Should I purchase a prepay maintenance plan for my vehicle? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make smarter financial decisions by offering interactive tools and financial calculators as well as publishing authentic and objective content. This allows you to conduct research and compare data for free – so that you can make sound financial decisions. Bankrate has agreements with issuers, including but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make money The products that appear on this site are from companies that pay us. This compensation could affect how and when products are featured on this site, including, for example, the order in which they be listed within the categories of listing in the event that they are not permitted by law. This applies to our mortgage, home equity and other home loan products. But this compensation does have no impact on the information we provide, or the reviews that you see on this site. We do not include the entire universe of businesses or financial offers that may be accessible to you. SHARE: Westend61/Getty Images

3 min read Published 13 March 2023

Writer: Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers with the details of borrowing money to buy a car. Edited by Helen Wilbers Edited by Helen Wilbers Editing for Bankrate since the end of 2022. He is a firm believer in transparent reports that help readers easily get deals and make best choices for their finances. He is a specialist in small and auto loans. The Bankrate guarantee

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This compensation could impact how, where and in what order items are listed and categories, unless it is prohibited by law. This is the case for our mortgage, home equity and other home lending products. Other elements, such as our own rules for our website and whether or not a product is available within the area you reside in or is within your own personal credit score could also affect the way and place products are listed on this site. Although we try to provide an array of offers, Bankrate does not include information about each financial or credit item or service. Dealerships can offer prepaid car maintenance plans such as warranty extensions, insurance for credit, as well as anti-theft devices. They are not necessarily an ideal deal. The best way to decide whether a prepaid maintenance program is the right choice is to research expected maintenance costs and examine them against the cost you’re being offered. If you’re looking to include the prepaid maintenance plan your auto loan, it may make more sense to save a savings account for where you earn, not paying interest. What is a prepay car maintenance plan? Prepaid car maintenance plans are contracts that cover scheduled and expected maintenance. Unlike , they only pay for preventative maintenance, such as tire rotations and . The warranty provided by the manufacturer or extended warranty will still be able to cover any the unexpected repair. A prepaid maintenance plan may enter the discussion when buying an automobile that does not include scheduled car maintenance into the price of purchase or in the event that the manufacturer’s warranty is no longer valid. Whatever the case, you should be sure to ask whether the offered plan can be used at an independent mechanic’s workshop or if it is limited to services at the dealership. Some plans allow service at the selling dealership, limiting the options you have for maintenance in the future. In the case of the prepaid maintenance plan you are considering, maintenance might be limited to specific intervals (for example, oil changes only being covered each 10,000 mile). Certain prepaid plans offer services once a calendar year or every six months, which means that based on how much you travel, you could require additional maintenance paid for the vehicle. Many manufacturers, including Jaguar, Toyota, BMW, Volvo, MINI and Land Rover — offer Prepaid maintenance plans. Some of these factory plans also cover wear and tear items like windshield wiper blades or brake pads, however certain plans don’t. It’s critical to research before heading to the dealership. Are prepaid maintenance plans worth the cost? As with most aspects of the car-buying process making the calculations prior to going to the dealer is essential to making savings. Examine the cost of the plan with the estimated cost of the cost of the scheduled or out-of-pocket expenses for the period covered. Your owner’s manual should list the types of maintenance you’ll need as well as the time you’ll require it. Contact the dealer’s service manager and request an overview of the scheduled maintenance expenses. Also, you can consider the costs of maintenance, insurance, and other expenses. If the estimated cost for regular maintenance of your new vehicle for the first 30000 miles is $400, and you’re paying $880 for the service, a prepay car maintenance plan is ultimately not worth it. If you’re willing to pay $250 for the plan, you will save money. You could make a deal, but keep in mind: If you include the plan for prepaid maintenance as part of your loan, calculate how much you’ll have to pay in interest in addition to the flat maintenance cost to figure out the full cost. There are pros and cons to prepaid car maintenance plans Do not just sign up for an prepaid maintenance program. Before you step foot into a dealership, know the maintenance fees expected for the vehicles you’re considering. And keep these pros and cons in mind as you make a deal. Pros Costs for covered services are fixed and cannot be increase due to inflation. It is possible to transfer the plan when you decide to sell your vehicle. The value of the residual on vehicles leased may increase with a prepaid maintenance plan. Costs prepaid can be discounted when compared to the normal maintenance cost. Plans that are backed by the manufacturer are typically provided by affiliated dealerships regardless of location. Cons Service intervals may not correspond to those in the owner’s manual. Prepaid maintenance plans can be more expensive than the actual price of maintenance. In many instances, you will need to get repaired at the dealer which you bought the vehicle from. Common wear-and-tear items are generally not covered. May include coverage that is redundant or is already covered by an the extended warranty. The bottom line Prepaid maintenance plans are negotiable — so don’t just agree to the price offered by the finance department of the dealership. If you’re aware of the cost of regular maintenance, you’ll be able to plan ahead and avoid the stress of deciding when and where to drive your vehicle. It’s not the most ideal option when you already have a reliable mechanic or body shop , or are not planning to remain in the same area that you bought the vehicle. Also, if you include a prepaid maintenance plan into your auto loan, you could pay more interest than the maintenance is worth. Be mindful of your loan’s interest rate and do not hesitate to . To determine if a prepaid maintenance plan will benefit you, make the effort to research expected costs and compare it to what the dealership provides.


Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers in navigating the ins and outs of securely borrowing money to buy a car. Edited by Helen Wilbers Edited by Helen Wilbers Editing for Bankrate from late 2022. He is a firm believer in the clarity of reporting that can help readers confidently get deals and make most informed decisions regarding their finances. He specializes in small and auto loans. Similar Articles: Auto Loans 5 minutes read March 03, 2023 Auto 6 min read March 02 2023 auto Loans 3 min read October 13, 2022 Automobile Loans 4 min read August 22, 2022

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