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Do I need to purchase a prepaid maintenance plan for my car? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators that provide objective and original content. This allows you to conduct research and compare information for free – so that you can make sound financial decisions. Bankrate has agreements with issuers, including but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The offers that appear on this website are provided by companies that compensate us. This compensation can affect the way and where products appear on this website, for example the order in which they may be listed within the categories of listing, except where prohibited by law for our mortgage or home equity, and also other home loan products. This compensation, however, does affect the information we publish, or the reviews appear on this website. We do not cover the universe of companies or financial offers that may be open to you. SHARE Westend61/Getty images

3 min read Published March 13, 2023

Written by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers to navigate the details of taking out loans to buy a car. Edited by Helen Wilbers Edited by Helen Wilbers Editing for Bankrate from late 2022. He believes in clear reports that help readers confidently find deals and make the best decisions for their financials. He specializes in small and auto loans. The Bankrate promise

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We receive compensation for placement of sponsored products and, services, or by you clicking on specific links on our website. Therefore, this compensation may affect the way, location and when products are listed, except where prohibited by law for our mortgage home equity, mortgage and other home loan products. Other factors, such as our own website rules and whether or not a product is offered in the area you reside in or is within your personal credit score can also impact the manner in which products are featured on this site. While we strive to provide an array of offers, Bankrate does not include specific information on every financial or credit product or service. Dealerships can offer prepaid car maintenance plans like warranty extensions, insurance for credit, as well as anti-theft tools. They’re not always an ideal deal. But the best way to decide if a prepaid maintenance plan is the right choice is to investigate the anticipated maintenance costs, and then evaluate them against the price you’re offered. If you’re planning to add the prepaid maintenance plan to your auto loan It may be more sense to save an account in savings where you earn, rather than paying interest. What is a prepaid car maintenance plan? The plans for car maintenance that you pay for cover scheduled and expected maintenance. Unlike , they only pay for preventative maintenance, such as tire rotations and . The manufacturer warranty or extended warranty will still cover unexpected repairs. A prepaid maintenance plan may be discussed when purchasing new vehicles that don’t include scheduled maintenance for cars built into the price of purchase or in the event that the manufacturer doesn’t cover. Either way, be certain to inquire if the offered plan can be utilized at an independent mechanic’s workshop or the plan is restricted to services in the dealer. Many such plans only allow service at the selling dealership and limit your options to future maintenance. In the case of the plan for prepaid maintenance you are considering, maintenance may be restricted to certain intervals (for instance, oil changes only being covered at intervals of 10,000 miles). Some prepaid plans only provide services once per calendar year or every six months, so depending on how much you drive, you may need additional paid maintenance on the car. A variety of manufacturers — such as Jaguar, Toyota, BMW, Volvo, MINI and Land Rover — offer Prepaid maintenance plans. Some of these factory plans also include wear-and-tear items including windshield wiper blades and brake pads, however some don’t, so it’s essential to conduct research prior to going to the showroom. Are prepaid maintenance plans worth the cost? As with most aspects of the buying process taking the time to calculate the cost prior to meeting with the dealer is essential to saving money. Examine the cost of the plan with the estimated cost of expenses that are scheduled or out of pocket within the time frame covered. Your owner’s manual should list the types of maintenance you’ll need as well as when you’ll need it. Contact the service manager of your dealer and ask for details of maintenance expenses. You can also by considering the costs of maintenance, insurance, and other expenses. If the estimate of regular maintenance of your new car for its first 30,000 miles is $400 and you pay $880 for the service, a prepaid maintenance plan for your car is not worth the cost. If you are paying $250 for the plan, you’ll can save money. It is possible to strike a balance but remember when you add the prepaid maintenance plan as part of the loan consider the amount you’ll pay in interest alongside the maintenance fee to figure out the full price. The pros and cons of plan to maintain your car prepaid Don’t just agree to a prepaid maintenance plan. Before you set foot in a dealership, know the maintenance fees expected for the cars you’re considering. Keep this list of pros and cons as you negotiate. Pros Costs for covered services are locked in and not changed by inflation. It is possible to transfer the plan once you decide to sell your vehicle. The residual value of leased vehicles might increase with a prepay maintenance plan. Prepaid costs may be discounted in comparison to regular maintenance costs. Plans that are backed by the manufacturer are typically offered by dealerships that are affiliated, regardless of where they are located. Cons Service intervals may not be as specified in the manual of the owner. Prepaid maintenance plans may be more expensive than the actual cost of maintaining. In many instances, you need to have your car serviced at the dealership that you bought your car from. The most common wear and tear items are not covered. It is possible to include coverage that is unnecessary or is already part of an extended warranties. The bottom line: Prepaid maintenance plans are a matter of negotiation- so don’t just agree to the cost offered by the finance office of the dealership. If you know the potential cost of regular maintenance, you can prepare ahead and avoid the hassle of deciding when and where to transport your car. It’s not the most ideal option if you already have a reliable mechanic or body shop or do not plan on staying in the same area that you purchased the car. And if you wrap an prepaid maintenance plan in your auto loan it could cost you more in interest than what the maintenance plan is worth. Be mindful of your loan’s interest rate, and don’t hesitate to . If you want to determine whether a prepay maintenance plan can benefit you, you should take the time to investigate the anticipated costs and compare them with what the dealership offers.

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The article was written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers in navigating the ins and outs of securely borrowing money to buy cars. Edited by Helen Wilbers Edited by Helen Wilbers has been editing for Bankrate since late 2022. He values clear reporting that helps readers successfully get deals and make most appropriate choices regarding their money. He is a specialist in auto and small business loans. Related articles: Auto Loans 5 minutes read in Mar 03, 2023 Auto 6 min read March 02, 2023 Auto Loans 3 min read Oct 13 2022. Auto Loans 4 min read Aug 22, 2022

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