You may be offered a car service plan when you buy a new or used car. These plans cover a set number of scheduled services, but is it a good investment? Let’s explore the details before making a decision.
What is a Car Service Plan?
A car service plan is a prepaid package with a specific number of services over a certain period or mileage limit. You can pay monthly via direct debit or opt for a one-time payment. However, some plans may not cover items like brakes and tyres, which are affected by driving style.
How Do Car Service Plans Work?
Instead of paying a lump sum when your service is due, a service plan allows you to spread the cost over time. You can pay upfront or agree to a monthly amount. The plan provides a fixed number of services for a specific period or mileage, but you must use an approved service centre. These plans are not regulated by the Financial Conduct Authority (FCA), and you can cancel anytime, potentially receiving a refund for unused funds.
Cost and Coverage
The cost of a car service plan depends on your car, the duration of the plan, and the coverage. Plans for basic models are cheaper than those for luxury vehicles. Additional features like replacement parts will increase the cost.
Are They Cheaper?
Service plans often offer a discount compared to paying for services individually. They also protect you from price increases in labour and oil costs. Regular servicing under these plans can help identify issues early, potentially saving you from costly repairs in the future.
Advantages of Car Service Plans
Prepaid services provide peace of mind and help maintain your car’s health. Regular servicing can catch minor problems before they become significant issues. Additionally, an entire service history can increase your car’s value when it’s time to sell.
Drawbacks
The cost is a significant consideration, especially if you have to pay upfront. Service plans can strain your budget, so it’s essential to consider all options before committing. Furthermore, not all plans offer the same level of flexibility. Some plans allow for cancellation or transfer, while others do not. Always review the details for flexibility.
What’s Covered?
Not all plans offer the same coverage. At the same time, most cover standard servicing; unexpected repairs or replacement parts may not be included. Make sure to verify the specifics of your plan.
Service Frequency
Generally, cars should be serviced every 12,000 miles or annually, whichever comes first. However, this may vary, so always refer to your vehicle handbook. Regular servicing is crucial for maintaining your car’s longevity and catching issues early.
Legal Obligations
While skipping servicing is not illegal, your car must be roadworthy. If your vehicle does not meet safety standards, claiming ignorance will not suffice.
Questions to Ask
Before signing up, inquire about the covered service centres and if the plan is national. Learn about cancellation or transfer policies, particularly if you plan to sell your car. Understand the types of service included, payment options, and any available discounts for more extended plans. Lastly, clarify the specifics, such as service frequency, claim limits, and appointment processes. Also, find out what happens to unused services and if there are penalties for early cancellation.
Selling with Full-Service History
An entire service history can contribute to getting the best price for your car. For more tips, please read our guide to selling a car and get a free valuation to determine your car’s worth today.
