Provida Group - Driven to Provide Protection

Fact or Fiction - Common Myths

There are so many different kinds, types, and levels of vehicle service contracts, that it can be hard to separate rumor from truth. We've taken a couple of the most popular myths and given you the straight answer so you can make your purchase with greater confidence.

MYTH -

You can only buy a vehicle service contract from the dealer that sold the car.

FACT -

You have many choices in buying a vehicle service contracts. Yes, dealers are one source; but they're not the only source. Dealers may also be driven by sales or commissions goals which may keep them from being objective or offering the best coverage to fit your needs. Make sure you look for the most complete, reliable coverage at the fairest price, no matter who is selling it.

MYTH -

All vehicle service contracts are basically the same; just get the cheapest.

FACT -

There are hundreds of different types of service contracts. Some are better than others. The only way to know how much you're getting for your money is to review the actual contract. If a company won't let you see the contract, or includes questionable contract clauses, it doesn't matter what the price is. Walk away.

Some "red flag" contract language:
- At the sole discretion of the Administrator
- Parts may be used or recycled
- Vehicles must be maintained according to severe requirements of manufacturer (this can double your maintenance costs)
- Any covered part that has not failed (you want coverage for parts that fail, too)
- Gradual reduction in operating performance not covered

MYTH -

I don't need to buy a vehicle service contract until my manufacturer's warranty expires.

FACT -

The newer your vehicle, the lower your rates will be. Contrary to popular belief, you will not end up with double coverage if you purchase a vehicle service contract before your manufacturer's warranty expires. You are simply locking in the costs and rates now and protecting against increases in the future. Your vehicle service contract can be set up to begin as soon as your manufacturer warranty ends, without having to watch the odometer like a hawk. You can also enjoy a much lower cost and additional features like roadside assistance until your service contract goes into effect.

MYTH -

You must purchase a vehicle service contract at the time of purchase in order to qualify for dealer financing.

FACT -

Qualifying for financing has nothing to do with buying add-ons or vehicle service contract coverage. It has everything to do with the purchase price of the vehicle, your down payment or trade, and your credit score. There is no way that adding to the price of your purchase will increase your likelihood of being approved.

MYTH -

A "mechanical breakdown" contract offers the same coverage as a "wear and tear" contract.

FACT -

The best vehicle service contracts offer both types of coverage. However, if you must choose one or the other, wear-and-tear plans provide a higher level of protection. Many service contracts define "mechanical breakdowns" as defective parts or workmanship. Wear and tear however, includes parts that were correctly made or installed but just wore out due to repeated use. The older your vehicle is, the more important wear and tear coverage becomes.

MYTH -

Vehicle service contracts mean you never have to worry about a vehicle.

FACT -

Whether it's a manufacturer warranty or a vehicle service contract, you're still expected to care for your vehicle and provide proper maintenance like regular oil changes and the like. If you haven't been caring for your vehicle as outlined in the owner's manual your vehicle may end up with a lot of problems that may not be covered by your plan. Be sure not only to do the routine upkeep on your vehicle, but also to keep accurate maintenance records and receipts.

MYTH -

Some dealers don't accept third party vehicle service contracts for repairs.

FACT -

As long as the repair facility will receive prompt payment when repairs are completed, it is unlikely they will refuse that service contract. In fact, it's not unusual for the dealership's vehicle service contract plan to be from a third-party provider as well. A provider with a strong payment history is likely to be accepted at nearly any reputable repair facility.