1. SERVICE CONTRACTS COMPARED TO WARRANTIES
SERVICE CONTRACTS OFTEN LOOK LIKE WARRANTIES BUT ARE SIGNIFICANTLY DIFFERENT
A SERVICE CONTRACT IS NOT A WARRANTY: Though many car dealers will use the term "warranty" or "extended warranty" when selling you a service
contract, service contracts are not warranties. Car warranties and service contracts appear similiar; they repair a car for some time/mileage. But
KNOW the difference because it affects your rights if you bought a "lemon".
HOW TO TELL THE DIFFERENCE - GENERAL GUIDELINES:
- Service Contracts cost extra
- Contracts can be purchased anytime; not just when the car is sold
- Car is sold "As Is - No Warranty" (when buying an older used car)
SERVICE CONTRACTS PROVIDING COVERAGE IDENTICAL TO A WARRANTY ARE PROHIBITED: Service contracts may be sold
with both new and used vehicles but CAN NOT cover the SAME items, costs, times, or remedies the warranty (if any) provides. If a new car buyer
purchases a service contract the contract can only take over when the warranty expires.
THE TWO EXCEPTIONS - A service contract may overlap when either:
- The service contract covers items NOT covered by the warranty
- The service contract provides for a remedy/relief that warranty does not.
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