Vehicle Service Contracts

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Vehicle Service Contracts

A Brief Description of Vehicle Service Contracts

When you purchase a new vehicle, there is a warranty provided by the car manufacturer. If there are any repairs required for your car during this warranty period, it is provided to you at no extra cost. However, when the warranty period expires, you have to bear the cost of repair, which could be very expensive. In such cases, car owners should enter such service contracts with automobile servicing agencies.

Primus care vehicle service contracts provide different types of coverage, depending on the contract chosen. You need to check the various packages provided and choose the one that suits you.

The best way to find the right service provider by checking their online reviews. If you check the Zurich vehicle service contract reviews, you find that making a claim with Zurich is very convenient, and they have different packages like Powertrain, Standard, or Comprehensive for different customers. It is also important for the customer to go for certified vendors like vehicle assurance vehicle service contracts, which come with an assurance of quality services.

With extended vehicle service contracts, the cost of repairs, taxes, labor, and parts are taken care of when the manufacturer’s warranty period is over. There is a fee payable for such contracts, and they provide coverage for a specified period of time.

Who Takes Vehicle Service Contracts

For a vehicle owner, the cost of repairs becomes very prohibitive once the manufacturer’s warranty expires. It is during such cases that a service contract is important. The other party to the contract is the service provider who takes care of repairs and replacement of parts, for which there is a fixed charge for a certain duration.

Are Vehicle Service Contracts Worth It

Yes, it is certainly advisable to enter into such contracts because it provides protection against expensive and unexpected repairs, as well as routine repairs. It covers the cost of spare parts and labor, which would be very costly without the contract.

However, it is also important that the customer or car owner understands his or her responsibilities towards maintaining the car. If the instructions of the vendor in maintaining the car are not followed, the claims will not be entertained, and the car owner cannot take any legal action against the vendor.

Purpose of Vehicle Service Contracts

Repairs and maintenance form a major part of the costs of owning a vehicle. Incidentally, these costs are incurred more frequently after the manufacturer’s warranty period is over. Apart from routine maintenance costs, there are some unexpected repairs that are extremely expensive and could make it difficult to own a vehicle.

With such contracts, you pay a fixed fee for labor charges, repairs, and spare parts. The entire responsibility of the maintenance of your vehicle is taken over by the service provider. This extends the life of your vehicle, and you enjoy the benefit of a vehicle in good condition over a longer period of time. You can go online to find the best contracts and decide the one you need, depending on the age and model of your vehicle.

Contents of Vehicle Service Contracts

A standard contract for vehicle services would contain the following information:

  • Customer information including name, address, and email ID
  • The purchase date of the vehicle and the contract
  • The odometer reading on the date of purchase
  • The term of the contract
  • The vehicle identification number
  • The details of the selling dealer
  • The deductible provided for every visit
  • Maintenance to be carried out by the owner, failing which the coverage will not be provided
  • Customer support number for reporting any repairs required, or breakdown
  • The particular plan opted for and the coverage available under the plan

How to Draft Vehicle Service Contracts

While drafting such contracts, it is important to keep the following points in mind:

  • The state in which this contract is being drafted and the applicable laws relating to such contracts
  • The rights and obligations of the vehicle service provider and the owner
  • Space should be reserved for signatures of both parties
  • Settlement of claims: The jurisdiction, and whether arbitration or litigation will be used
  • Exclusions in the contract: Services that are not included
  • Benefits to be provided: The limits in monetary terms of the benefits
  • Surcharge applicable if the vehicle is being used commercially
  • The plan is chosen by the car owner and the coverage provided under the plan
  • The details of the claim filing process
  • The procedure to be followed for cancellation of the contract

Negotiation Strategy

For a car owner, it is important to study these contract reviews before entering into these contracts. The car owner should provide the services required from the vendor that he or she has shortlisted and then negotiate the contract price depending on the coverage provided.

Benefits & Drawbacks of Vehicle Service Contracts

The benefits of these contracts are as under:

  • Protection of interest: The interests of both the car owner and the service provider are protected under the contract. Both parties are aware of their rights and obligations. The car owner gets quality service and the service provider, a fee
  • Cost benefits: The owner saves money on expensive spare parts and labor costs. 
  • Better maintenance: The owner needs to maintain the car as instructed in the service contract to avail benefits

Here are the drawbacks of these contracts:

  • Without a service contract, the owner would have to spend heavily on costly repairs and hourly labor charges
  • Owning a car would become unaffordable due to expensive repairs and poor performance of the car due to irregular maintenance

What Happens in Case of Violation?

In case of violation of this agreement, the injured party can claim damages from the other party. If the car owner fails to meet the maintenance requirements laid down by the service provider, the contract will be canceled, and there will be no further obligation on the part of the service provider.

If there is any damage to the vehicle due to wilful negligence on the part of the service provider, either in terms of inferior spare parts or poor repairs, then the vehicle owner has the right to claim monetary damages from the service vendor depending on the extent of losses.

In order to ensure that maintaining your car over the long term is affordable, these contracts are important. It is important for both parties to follow the car maintenance instructions, understand the coverage provided by the plan that has been chosen, and the exclusions(1). The car owner should follow the procedure laid down by the vendor for the settlement of claims. Otherwise, the claim will be rejected. Both parties need to read the terms and conditions of the contract before signing it.