Dennis Fichtner from Laurel Chevrolet is cheapest I've seen.
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Ever considered going “self insured?”
Put the cash of the service contract in a high yield savings account and watch it grow. Debit the account for any repairs.
Example:
My dealer wanted $3975 for “8years, 96k miles”. But of course that is truly only 5 additional years and 60k additional miles from the factory warranty.
Deposit $3975 in a high yield savings/CD (you can find one for 5% these days.
After 36 months you will earn 643.00
Your balance will be 4628.
Now, let this cash ride and withdraw only when you need repairs.
If you never make a withdrawal, you will earn $1954 in interest in this 8 year period.
Thus, you would have $5500-6000 available for repairs over this 8 year period…depending on the repair withdrawals you make (and don’t withdraw for maintenance, cause service contracts don’t cover maintenance either).
My bet, and those offering service contracts bet the same, is that your vehicle won’t need $6k in repairs before you hit 96k miles, trade it, total it, etc.
It’s just math…and the people peddling these contracts know it…it’s an expensive insurance policy.
Cost of the policy goes up and your advantage goes down if you roll the service contract into your loan and pay interest on it. You’d be better off making monthly deposits to the account I mention above if you can’t drop the whole $4k in up front…will make slightly less interest, but at least won’t pay interest.
