More than ever before, car buyers are purchasing vehicle service contracts to help prepare for the unexpected and save money on expensive repairs.
The Service Contract Industry Council (SCIC) estimates that consumers bought more than 10 million vehicle service contracts in 2012 for both new and used vehicles. Those service contracts covered 95 percent of annual claims filed, including repairs necessary due to normal wear and tear,Warrantech providing coverage and beyond a traditional manufacturer’s warranty.
An increasingly popular choice due to the rise in car repair costs, the SCIC points out that vehicle service contracts offer value and predictability by protecting the vehicle well after the manufacturer’s warranty expires. A vehicle service contract also offers additional coverage that isn’t offered in the original equipment manufacturer’s warranty.
“The new technologies and complex components in today’s motor vehicles put consumers at greater risk for big out-of-pocket repair costs than ever before,” said Timothy Meenan, SCIC executive director. “Service contracts help consumers better deal with the unexpected, so they don’t have to worry when expensive unforeseen repairs are needed.”
The SCIC adds that today’s vehicles are made up of more than 10,000 components, yet the standard powertrain warranty covers only a fraction of them. The average new car has six to 20 computers that control everything from fuel injection and antilock brakes to airbag deployment. Those systems can be expensive to repair, due to both the high cost of parts and labor costs that can run as high as $250 an hour for specialized repairs on luxury vehicles.
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