Save Cash by Avoiding Auto-Repair Service Plans
(Increase your financial IQ – think green)
Did you know that according to Consumer Reports Magazine, extended auto warranties usually don’t make financial cents? Consumer Reports notes that a five year old vehicle today had one third fewer problems than a five year old vehicle in 2005. The bottom line – cars are becoming increasingly more reliable and serious (more expensive) problems, such as engine or transmission repairs, are actually quite rare.
Many service plans are sold by marketing companies that don’t provide the coverage themselves. Plans can cost hundreds or thousands of dollars and have various coverage options. They all sound good until you file a claim. Most contracts include a lot of fine print that can usually be used to deny your request for payment. According to the Federal Trade Commission, auto-service contract fraud was the number one complaint in 2009! That just about says it all.
Whether a service plan is offered by a broker, car dealer or manufacturer, the experts recommend that you skip it. You’re better off redirecting that money into your TSP account!