Think about all the times your car needs a tire rotation, an oil change or other scheduled preventative maintenance. Did you know that you may be able to prepay for these services in a flat rate plan?
You drive into your dealer or repair show, the work is done and the goal is to have a quick exit back on the road.
Denise Karl bought a prepaid maintenance plan for two different cars. Her first plan cost $1500 and was added to the cost of her lease, allowing her to spread out the expense. She calculated the plan saved her about $600 on maintenance.
"I thought the idea of a pre paid maintenance plan, where I didn't have to worry whether or not I had money on my credit card, would be a great idea," Karl said. "It definitely was a money saver to have it pre paid."
But when she got this new car and bought a second plan for $800, she didn’t realize it only covered oil changes and was shocked when she was charged for other maintenance.
"I was very disappointed," Karl said.
What each plan covers varies, but usually you can prepay for the scheduled maintenance that’s listed in your owner’s manual. These things are not covered by the manufacturer’s warranty. Some may even offer these prepaid repairs at a discount from the regular rate.
The plans are a hot item for dealers to offer at closing, but the Better Business Bureau warns not to let the pressure persuade you.
"These kinds of plans are relatively new, so we've received about 100 over the past couple of years, we've certainly seen an uptick in the numbers," Rodney Davis with the Better Business Bureau said.
Some of the BBB complains include people claiming maintenance plans were added to their closing paperwork without their approval. They dropped off their cars for maintenance, but the work was not done.
Repair shops went out of business, and the car owner was out the money they paid.
The auto experts at Edmunds remind you that when you sign up for one, you’re literally fronting dealers and repair shops your cash – so be careful.
"These pre paid maintenance plans are a source of profit for the dealership so they're really going to try to steer you toward that." Ron Montoya with Edmunds.com said.
There can be benefits if you do your homework and pick the right program. The shops we talked to that offer prepaid plans say they work extra hard to impress customers so they come back for more than just routine maintenance.
"We want to wow you with service." Mark Curry of Curry’s Auto
Since the plans all vary, before you buy experts offer the following advice:
- Read the details carefully to see how long it lasts, what it covers, and calculate the expenses to make sure you see savings.
- Once you buy a plan, remember that you’re stuck going to that dealer or repair shop.
- If you finance the plan with your car loan, that means you’re paying interest on it – costing you more.
If you’re tempted to buy a car maintenance plan, here’s one insider secret to getting a good deal:
"We've been told dealers mark them up-- up to 50% so you know try out offering half the price and then they may counter the offer and you can meet somewhere in between," Montoya said.
To drive home with the best deal, Karl says just be sure you do your homework before you buy.
"You definitely have to read to know what you're getting yourself
into before you pay for it," Karl said.
Be sure to check out the business you’re considering buying a plan from to see if it has complaints. Some high end car makers include a free maintenance plan in the purchase price. And if you plan on moving or selling your car before the plan is up, make sure it’s transferable.
Edmunds.com offers a maintenance free cost calculator that will estimate the scheduled maintenance costs for cars.