1. What's the most important thing I should know about an extended service contract?
It
is important to know the company that is promising to pay you if your
car breaks down. A contract is only as good as the company that backs
it. Some dealers offer service contract products other than the Subaru
plan. For example, you can purchase Subaru Added Security (the only extended service contract backed by Subaru of America, Inc.) or
an extended service contract backed by an independent insurance
company, which could be mistaken for Subaru-backed protection. Be
careful when considering independent plans. Here are some facts about
independent companies:
- The
10 leading independent providers 10 years ago are all out of business
today. That means a large number of customers who had valid claims were
not paid or received only partial reimbursements.
- Independent
providers profit only if their costs are less than what you paid for
protection. Subaru Added Security's focus is on customer satisfaction,
not extended service contract profits. Subaru wants your next car to be another Subaru!
- On
the surface many independent coverages appear to look like ours. The
problem is they often require the use of inferior replacement parts,
exclude important coverages like wear and tear, or make it extremely
difficult to collect benefits.
2. What is an extended service contract?
It
is a contract between you and the provider, who promises to pay for
specified repairs of mechanical failures during the contract term (less a
deductible, if any). It may also be referred to as an extended warranty
or vehicle service contract. Here are some key definitions to help you
in selecting a plan:
- Obligor -
a legal term for the company obligated to live up to the terms of the
contract (e.g., manufacturer, dealer, or third-party company).
- Administrator -
the company hired by the obligor to handle claims, instead of doing it
themselves (the administrator is not a party to the contract).
- Breakdown -
definitions vary from "failure of a component to work as it was
designed to work in normal service" to "failure due to a defect in
materials or faulty workmanship."
- Normal wear and tear - when a part is not broken, but simply wears over time during normal use of the car.
- Cause and effect - if a covered part fails and damages another part.
- Deductible - the amount you must pay for a covered repair.
- Surcharges -
additional amounts you must pay to include coverage of certain items
(e.g., All-Wheel Drive, high-tech components, on-board computers, seals
and gaskets).
3. Do I really need an extended service contract?
An
extended service contract is an important option. With the high
technology built into today's cars, repair costs have risen dramatically
and will continue to do so. With just one major after-warranty repair,
the contract could easily pay for itself. Subaru is proud of its
reputation for reliability and superior engineering. However, anything
mechanical could eventually require repairs.
4. Is there any benefit to taking advantage of an extended service contract opportunity while a car is still under warranty?
As
with any other product, service contracts are subject to inflationary
price increases. By purchasing it now, you can lock-in at today's cost.
In addition, if you take advantage of Subaru Added Security at the time
of vehicle purchase, you can include the cost in your monthly finance or
lease payment. Plus, you may be entitled to benefits in addition to the
basic factory warranty, such as car rental, lodging and meal
reimbursement for warranty repairs required when you're traveling. Your
plan can even include emergency roadside service for a jump-start,
gasoline delivery, tire change, locksmith service, road hazard tire
protection, lost key retrieval, and computerized trip routing for up to
seven years.
5. Why is a Subaru-backed extended service contract the best choice?
Subaru
views a service contract as an investment in customer satisfaction,
rather than as a profit maker. We know that a satisfied customer will
likely be a repeat car buyer. Independent providers/insurance companies
have no investment in your next car purchase. This philosophy really
makes a difference in the quality of their service contract product, and
even more importantly when it comes to honoring your claims.
To
research details of the Subaru Extended Service Contract plans, and
alternatives sometimes offered to Subaru owners, click on Subaru Plans
vs. Some Other Plans.
When
you're ready to shop for the best extended service contract for your
new Subaru, click on Extended Service Contract Comparisons. Then print
the handy comparison form to use as a reference when discussing service
contract details with your dealer or financing institution.
Subaru Plans vs. Some Other Plans
| Contract Provisions | The Subaru Plans | Some Other Plans* |
|---|
| Wear and Tear | Fully covered | Often excluded from coverage |
| Heads and Engine Blocks | Fully covered | Only covered if damaged by internally lubricated part |
| Cause and Effect | Fully covered | Often excluded from coverage |
| CVJ Boots | Fully covered | Often excluded from coverage |
| MacPherson Struts | Fully covered | Cover MacPherson housing only |
| Replacement Parts | Genuine new or remanufactured Subaru parts | Parts may be used, rebuilt or generic |
| Claim Administration | Trained Subaru factory technicians | Administrator's personnel |
| Obligor | Subaru of America, Inc. | Dealer or insurance company |
| Rental Car Reimbursement | $30/day up to $150 | May provide less coverage or none at all |
| Towing Reimbursement | $50-$100 | May provide less coverage or none at all |
| Trip Interruption | $500, if 50+ miles from home | If available, may be $200, if 100+ miles from home |
| Roadside Assistance | $100
dispatched towing, locksmith, gas delivery, tire change, battery jump,
on-site minor repair, trip routing, lost key return, road hazard tire
protection | Availability and benefits vary or may be offered for an additional charge |
| Transferability | $35 fee per occurrence | $35-$55 if transferable or only one time in life of car |
| Cancellation | Full refund first 90 days, pro rata thereafter, $25 fee | If cancelable, pro rata or short-rate method, $35 fee |
| Deductible | If applicable, one per repair visit regardless of the number of parts repaired | One per component repaired |
| Surcharges | Turbo | 4WD, AWD, hi-tech, electronics, seals and gaskets |
*Based on comprehensive marketing research of typical extended service contract providers.
How To Be A Smart Shopper
To
be sure the extended service contract you buy will do what you need it
to, make sure it is a genuine Subaru product. Ask to see an actual
sample of the contract and read it carefully. Reputable companies will
be happy to provide one to you. Don't be misled by fancy brochures.
Extended Service Contract Comparison
| Added Security | Other Plans |
|---|
| Is the extended service contract you are considering a genuine Subaru product backed by Subaru of America? | Yes |
|
| Subaru Added Security is the only extended service contract backed by Subaru of America, Inc. |
|
|
| Does it cover wear and tear? | Yes |
|
| It doesn't if it specifically excludes "low compression or gradual reduction in operating performance." |
|
|
| Does the contract define the term "breakdown" as, "the failure of a part to work as it was designed to work in normal service?" | Yes |
|
| If it specifies "defect in materials or workmanship," it doesn't cover wear and tear. |
|
|
| Does it cover cause and effect? | Yes |
|
| A repair of a non-covered part due to the failure of a covered part. |
|
|
| Does it cover constant velocity joint boots? | Yes |
|
| Ask about other "exclusions" that won't be covered by the contract. |
|
|
| Is rental car reimbursement available if the service department has to keep your car overnight? | Yes |
|
| Many
programs require that the labor for the repair exceed eight hours to
qualify for more than one day of rental coverage and allow only two days
for parts delay. |
|
|
| Are only genuine Subaru replacement parts used for repairs? | Yes |
|
| Some non-Subaru plans allow the use of used parts. |
|
|
| Will you be charged just one deductible each repair visit? | Yes |
|
| Many programs charge a deductible for each component that needs repair, even if it is in the same repair visit. |
|
|
| Are AWD, high-tech components, on-board computers, seals and gaskets included in the base price? | Yes |
|
| Many programs charge extra to cover these items. |
|
|
Questions To Ask Yourself:
Who do I want to be responsible for protecting me against unexpected repair costs?
- A broker, insurance company or a third party that I never heard of?
- A company that may not be in business when I need them?
- Or is the best choice to be covered by Subaru?
- Who truly cares how happy I am with my Subaru or if I ever buy another one?
- A broker, a so-called administrator or an insurance company?
- Or would I rather have Subaru on my side?
Subaru cares about you!
