Labor rates—especially at franchised dealers—go up 5 to 10 percent peryear, and parts costs increase by a similar amount. I used to pay half the
labor rate in the 90s that I do now. But a contract bought now pays out atwhatever the rates and costs are in the future, making it somewhat
“inflation-proof.”
DEDUCTIBLES
A few companies still offer a $0 deductible, which can be great, though itwill cost more upfront. But many don’t, as it dramatically cuts the frequency (^)
of repairs if they make the lowest deductible $100. The good policies will atleast let you group several repairs under one service invoice.
invoice or per individual item repaired. TIP: Make sure you know if the deductible is per service^
Some offer variables deductibles as an option. To find out which is best foryou, figure out how many repairs it would take to recoup the cost difference (^)
between the various contract options. If it’s only one repair, go with a lowerdeductible; if the cost spread is greater (as it often is on higher risk cars),
and it will take three repairs to get the contract cost difference back, go withthe higher deductible.
WHO CAN WORK ON THE CAR