To opt for a service contract or not

If you are buying a car or major appliance, you most likely have the option to purchase a service contract or extended warranty.

To many consumers, buying a service contract is like buying peace of mind from repair hassles. Before you purchase a service contract, consider the following:

What does the service contract offer?

A service contract, like a warranty, provides repair and/or maintenance for a specific period. Warranties are included in the price of the product, while service contracts or extended warranties cost extra.

What does the service contract cover?

A service contract may cover only certain parts of the product or specific repairs. Read the contract carefully and if it does not list something specifically, assume it is not covered. Find out if repairs are extra on weekends or holidays.

What will the service contract give you that the warranty will not?

Make sure you know what the warranty coverage is. Compare the coverage against the coverage of the warranty and decide if it is worth the extra expense. Consider whether the item is likely to need repairs. You may not benefit from a service contract. Ask if there is a limit to the number of repairs.

Who is responsible for the contract?

Consumers often find themselves with a service contract company that is no longer in business and cannot repay claims. The best way to avoid this situation is to consider whether the company is reputable. Ask the local Better Business Bureau if they have any complaints against the company. Although the Federal Trade Commission cannot represent consumers directly, it wants to know if companies are not meeting their service contract obligations.

Whether or not to purchase these add–ons is up to you. Carefully consider all alternatives before making a decision.

For more information, contact Ruth Brock. Her e-mail is brockru@aces.edu.

Ruth Brock is a regional extension agent that serves Shelby County. She can be reached by e–mail at BROCKRU@aces.edu.