LEGITIMATE SERVICE CONTRACTS
Thankfully, there are good service contracts out there. The cost of a policyfrom one will be determined by these factors:
- A history of the cost and frequency of repairs on that vehicle
- The options (like all-wheel drive, turbochargers, or navigation) on thevehicle
- The length of coverage (years and miles)
- The items covered
- The deductible (if any)
- How old the vehicle is and how many miles are on it
The insurance actuaries figure out what the history of repair costs andfrequency has been on similar cars and trucks, coming up with a cost. To (^)
this is added the profit margin and costs and fees for the administrator,insurance company itself, and the seller (dealership, salesperson, etc). (^)
That is why there isn’t a huge variance on the costs of good servicecontracts from legitimate players in the game. There are some variables, (^)
including which of the industry-rated guidebooks for repair times they allowto be used (Chilton and Alldata) by the repairing facility, and what source of (^)
parts they authorize (OEM, aftermarket, or both).