Should you buy prepaid maintenance?

Prepaid maintenance plans can be big savings if your regular maintenance is expensive. This may be especially true in today’s automotive market, where larger vehicles that rely on synthetic oil can command higher prices. But should you opt for prepaid maintenance, or is it an additional service worth skipping?

How does prepaid maintenance work?

Prepaid maintenance plans are a dealer added service that includes the cost of regular trips to the service center. Programs like this and other services like GAP insurance and extended warranties are usually offered to you by the finance and insurance manager, towards the end of your loan process, before you sign the documents. final.

These programs offer regular maintenance, such as oil changes and tire rotations, on a prepaid basis. Your maintenance will then be included in the cost of your loan, and you won’t have to worry about paying for services out of pocket when you do them at the dealership you purchased from.

When prepaid maintenance services are built into the cost of your loan and you have them on a pay-as-you-go basis. For example, if your service includes an oil change every six months and you don’t go, you’re paying for a service you didn’t get. Or, if you’re not in the area of ​​your authorized service center when you need an oil change, you might have to pay someone else to do it anyway.

Of course, plans and coverage differ depending on who supports them. Plans offered by your dealer tend to be more rigid, only allowing service at a specific dealer or group of dealers. Plans offered by the manufacturer can be more versatile, allowing you to get serviced at any franchised dealership across the country.

A disadvantage of prepaid maintenance is that the cost is built into your loan, which means it increases your monthly payment amount and increases your overall loan amount. That could add up to a lot more than you bargained for in interest charges, especially if you’re a bad credit borrower who qualifies for higher interest rates.

Is prepaid maintenance a good idea?

Prepaid servicing may be a good idea for some borrowers. If you’re not one to remember what to do with your car or you’re not one to keep a good schedule, having scheduled service built into your loan could help. to remind you to have your car serviced regularly.

On the other hand, the price of prepaid plans can get steep when you factor in the extra interest charges you pay. In this case, paying out-of-pocket for your maintenance as needed makes more sense, especially if you have a high interest rate.

If you’re looking for extra peace of mind, know that a prepaid maintenance plan is not the same as an extended warranty that might fix unexpected issues. Prepaid maintenance is only for basic services such as oil changes, fluid fills and tire rotations. All things that are normally done at the same time, and don’t cover anything extra you might need.

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