Often when a consumer purchases a new or used car that has no warranty plan they are offered a pre-paid maintenance plan. This plan differs from an extended warranty plan or extended service contract, as the purchased vehicle has no warranty in the first place. The plan will cover scheduled maintenance recommended by the owner’s manual for a specific length of time or mileage.

If you are wondering if a pre-paid maintenance plan is a good choice, here is a list of pros and cons to help with this decision.

Pro: Discounted Prices

A pre-paid maintenance plan will keep customers coming into the service department. This helps form a relationship so the dealer can hopefully handle the next car purchase. Dealers often offer these services at a discount over the regular prices.

Pro: Lock in Maintenance Costs

By paying for the maintenance service up front, a customer will not be surprised at the rising costs of car maintenance. This will also help in a budget for customers who have a lower income and cannot afford maintenance on their own. The downside to this is the interest paid over the life of the loan.

Pro: Simplifies Life

Having a pre-paid maintenance plan takes the decision-making out of the car owner’s hands. No need to wonder if it is time to change the oil because the dealer handles all of the calls to the owner when it is time for service.

Con: Only Selling Dealership Can Perform Service

A pre-paid maintenance plan might simplify life; however, certain limitations exist. In most cases, you can only take your car in for service is at the selling dealership. This restriction can sometimes add complications to the car owner’s life. For example is the owner is traveling and needs service, having a different service department do anything can make the maintenance plan null. The cost may also be higher at another dealership.

Con: Newer Cars are not High Maintenance

Other than inspections and oil changes at regular manufacturer recommended intervals, and tire rotation, newer cars require very little maintenance. Pre-paid maintenance plans do not cover normal wear and tear in most cases, so when making the decision of purchasing a pre-paid maintenance plan you should consider this.

Con: Different Service Intervals

Sometimes, pre-paid maintenance plans provide service on a different schedule than the manufacturer recommends. Some manufacturers recommend different intervals between oil changes depending on the level of vehicle usage. Often these two are not the same and if you are a heavy vehicle user, the plan may not cover the actual time your vehicle needs this service.

Before you purchase any pre-paid maintenance plan, know what is covered by the plan and know what the manufacturer recommends as far as intervals between services. Find out is the service plan is a pay as you go plan: what will the same services will cost at an independent mechanic. Research these issues before you buy so you can be an informed buyer who makes the right decision. And if you encounter car dealer fraud contact a qualified attorney to have your right protected.