Illustration for article titled Are Those Pre-Paid Service Plans Worth It?
Image: Justin Westbrook (Jalopnik)

As Jalopnik’s resident car buying expert and professional car shopper, I get emails. Lots of emails. I’ve decided to pick a few questions and try to help out. This week we are discussing pre-paid service plans, aftermarket warranty coverage, and a super expensive Aston Martin lease.

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First up do those pre-paid service plans really save you money?

I recently bought a 2019 GTI. I let the finance guy talk me into the VW Care Plus package for a few grand. All the maintenance is covered for four years, up to new brakes, belts, when those need replacement. My question: how much of an idiot am I for buying this? I was able to resist the pressure on the other upsells, but he got me on the maintenance. Just wondering how much I should be kicking myself. For reference, I drive between 12K-15K a year, so figure one or two oil changes in addition to the factory scheduled maintenance.

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While some folks will say that finance office upsells like pre-paid maintenance and warranties are always a waste of money, often it’s a case by case basis depending on the customer and their usage. You said you spent “several grand” which is a bit ambiguous but I will assume for these calculations that is $2,000 for a four-year plan.

You project that you will put between 48,000 to 60,000 miles on that car. If we assume dealer oil changes run about $75 each for a full synthetic service that would be $600 in oil changes alone. If you service all four brakes that could run about $500 per axle for rotors, pads, and dealer install rates. So now we are up to $1,600 for brakes and oil changes. If you drive on the lower end of your estimate at 48,000 miles you likely won’t hit the expensive service intervals within that four-year term. However, if you push up to 60,000 miles within that time, you may hit the transmission service interval, which I was recently quoted $600 for my GTI, I opted to get that done at a local shop instead, but when we roll that into your plan you may come out slightly ahead depending on how much you actually paid for the VW Care Plus.

Usually, these plans don’t save customers a ton of money but depending on how they use their car it could put a few bucks in their pocket, for lower mile drivers they are likely better off just paying for those intervals a la carte.

Next, if you have you buy an aftermarket warranty on a car that still has the factory coverage, who picks up the tab first?

If I purchase an extended warranty with a used vehicle and still have the manufacturer’s warranty on some component that fails, is the aftermarket warranty provider likely to force me to deal with the dealer/manufacturer or can I take my vehicle to a shop of my choice and have the aftermarket warranty provider covers the repair?

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Typically, if you buy an aftermarket warranty, that warranty acts as an extension of the factory coverage once that manufacturer warranty expires. Those third-party companies certainly don’t want to pay out when someone else can pay for that repair. Where this may be an inconvenience is when the closest dealer for the brand you own is far away, so any warranty work will require some travel. You need to check the language of the extended warranty contract closely but I bet the additional coverage won’t be applicable until the factory warranty is gone.

How can someone that doesn’t love their very fancy and expensive lease be more financially smart?

I’m currently leasing a 2018 DB11 for about $3,300 a month. I’m 9 months into a 36-month lease. I traded in a Tesla for this car and absorbed a 30k loss on it and rolled it into the Aston Martin lease.

I’m not loving the car anymore (I have mental problems) and I want to be more financially smart. What do you think my best options are?

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Holy moly those are some serious payments on that Aston lease! While we are likely to get some comments from folks who don’t have a lot of sympathy for someone who can afford a lease on an Aston that has a higher payment that most people’s mortgages, I commend you for at least recognizing that you want to make a change in terms of your financial strategy.

If you are looking for the financially smart move ride out the Aston until the end, because you are already in the hole with a negative equity roll over and doing that again is going to put you further behind. Once the Aston lease is up, start fresh and I would suggest buying used cars as that will give you more flexibility in terms of ownership time. If you get something cool and want to toss it in a year or two, it’s a lot easier to do that if you aren’t leasing.

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Got a car buying conundrum that you need some assistance with? Email me at tom.mcparland@jalopnik.com!

Tom is a contributing writer for Jalopnik and runs AutomatchConsulting.com. He saves people money and takes the hassle out of buying or leasing a car. (Facebook.com/AutomatchConsulting)

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