A prepaid vehicle maintenance plan is an additional feature offered by most dealerships that covers the essential maintenance your car will need after the initial purchase. With a prepaid maintenance plan, you can visit your dealership anytime you need scheduled maintenance without having to worry about spending any cash. Many dealerships across the country usually offer a maintenance plan alongside other options such as credit insurance, extended warranties, and security devices.
In most cases, prepaid maintenance plans will only cover the regularly scheduled maintenance listed in the car’s owner manual. However, some plans will include several restrictions that might limit the covered services. For example, most manufacturers and dealerships will exclude replacing any parts that wear out, such as tires, suspension, and brake pads. Some dealers offer unlimited oil changes, lubrication, and tire inspection.
Should You Get a Prepaid Maintenance Plan?
Just as with any other investment, you should weigh the pros and cons and do the math to figure out whether a prepaid maintenance plan is a worthy investment. In general, you should compare the price of the plan offered by the dealership with the estimated out-of-pocket cost of the scheduled maintenance during the coverage period. Here are some other essential things you should take into consideration before purchasing a prepaid service plan:
- Although the car’s prepaid maintenance plan can be bundled together with an auto loan and paid for in monthly installments, it will be much cheaper when paid for in full separately.
- Some dealers will allow you to transfer the plan if you decide to sell the car before the plan expires. However, you will need to confirm whether it is allowed with your dealer.
- Manufacturer-backed plans are usually honored at any dealership that sells the brand. This might prove quite helpful, especially if you plan to move to a new town or city.
- Authorized dealerships use genuine OEM parts and factory-specified lubricants.
- Some plans might be considerably more expensive than paying for the maintenance out-of-pocket. It might be good to inquire about the estimated service cost to understand how economical the plan is.
What Does a Prepaid Vehicle Maintenance Plan Cover?
An excellent prepaid maintenance plan should cover the cost of keeping your vehicle in the best condition by keeping up with the manufacturer’s maintenance schedule. Some of the most common services covered by a maintenance plan include:
- Oil changes
- Tire rotations
- Filter changes
- Fluid replacement
Unlike extended car warranties, prepaid maintenance plans do not cover malfunctioning, worn out, or broken parts, such as tires, or transmission work.
The Pros and Cons of a Prepaid Vehicle Maintenance Plan
Let’s take a look at some of the possible benefits or drawbacks you might encounter with a prepaid maintenance plan.
Pros
- Discounts – Although you might not know, vehicle maintenance is usually the biggest revenue generator for many dealerships. In most cases, dealerships will sell prepaid maintenance plans to create a steady stream of customers they can depend on. To do this, they will often sell prepaid plans at a discounted price to entice the customers.
- Fewer fixed costs – A prepaid maintenance plan will take your mind off the unplanned costs that you might have to spend on minor maintenance for your car. You also don’t have to track and plan for scheduled maintenance meticulously. Most dealerships will remind you that your vehicle is due for maintenance.
- Predictability – A prepaid maintenance plan will lock in the costs of your vehicle’s scheduled services over a certain amount of time or distance. This will ease your financial burden and assure you that your car will always receive maintenance service when need be. You will not have to postpone necessary maintenance due to financial constraints.
Another benefit of a prepaid plan is that you won’t be subjected to price changes during your paid period.
Cons
- Some plans do not follow the manufacturer-recommended service intervals. One of the most common problems with prepaid maintenance plans is that they may not follow the maintenance frequency recommended by the manufacturer.
For example, the manufacturer might require you to perform an oil change after every 6,000 miles or 7,500 miles if you have a smaller vehicle. However, your prepaid plan might indicate that you can only get an oil change after every 10,000 miles, which is 3,500 – 4,000 miles overdue.
To avoid such scenarios, make sure you go through the prepaid plan’s terms and compare them to the manufacturer’s terms. - The plans are limited to the dealership’s service department. The prepaid maintenance plan is usually limited to the specific dealership’s service department for used cars. This means that you can only get your car’s scheduled maintenance at that particular dealership regardless of how busy they are.
It also means that you might have to pay for other costs that they might charge you. Different dealerships charge different hourly rates, but in most cases, dealerships will be more expensive than independent shops. - Modern vehicles require less maintenance. If you own a reasonably modern vehicle, prepaid maintenance plans might not prove to be as beneficial as with older models. Most modern cars only require minor oil changes and tire rotation after every few thousand miles.
Can You Opt Out of Your Prepaid Maintenance?
Different dealerships have different terms for their prepaid maintenance plans. However, you can cancel your plan in most scenarios and get a full refund within the first 30 days if you do not get any service work done on your vehicle.
But, if you get some work done within the first 30 days of subscribing to the plan, you might need to contact your dealership for more information. You might even incur some fees or other penalties for canceling the plan.
How Much Should You Spend on a Prepaid Maintenance Plan?
There is no one-fits-all answer to this question. Prepaid maintenance plans will vary from dealership to dealership, depending on the brand, model, and condition of your vehicle. Geographical location is also another main determining factor. Some states have higher taxes than others, affecting the overall maintenance costs. For example, prepaid plans for new vehicles will differ from those covering used cars.
Bottom Line
A prepaid maintenance plan is designed to cover regular maintenance schedules without having to spend anything straight out of your pocket. The plans offer car owners many advantages, such as discounts on routine maintenance services.
Before deciding on whether you should get a prepaid maintenance plan, you should check to consider whether the deal offered to you is worth it. The most important factor should be whether or not you will be getting value for what you are paying for. If there aren’t any actual savings involved, you should not get a prepaid plan.
Prepaid plans might not be ideal if your dealership is constantly overwhelmed by the number of customers or you don’t like leaving your vehicle at the dealership. It might also not be the best option if your car doesn’t require much maintenance.
All in all, subscribing to a maintenance plan depends on whether it is worth your while. However, it is essential to keep in mind that the value of the plans might not always be immediately apparent. Nonetheless, a prepaid plan should make maintenance convenient and accessible, extending the life of your vehicle.
