When purchasing a new car, the buyer often receives the option of a pre-paid car care plan of some sort. These plans are sometimes complicated and intimidating. However, if you research them properly and agree on favourable terms, they can be financially beneficial in the long run.
Service Plan Overview
A service plan, as well as a maintenance plan, is separate from a warranty. While a warranty covers manufacturing errors and failures, a service plan focuses on specific scheduled vehicle services generally within the first few years of purchase. Car manufacturers sell service plans, and they cover the most basic of car care services with monthly payments instead of instant costs. Each service plan is slightly different, but in general cover some of all of the following: fluids such as brake fluid, coolant, oil, transmission fluid and gearbox oil; all filters including oil, fuel, pollen and air; spark plugs; tyre rotations and cam belts.
Service plans do not cover complex wear and tear instances such as with brakes, engine breakdowns or clutch failures. Service plans start when you purchase the car and last for a pre-determined number of years or kilometres. In general, the lengths are near three years and 100 000 kilometres.
Service Plan Pros
The greatest benefit to having a service plan is the relief of worry. If any covered problems arise, the owner can simply drive into the dealer's shop and get them fixed having already paid for them. Service plans are transferable if the owner decides to sell the car before the plan ends. This makes a car more desirable to potential buyers. If financing a car, it is possible to add the service plan to monthly car payments. Then, all vehicle costs are in one tidy monthly payment and there are no unexpected, large one-time payments. Budgeting is easier with no need to set aside cash for emergency car service. Finally, a service plan allows the buyer quick access to a specific dealership's shop. Many times a car owner with a service plan can skip the lines and get faster service.
Service Plan Cons
Sometimes service plans are not worth the cost in the end. Cars need relatively minimal services at the beginning of their lives, so the payoff is not always ideal for a service plan. Generally, a car needs three to four oil changes, two tyre rotations and a few fluid refills within the span of a basic service plan. This total bill is not very expensive, so compare a hypothetical cost of services to the total cost of the plan before purchasing. Furthermore, service plans do not cover more complicated car care, allowing for the worry and large sums that come with unexpected car maintenance.
Maintenance Plan Overview
A maintenance plan includes all the benefits of a service plan, but also adds protection for replacement and repair of various wear and tear parts. Maintenance plans last for a set amount of years or kilometres, just like service plans. Sometimes maintenance plans are longer due to the fact that many wear and tear issues do not arise early in a vehicle's life span. There are many protected parts in a maintenance plan, and some of the most important include the clutch, exhaust, battery, brake pads, steering components and engine. These more comprehensive plans only apply if the owner performs or purchases basic services at proper times. Maintenance plans do not cover driver error events.
Maintenance Plan Pros
The best part of a maintenance plan is the ease of mind that comes with it. Virtually all problems that arise with a vehicle cost no money in the moment, having been paid for by a previous monthly payment. There are no unexpected costs. Maintenance plans are also transferable to new buyers and it is possible to include them in monthly car payments.
Maintenance Plan Cons
Maintenance plans tend to be much more expensive than service plans due to the broader coverage. It is also harder to gauge the effectiveness of a maintenance plan. Wear and tear events are random and making a hypothetical budget to compare with the plan is difficult. Maintenance plans can also see little use in the early life of a car. If a plan does not last longer than three years, many of the issues paid for at the start may never come up. Additionally, both maintenance and service plans only apply to certain geographical areas. If the car leaves the Republic of South Africa, there is no guarantee that services or maintenance will remain covered.
Purchasing a new car comes with a plethora of options, one of those being various car care plans. Both service plans and maintenance plans have benefits and detriments. Before making any decisions on these plans, carefully weigh all the terms and possibilities. Use this information to make the best choice for you and your vehicle.