4 Tips to Help You Get Value for Money
If the discussions on RV internet forums are indicators, then RV service contracts in general are controversial—with both committed advocates and detractors. None of these contracts have satisfied 100% of their purchasers. So, do they represent good value, or are they products merely intended to create profits for sellers? The answer is that service contracts can be worthwhile if you pay a fair price, and you buy the right features at the right time. Here are some tips that will help you get value for money.
1. Know the Difference Between a Warranty and a Service Contract
An RV service contract isn’t a warranty, which is offered by a manufacturer that will stand behind a defective product and make needed repairs for a period of time. The cost of a warranty is built into the cost of a new RV unit. It’s worth noting that not all warranties are equally supported. Some RV manufacturers have an outstanding reputation for customer satisfaction, but some do not. You’ll need to check this out.
RV service contracts are intended to provide coverage for mechanical repairs for a set period of time for a flat fee. Service contracts extend some or all of the warranty coverage beyond the term of the original warranty. You can also purchase them to provide “peace of mind” repair coverage for used units, where the original warranties have expired. Often service contracts include valuable roadside assistance/towing overages as well. They generally exclude:
- non-mechanical or non-electrical items
- physical damage
- wear and tear
- repairs due to negligence or improper use
- breakdowns outside the United States or Canada
2. Consider Your Needs
Obviously, the first step is to consider your unit and your circumstances, so you’re clear about what you do and don’t need. Then, find out what is covered and what is excluded in any given service contract. Note that when shopping for a service contract, it also makes sense to shop for extended-warranty plans, especially if your RV’s warranty coverage is nearing its end. Of course, if the RV in question doesn’t have any warranty coverage (e.g., it’s used), then you really should consider a service contract. This is especially true if the “great deal” unit you’re considering is known to be somewhat unreliable or higher maintenance.
3. Work with Reputable Service Contract Providers
It’s important to deal with a financially stable service contract provider. If the seller goes out of business, you will likely lose any further coverage. Think about buying from the dealer who sold you your unit. Dealers have some motivation to keep you as a happy customer and will likely do most of the necessary service on your unit. Professional RV dealers value their reputation and want to develop repeat customers. It’s even better if your selling dealer already has a great service reputation. (Again, this is something you need to check out.)
You should also look into plans offered by dealer groups or RV clubs such as Good Sam/Camping World and Jayco/Protective, a manufacturer-sponsored program. Below is a list of other sources:
- American Guardian Warranty
- Assurant Group
- Easy Care
- Interstate National Dealers Services
- Phoenix American Warranty Co.
- Protective Asset Protection (an RVDA endorsed program)
- REDEX/Priority One
- Route 66
- RVA Protection Company
- United States Warranty Corp.
- Wholesalewarranties.com (an Internet based direct seller)
4. Price it Right
Overpaying is never good. But if you underpay, who knows if your provider will be around in a year or two when you might need the coverage? If a deal is too good to be true, you’re probably wasting your money. Although reasonable pricing can be difficult to quantify, given the differences in coverage and deductible amounts, a good rule of thumb is to estimate the cost of basic coverage at 1% per year times the purchase price.
Get a couple of competitive quotes, avoid high-pressure sales pitches, and don’t be afraid to do a little negotiating. Service contracts are a significant profit center for sellers, but there is some latitude on pricing. Providers should be open to negotiating a bit, especially with consumers who have done their homework.