What Does VSP Mean?
A vehicle service plan (VSP) is designed to pay for needed mechanical repairs and replacement parts when your original factory warranty runs out. You can buy one from your dealer or from the manufacturer; for the latter, a VSP is more often referred to as an extended warranty for cars.
Having an extended warranty for your car in place means you won’t have to worry about covering the unexpected cost of replacing a covered component. If you plan to buy a quality used car or hold onto your new car for a long time, a VSP can be a very wise investment.
Because vehicle service plans are available from any number of third-party companies and the terms of each plan vary in terms of cost and coverage, the options can be overwhelming. Use this seven-point checklist to help choose the VSP that’s right for you — and your vehicle.
Make Sure the Provider Is Reputable
If you plan to purchase an extended warranty from your vehicle’s manufacturer, you must sign up before your factory warranty expires. If you decide to go with a third-party provider, do your homework. Make sure the company has been in business for a while and has a history of good reviews and positive experiences. You want to do business with a company you can trust to honor the contract and not try to find loopholes when you need them most.
Look at What’s Covered by the warranty
Don’t just accept the first plan you come across. Compare multiple VSPs to see what they cover — and don’t cover — and why. Some VSPs only cover the “powertrain” (engine and transmission); others cover everything but. Make sure the extended warranty you choose covers all the parts you are most concerned about, and make sure you understand any and all exclusions before you sign the dotted line.
Compare VSP Prices
The prices of VSP plans can vary wildly, and some providers even offered tiered approaches to allow you to get the coverage you want for the price you want to pay. Compare all the plans that offer the coverage you want. If you’re buying from a dealer, know that their cost will be significantly lower than yours, creating a little wiggle room for pricing.
If the Price Is Too Good to Be True…
If one plan is significantly cheaper than the others you’re comparing, take heed: The odds are good that contract contains more “out” clauses that will allow the provider to deny claims.
Look for Additional Benefits of an Extended Warranty for Cars
Many VSP plans will cover repair costs as well as towing, reimbursement for rental vehicles, roadside service for breakdowns and even locksmith services if you get locked out of your car. If your insurance doesn’t cover those items, a “premium” plan could be worth the extra cost.
Know Your Repair Network
Some providers lock VSP buyers into specific repair locations, including dealerships or in-network shops. Others allow you to get repairs done at any facility with prior authorization. Still others will reimburse you for expenses no matter where you choose to take your vehicle. Make sure you know what facilities you are committing to patronizing before you sign the dotted line.
Ask how claims are handled By your VSP
Different extended car warranty providers have different processes for handling your claims. Some will require that you, as the contract holder, contact them prior to repairs to get the necessary approvals. Others will allow your repair shop to contact them for approvals. Some will require that an adjuster examine the car before repairs are done. Some will require you to pay out of pocket and will reimburse you; others will pay the shop directly. Before you commit to a VSP, make sure you fully understand the claims process each provider will require.
With proper planning and assistance from your dealer, choosing the right extended warranty for cars doesn’t have to be a stressful experience. Don’t be afraid to ask questions, and make sure you understand the fine print, and you will be able to drive your new vehicle knowing no matter what life might throw at you, your VSP has you covered.
Innovative Funding Services (IFS) can help make the decision to purchase a vehicle service plan (VSP) easier by rolling the cost into your auto loan. Contact us today to learn how!