If you are thinking about renewing your car, one new option offered by the dealership is a PPM, Prepaid Car Maintenance Plan. This plan is not the same as an extended warranty, it’s aim is to pay for the standard cost of servicing the vehicle every year.
However, some deals are better than others, these plans, secured by the dealership, meaning that each year you need to service your vehicle you will have to use a certain garage, but hopefully the costs of the service are already paid.
It is important that you check the areas of your cover, some have more detail than others and it is important to read the information to ensure the cover complies with the warranty requirements on the car. Some policies are better than others are; you don’t want to assume an item is part of the policy and not budget for further expense. This could lead to you being presented with a bill after your annual service.
The price of the PPM will depend entirely on the dealership; they are able to broker deals as to the price they can offer the policy. Bear in mind that whilst it might be the right deal for you, the sales person is going to push the add-on products, because this is where they make the most commission.
Work out the costs of the prepaid car maintenance plan
If you are considering accepting a prepaid car maintenance plan from the dealership make sure you have considered the costs involved. Check out the current price for the service and length of time the policy is valid for, if the policy works out cheaper and saving you money, then it might be worth considering. If it is more expensive, then it is important to understand the figures and reject the proposal.
Taking the time to go over the information given might seem like a questionable action but it will mean that you get the best deal for your money long-term.
Taking out finance to pay for your vehicle will mean the cost of the prepaid car maintenance plan will add-on to your finance. If you are not lucky enough to find a deal that offers you 0%, then the cost of the plan will increase with the interest you are paying on it. This could mean that the prepaid car maintenance plan is more expensive than if you paid for the plan cash.
Ask the dealer the question, if you can pay for the plan without adding that expense onto the cost of the car. Not only does this save you money on your services that the plan pays for, but it will also reduce the amount you pay each month on your car loan.
Therefore, a prepaid car maintenance plan might save you money in the long-term, but it is something you will have to check out with the dealership and what they are offering.