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Consumer Reports: Should you buy a prepaid car maintenance plan?

Posted at 8:36 AM, Mar 29, 2019
and last updated 2019-03-29 11:36:42-04

If you’ve bought a car recently, there’s a good chance the dealer tried to sell you a prepaid maintenance plan, encouraging you to pay up front for regularly scheduled maintenance.

“It’s different than an extended warranty, which covers things on the car when they break," says Mike Monticello, Consumer Reports. "A pre-paid maintenance plan covers the services that you’re required to do, to keep the car running in top shape. Things like oil changes, filter replacements, and rotating your tires.”

Automotive experts at Consumer Reports say there are pros and cons to considering one. The cost can be bundled into your auto loan, so the monthly bump in price can feel negligible. But this means you’ll be paying interest. To avoid this, pay for the plan in full, separately.

“For a lot of people, it’s about peace of mind. And you can’t really put a price on that," says Monticello.

Also, ask whether the plan can be transferred with the car, if you sell the car before the plan expires. And, as always, read the fine print. Some plans have restrictions, like where work can be done.

“Factory-backed plans are typically honored at any dealership that sells the same brand of car that you bought," says Monticello. "Which is helpful if you move. But if you live far away from a dealership, this can be a hassle. Or if you have a local mechanic that you’d actually rather use."

Most important, do the math. Compare the cost of the plan you’re considering against the cost of the actual maintenance it covers. You can ask the dealer what each service costs to get an idea of a plan’s true value.

An idea of what a typical service costs can be found here.