Whether it’s a brand new SUV off the dealership lot or a previously-owned car from a used car company, purchasing a new-to-you vehicle can be both exciting and stressful. It’s exciting because you now have that new car, truck, or SUV to enjoy, but it’s also stressful because now you have to decide the best vehicle service contract (“extended auto warranty company”) to choose. You’ve just made a major purchase and you’re going to want to take care of it. A vehicle service contract can help you do that. The challenge? How do you decide which vehicle servicecontract  to choose? Here are some tips on what to consider and what to do before making a decision regarding the best vehicle service contract for you:

Deal with a VPA-certified company.

The Vehicle Protection Association is an industry trade association focused on protecting consumers from purchasing extended auto warranties from disreputable companies. Extended auto warranty companies who agree to abide by the Standards of Conduct established for the industry have undergone an extensive third-party compliance review. The association has a strong relationship with the Better Business Bureau. In fact, the Better Business Bureau implemented a Certification-Audit Program to further help you determine whether or not the company you are considering going with is not only a service contract vendor, but also is compliant with all the VPA standards. The industry now uses the phrasing “vehicle service contracts” and not “extended auto warranties”. Vendors who offer “warranties” to you are not adhering to the stringent VPA standards.

Ask questions.

Don’t make the same mistake many other car owners have done: don’t wait to ask your questions when you’re contacting the vendor because your vehicle suddenly needs repair. The time to ask all your questions is before you sign the contract, not when you’re stuck on the side of the road. Ask all the questions you have/want prior to agreeing to the terms.

Read contracts carefully.

While it may be laborious, take the time to peruse the contract in its entirety before you sign to it. This will give you the opportunity to highlight areas you don’t understand or aren’t sure about.

Don’t make major buying decisions in haste.

Take your time. If the representative you are communicating with is pressuring you to make a decision immediately, don’t. You took your time when shopping for your new vehicle, take your time now in deciding the best service contract for it.

Choose a company that is a member of the Better Business Bureau.

While there are certainly many reputable companies that operate without being a member of the BBB, those that are members add an unspoken level of integrity to their business credentials since not all companies who apply to the BBB are accepted. By being a member, the company agrees to operate at a high level of standards set forth by the BBB.

Do I get fries with that?

Find out exactly what comes with your service contract and what doesn’t. While a less expensive contract might be appealing for that reason alone, you might not get everything you had hoped for with the cheaper service. You need to be well aware of exactly what the vehicle service contract covers. Often companies will make the contracts seem like a panacea and cure-all for your vehicle repair issues; however, it may be just the opposite. The normal parts that will break and or wear out (also known as wear and tear parts), are typically never covered by the less expensive options for vehicle service contracts. Like insurance, coverage of most extended warranties come in tiers. For example, three tiers are often silver, gold, and platinum members; silver is the cheapest and platinum is the most expensive. The most expensive always comes with the highest level of coverage.

A cheap contract is just that ~ cheap. If the vehicle you just purchased or are considering purchasing is a used vehicle, sometimes paying for a quick repair could be much cheaper than buying the vehicle service contract. The “basic’ menu of services on a less expensive contract may also mean more expensive in the long run. A cheaper contract often comes with a higher deductible; if the deductible is more than what the repair costs would be, then buying the service contract may not be worth it. Whatever the cost of the service contract, sometimes you’re obligated to pay the cost of the covered service first and then the vendor will reimburse you at a later date.

References, referrals, & other happy campers.

What do previous customers write, say, and share online (and in your local grocery store line) about the experiences they’ve had with the vehicle service contract you are considering? No matter how much a company advertises, offers specials, or sends out mailers, the absolute best and (typically) most forthright form of advertising is via word of mouth. By taking the time to read reviews (the raves and the rants) of other customers regarding their personal experiences with the vehicle services company, you’ll be better equipped to make a more-informed and confident decision. You’ll get a unique insight into how the company operates, how they handle customers, and how they fare in their customer service skills. Ask the company for referrals. If they say they’re not at liberty to disclose that personal information about their customers, suggest they give your name and phone number to three of their clients. Most customers who are satisfied with a service are happy to share their experience with others (as are clients who weren’t so happy with the service!)

Planning on keeping the car?

Financial and information managers (F&I) work with customers on the paper work which includes the extended-warranty offer. F&I managers will often ask “How long are you planning on keeping the car?” This is a significant question to think about and know the answer to, for it may answer the next question, “Are you interested in the extended-warranty option?” If the car is only meant to drive for a few years, an extended-ten year warranty is out of the question. On the other hand, if the car will be driven for a decade, an additional vehicle service contract is worth consideration.

Been here long?

When purchasing a car, many dealerships offer third-party warranties. These third-parties have varying track records as well as different lengths of establishment; hence, it is important to figure out whether or not they are a newer or older company prior to signing any contracts. Experience is the key ingredient in choosing a company. New vendors are trying to become established and are reliant on profits. Companies that have been around are able to offer package deals and bundle; thus, these companies offer more value to the dollar.

Need a magnifying glass to read between the (fine) lines?

It is vital to find out exactly what the extended warranty covers. Some warranties state they only cover the interior engine and only if the consumer receives an oil change in either three months or 4k miles, whichever comes first. All of these specifications are vital, for no one wants to find out that due to missing an oil change their extended-warranty is null and void.