract provide for roadside assistance when a breakdown occurs?
5. Is there a money-back "free look" option?
6. Can I purchase enhanced coverage options for additional protection for my vehicle?
7. Is my contract cancellable and if so, how do I cancel and how much money will be refunded to me?
The guide can be downloaded at this web address: http://go-scic.com/insidepages/news.cfm?newsid=6D5258D0-6E4C-4C0A-AB43-A880AEEE317C
The Bottom Line
From what we have seen over the past two decades one key to successfully completing a higher-risk car loan is the ability to keep a vehicle in running order. In many cases, a service contract can help borrowers on a tight budget avoid unforeseen expenses while keeping their credit repair plans on track. I could be an even bigger help if they plan on holding on to their vehicle once it's paid off.
One more tip: Auto Credit Express matches consumers that have experienced car credit issues with dealers that can offer them their best chances for approved car loans.
So if you're ready to establish your auto credit, you can begin now by filling out our online car loan application.