A vehicle service contract is a contractual agreement between a car owner and a third-party company (known as an administrator). Car owners purchase these protection plans to safeguard them against costs that will arise if their vehicle breaks down.

When you buy a car, it will likely be the most important asset you own. This means it is probably the most expensive too. It’s important to protect yourself and your car before problems happen.

It’s essential to take out a plan with a reputable company. CarGuard Administration is a vehicle service contract provider that is a great choice if you’re looking for one due to their focus on the customer and easy-to-read contracts.

There are several benefits that a vehicle service contract provides. Here are the top five reasons why you need a protection plan.

Reason #1: Repair Coverage

How often do you see a car broken down on the side of the road? If you’ve been driving for a while, it’s probably happened to you at some stage. Paying for a tow truck and mechanic is not a cheap affair. There’s also the added hassle of being without a car while yours is being fixed. This can take days or weeks, depending on the problem.

CarGuard Administration states that over 80% of their customers’ cars break down while they have their protection plan. That figure alone suggests it’s probably going to help you out one day.

Reason #2: Rental Car Coverage

If your car does break down you could be without your car for some time. This can impact every aspect of your life from buying the groceries to taking the kids to school to going to work!

Look for an administrator that offers a rental car on the first day like CarGuard Administration. This means you won’t experience any further interruptions to your already hectic life.

Reason #3: Affordable Peace of Mind

Vehicle service contracts are very reasonably priced. When you consider all the problems that could happen it makes sense to plan ahead.

You can find companies that will offer different levels of coverage, which means you can pick the plan that best suits you without the need to pay extra for repairs.

Reason #4: Confirms Car Quality

Most people find vehicle service contracts reassuring because administrators wouldn’t give you a plan if they didn’t believe your car performs well.

Buy a plan from a company that has mechanics as its claims adjusters like CarGuard Administration. That way, you know they will be able to competently adjudicate any claims you submit.

Reason #5: Increases Resale Value

Evidence shows that holding a vehicle service contract can increase the resale value of cars. Many contracts are transferable, and having one makes for an attractive prospect for potential buyers. When buying a plan, make sure it is bound to the vehicle and thus can be switched over in case you ever sell your vehicle.

What to Consider When Selecting a Provider

There are plenty of administrators to choose from, many good and some less desirable. Do your research before jumping into a purchase to make sure you get the coverage you need with a company that will look after you.

Here are some top factors to consider.

Are the plans easy to read?

Know what you are getting into before you commit. No one enjoys reading over fine print that only a lawyer would understand. It could also lead you into trouble in the future if you haven’t been able to navigate the plan properly and you find you took out the wrong one.

Many companies are working hard to solve this and CarGuard Administration has some of the easiest documentation on the market to understand.

Is the provider insured?

Make sure any provider you go with is fully insured. This means you will be covered in the event that something happens to the company.

CarGuard Administration is a good example of a fully insured vehicle service contract provider. All of their contracts are insured with an insurance firm that has an “A” rating on the AmBest Index.

As you can see, taking out a vehicle service contract is an important and wise decision. For an affordable price, you can have peace of mind that you won’t have any big bills coming your way when your car decides to break down.