What is an extended service agreement?

An extended warranty, sometimes called a service agreement, a service contract, or a maintenance agreement, is a prolonged warranty offered to consumers in addition to the standard warranty on new items. The extended warranty may be offered by the warranty administrator, the retailer or the manufacturer.

Is Extended service contract Worth It?

When it comes to the long-term cost of your car, extended warranties are generally “a bad deal,” says Gillis. In a Consumer Reports survey, 55% of people who purchased an extended warranty never touched it. Among those who did use the warranty, most saved less on repairs than they paid for the contract.

Can I cancel my extended service contract?

Some warranty providers stipulate a strict time period, usually between 30 and 60 days, in which you are allowed to cancel your extended warranty without being charged any fees. However, even in this case, you should still be able to cancel your warranty unless your contract explicitly states otherwise.

What is the difference between an extended warranty and a service contract?

The main difference is that warranties are included in the purchase price and service contracts cost extra. Service contracts, also known as extended-warranties, can vary greatly and may not be worth the extra money.

What are the benefits of extended warranty?

An extended warranty helps by providing warranty coverage beyond the warranty tenure to help maintain the vehicle for a longer period. An extended warranty or vehicle protection plan helps to keep the vehicle running smoothly and hassle-free.

What are the disadvantages of an extended warranty?

Con: Extended warranty plans don’t cover everything. Some consumers buy an extended warranty plan without reading the details of the plan and are caught off-guard when a needed repair is not covered by their extended car warranty.

Are extended warranties a waste of money?

Extended warranties are rarely worth your money. Products don’t break on their own, and when they do, the price of repairs is usually lower than what you’d spend on an extended warranty. Sure, some people have saved a lot of money with extended warranties.

Do you get money back from extended warranty?

How to get your money back. You can cancel an extended warranty at any time and you’ll get a prorated refund for the unused portion of your policy. If the warranty was included in your loan, your car payment won’t drop, but you may pay off the car sooner after the refund is deducted from your balance.