SCIC Issues Tips For Buying Automobile Service Contracts and Avoiding Scams

"The vast majority of service contracts are sold by reputable, licensed companies that abide by current regulations, adhere to high principles of customer service, and are protected by financial reserves and/or insurance," said Timothy J. Meenan, Executive Director, SCIC.

    --  Most service contracts are sold face-to-face at the point of sale from
        reputable automotive dealerships.  Many reputable providers administer
        and service the contracts sold through these outlets, and also sell them
        independently, some via the Internet.
    --  Do not buy a service contract if the provider will not supply you with a
        copy of the contract terms and conditions prior to purchase.
    --  Be alert to service contract providers who use unsolicited mass
        marketing techniques, such as direct mail and telemarketing (e.g.
        "robo-calls").
    --  Avoid purchasing service contracts if you feel overly pressured by sales
        personnel.  Service contract coverage for autos can typically be
        purchased on the spot or days after the product purchase, giving
        consumers time to review the terms and research the provider.
    --  Thoroughly read and understand the terms and conditions of your service
        contract  and fulfill all responsibilities related to regular
        maintenance, such as oil and filter changes, etc.
    --  Most service contracts provide a 30-day, "free-look" period
        for consumers to review the contract and return it for a full refund if
        they decide not to purchase the service contract.
    --  Consumers should locate the name of the service contract provider on the
        contract.  If a contract does not list an administrator's contact
        information, contact your state Department of Insurance or the Better
        Business Bureau to determine if the company is authorized to do business
        in your state.  Keep in mind that not all states regulate service
        contract providers and that many states that do exempt manufacturers
        from regulation.
    --  While many e-providers offer competitive pricing and reputable service,
        use caution when purchasing a service contract over the Internet and
        guard against "phishing" scams by knowing who you are giving
        information to.

    --  Maintain a dedicated file for contracts, receipts, and maintenance
        records and use the service contracts as often as needed and applicable
        to enhance product use and maximize investment.

About the SCIC

The Service Contract Industry Council, www.go-scic.com, is a national trade association whose member companies collectively offer approximately 80 percent of the service contracts sold in the U.S. for home, auto, and consumer goods. Founded in 1989, the SCIC educates consumers about service contracts, encourages its members to pursue high standards of customer satisfaction, and has developed and promoted model legislation to regulate the industry with standards designed to protect the consumer and the industry.

SOURCE The Service Contract Industry Council (SCIC)

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