Should I Buy a Prepaid Maintenance Plan for My New Car?

A prepaid maintenance plan can potentially save you money, as it allows you to pay for years of vehicle maintenance upfront. However, maintenance is usually more expensive at a dealer than at a private shop, and the plan requires you to return to the dealer that you purchased from. Determine your long-term costs before purchasing a maintenance plan.

Plan Details

Go over the details of the maintenance plan with the dealership representative who offers it to you. Make sure you have a clear understanding of which items are covered and which are not. Often, the contract covers only scheduled maintenance items, such as oil changes and tire rotations. Maintenance items such as brakes, windshield wipers or actual repair items are not covered. The prepaid maintenance plan is not an extended warranty. An extended warranty is more expensive than a service plan, but covers much more.

Price Comparisons

Go to the dealer's service department to gauge the true cost of the service schedule. Most cars need oil changes every 3,000 miles (some cars can go longer) and tire rotations every 6,000 miles. Ask the service department to provide you with the cost of the services for your vehicle and compare the maintenance plan value to the cost provided by the service department. Service plans are a source of profit for a dealership, and you may find that purchasing it doesn't save you money.

Cost

Once you've determined the cost of regular servicing against the prepaid option, ensure the plan is less money. Otherwise, purchasing it is not financially beneficial. You can negotiate the price of the plan, just as you can most aftermarket items offered at a dealership. If you can negotiate the price to one lower than you'd pay over the long term, then the maintenance plan is worthwhile. Do not finance the cost of the plan, as you'll likely pay interest on it.

Considerations

You can negotiate free oil changes with your dealer. Based on an average of 12,000 miles per year, you will likely need four oil changes, which is relatively inexpensive for a dealer to pay for. Tell the dealership you want a year's worth of oil changes before you agree to buy the vehicle, and you can save money by paying only to rotate your tires. If you use an independent shop for your servicing, compare costs. Dealerships often charge more for servicing, so you may also save money by servicing elsewhere.