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Guide: service contracts

Questions to ask before you sign a service contract

Six from the FTC's guidance on auto warranties and service contracts, plus one of ours.

7
Questions, in the order to ask them
Optional
Service contracts are optional and sold separately, the FTC notes

Federal Trade Commission, read Oct 2, 2026. See source

A car owner reads paperwork beside his car in a service bay.
On this page
  1. Read the contract before the call
  2. The questions, in order
  3. Pitches to be wary of
  4. Sources

Read the contract before the call

A vehicle service contract is optional. The FTC notes prices can range from several hundred to several thousand dollars, sometimes plus a deductible per repair1.

Read a sample contract before any sales call; some companies publish them, CarShield among them2.

The questions, in order

  1. Does it overlap my existing warranty?

    Compare the contract dates with the manufacturer's warranty.

  2. What does it cost in total?

    Price plus any deductible per repair or per visit.

  3. Who backs it?

    The manufacturer, the dealer, or an independent administrator.

  4. What is covered and excluded?

    Including towing, rental car and whether used or remanufactured parts can be used.

  5. Where can repairs be done?

    Any licensed shop, or only certain repair centers.

  6. What maintenance must I keep?

    Missing required maintenance like oil changes can void coverage.

  7. Our addition: can I cancel, and what refund applies?

    Not on the FTC page we read, but worth checking in the sample contract's cancellation terms.

Pitches to be wary of

The FTC warns about calls, texts and mail using phrases like 'Motor Vehicle Notification' or 'Final Warranty Notice'. They are usually not from your dealer or manufacturer and often push for payment details right away1. Do not give card or bank details on an unsolicited call.

Sources

  1. Auto Warranties and Auto Service ContractsFederal Trade Commission, read Oct 2, 2026
  2. Sample ContractsCarShield, read Oct 2, 2026

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Prices and rules are what the named source published on the date we read it. The provider's own page and contract, and your state's DMV or court, are the final word.