When you buy a car, it usually comes with a limited warranty; however, this typically runs out after a certain period or mileage. Unexpected repairs can quickly drain your bank balance if you don’t have coverage to fall back on. On average, American car owners spend nearly $400 on repair and maintenance every year. Fortunately, vehicle service contracts can help you shoulder this heavy burden. Read on to find out the top eight reasons to buy a vehicle service contract.

1. You Are High-Mileage Driver

The limited warranty you get when you buy a car will run out pretty quickly if you are a high-mileage driver. Generally, limited warranties run for two or three years along with a mileage limit. Even a conservative driver could reach the max mileage in a couple of years. If you live far from where you work and make multiple trips a day, the warranty will be short-lived. You should buy a vehicle service contract that kicks in when the warranty expires.

Alternatively, you can have the two policies overlap, but you should ensure that they cover different aspects of repairs. For instance, you can buy a vehicle service contract that covers a typical warranty. Most limited warranties don’t cover minor repairs, like the heating system or electronics. Your two policies can complement each other to provide comprehensive coverage. Ultimately, your choice will depend on your driving habits.

2. You Plan to Keep Your Vehicle for a Long Time

Vehicles today are equipped with all the modern technology you will need. Since there is no fear of missing out on the next model’s significant feature, people today often keep their cars for 10 years or longer. If you love your ride and plan on having it for a while, then a vehicle service contract is for you. As the car gets older, the risk of a breakdown increases. Getting additional coverage makes it possible to make immediate repairs at no additional cost.

The rate of wear and tear is even higher when you are buying a used car. Extended warranties on a used car typically cover the essentials. All you will be getting is coverage for the engine and the transmission systems. A vehicle service contract will cover the wiring, onboard electronics, air conditioning, braking, and steering systems. The coverage will depend on the policy and what you can afford.

8 reasons to buy a vehicle service contract
3. The Vehicle Has High-Tech Components

Vehicles have come a long way since their invention. It used to be that the only electronic on a car was a bulky vacuum radio. Today, vehicles have full-fledged computer systems with sensors and actuators, and many add elaborate entertainment systems, GPS capabilities, and other electronics. Unfortunately, limited warranties mostly cover the mechanical damage.

As any car owner would tell you, repairing the high-tech components is quite expensive. The good news is that a bumper-to-bumper vehicle service contract covers most of these electronics. It allows you to enjoy the convenience of new technological gadgets without worrying about unforeseen repair costs. The more tech your vehicle has, the more coverage you will need. Ensure that you know exactly what a policy covers when you invest in it in order to avoid unpleasant surprises down the road.

4. Cost Can Be Spread Across the Car Loan

The biggest concern about vehicle service contracts is the cost. Some policies require you pay for the repairs and then apply for reimbursement. The good news is that you don’t need to have the cash to secure a vehicle service contract. The cost of the coverage can be spread across your loan. Although this option is more expensive in the long run, it makes the immediate cost affordable to everyone.

The option to include the contract in your loan is available even if you are refinancing the car loan. When done right, this investment can save you money going forward. You can channel all the funds you would have used on repairs to pay off the loan. The bonus is that the contract will also increase the car’s resale value.

8 reasons to buy a vehicle service contract
5. Increase the Car’s Resale Value

Some vehicle service contracts can be transferred when you sell the car. It is a well-known fact that a car’s value depreciates the minute you drive off the lot. As the car gets older, it might get more difficult to find a willing buyer due to the associated maintenance costs. A used car attracts more buyers if it already has a service contract in place.

Potential buyers are willing to spend more knowing that most of the future repairs are covered. It is also more likely that a car with a vehicle service contract will be in better overall shape due to the inspections. This is because any repairs are done promptly and by a trusted mechanic. However, it would be best if you read the fine print to ensure the policy is transferrable. Otherwise, the service contract has no bearing on the resale value of the vehicle.

6. They Are Available for All Budgets

Although a more comprehensive vehicle service contract costs more, you can get coverage with virtually any budget. The cost of the policy will depend on what is excluded and the deductible. However, it makes no sense to buy a vehicle service contract that excludes many services you’ll need. You will end up paying from the pocket, which goes against your plan to save.

Some service contracts require payments before the policies become active. It is the most cost-effective way of paying for an extended warranty. Choose a contract that best satisfies your needs. Always go for top-tier coverage if you can afford it because it offers the best protection.

8 reasons to buy a vehicle service contract
7. You Have a Choice About Who Repairs Your Car

Limited warranties usually limit you to where you can take the car when there is a problem. The options are either the manufacturer or the car dealership. Obviously, this can be a problem when the car breaks down out of town. Vehicle service contracts are more flexible when it comes to the choice of repair shop. Most contracts allow you to choose from a list of authorized dealers and repair centers.

Even so, it would be best if you never assumed that you would have that choice. Make sure that you read the fine print. Another contentious issue is the towing services; some vehicle service contracts require prior authorization before towing the car. Lastly, find out what happens when you move permanently. It is better to get a vehicle service contract from a provider that services a large geographical area.

8. Peace of Mind

Having a vehicle service contract offers a sense of security. You are not constantly worrying about something breaking down. When it comes to a vehicle service contract, it is better to have it and not need it than to need it and not have it. You will appreciate its value when your vehicle breaks down in the middle of nowhere. A policy that offers roadside assistance is especially useful in such a scenario.

Of course, a service contract will come at an additional cost. However, the alternative is to get emergency roadside assistance and towing elsewhere. These costs add up and may be more expensive in the long run. Although these perks will not compensate for the lack of a car, they will make you feel more at ease knowing that everything will be sorted if you should need help.

Though you may never use it, having a vehicle service contract gives you the peace of mind and flexibility you need should your car require any major repairs not covered by your regular warranty.