Buying An Automotive Extended Service Contract

Should You Buy An Automotive Extended Service Contract?

The decision to purchase an extended service contract or mechanical break down policy as they are sometimes called is a decision that has many variables. Depending on the age of the vehicle, the usage, how long do you plan on keeping the vehicle for are just a few questions that need to be considered.


If you look online, some of these so called guru’s who write scam pieces will tell you—Don’t Buy—it’s a scam. I whole heartily disagree with their opinions, I question if they have real world knowledge and experience to begin with. If they did, then I firmly believe their opinion would be other wise.

The scam comes when you are charged outrageous and inflated prices for an extended service contract, they are not cheap to begin with, but those who exasperate the cost are the ones who are taking advantage of unsuspecting consumers. Or perhaps even requiring you to purchase as a condition of buying the vehicle, you should never be forced to buy under any circumstances.

With automotive repair labor rates ranging easily up to $100.00 per hour or more, it doesn’t take a huge repair to cost you major bucks, and with the electronics and technologies of today’s automobiles, parts prices are equally as expensive.

During my 26 years in the automotive service industry, I can recall countless and numerous times where customers wished that they had purchased, and those that did were glad they made such a sound financial decision.

Consider the following examples of repair cost:

Air Conditioner Repairs can easily cost $1500.00 for compressor replacements.
Transmission Overhaul or Replacements–$3000.00
Water Pump replacements–$600.00
Power Steering Pumps and Steering Gears–$600-$2000.00


However, don’t be mislead into believing a mechanical break down policy covers every nut and bolt on the vehicle, there are variables and different kinds of policies as well. Some cover seals and gaskets, wear and tear items, consequential damages etc and others don’t. Be aware of what it does and does not cover before buying, this will save you a lot of grief in the event you have a mechanical failure.

It is a major decision, and one that requires weighing the advantages and disadvantages.
My personal and professional opinion is that if you are going to use the vehicle on a daily basis, you plan on keeping for 2 years or more after the original factory warranty has expired, then you should purchase the extra protection.

It is after all, like an insurance policy, you hope that you don’t have to use it, but it will give you some peace of mind in the event that you have to have an expensive repair.

A Payday Advance Versus A Long Term Bank Loan

There are times when the most unexpected expenses pop up unexpectedly. It could be because of a bill that you need to pay or maybe an urgent car or home repair. No matter what the case, at times it becomes difficult to wait till the end of the month to meet the expenses. And getting a cash advance until payday can pose quite a problem. Even though you can always asks your friends or relatives to give you a cash advance until payday, but this can uncomfortably, to say the least.

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In this case, you can either apply for bank loans or you can get no credit check payday loans. No credit check payday loans have gained immense popularity over the past few years and offer numerous advantages over getting a bank loan or taking advance till payday from a friend or a relative.

No credit check payday loans

Despite its popularity, there are many who don’t quite know what cash until payday loan really is. Simply put, a payday loan is an unsecured loan that is extended to you in order to meet instant cash needs. In the case of these loans, all you need to do is fill up an online application form that requires you to give certain personal information followed by information regarding your job and your employer. The basic prerequisite for these loans is that you need to be a US citizen and should be over 18 years of age. Also you should be a salaried employee. The approval process for no credit check payday loans is rather simple and the minute you get an approval, the cash is deposited directly into your account. As a result it does not pose a problem to get an advance till payday to meet any emergencies.

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A long term bank loan

In order to get a bank loan, usually, the approval process takes time. At the same time, the advantage with these loans is that you do not need to pay back the cash immediately. But looking at it from another perspective, this also implies that you end up paying higher fees and a higher interest than you would pay for an instant payday advance. And if you need the cash instantly, it does not help to take a long term loan. With a long drawn approval process, it would take time to get the money from these loans. As a result, if you need the cash to meet immediate expenses, these loans would be of no help. Also, in most cases when you apply for a long term loan, you would need to present relevant collateral.

So, before you decide to apply for a payday loan or a long term loan from a bank, consider the advantages and the limitations of both before finally taking a decision.