Should I get a prepaid car maintenance plan?

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A prepaid car maintenance plan is an add-on feature that covers the expected maintenance your car will need while you own it. Typically dealerships will offer a prepaid car maintenance plan along with other extra-cost options such as extended warranties, credit insurance and anti-theft devices while at the showroom.

The best way to decide if a prepaid maintenance plan is the right financial choice for you is to research expected maintenance costs for your vehicle and compare that with the price you’re offered.

What is a prepaid car maintenance plan?

A prepaid car maintenance plan is a contract that covers scheduled maintenance for a car over a set number of years. A prepaid car maintenance plan isn’t the same as an extended warranty, which covers certain unexpected repairs once the factory warranty expires — instead, it covers the costs of specific, scheduled preventive maintenance listed in the vehicle’s owner’s manual, such as tire rotation and oil changes.

Prepaid maintenance plans may enter the discussion when you are buying a new vehicle that doesn’t have scheduled car maintenance built into the retail price or when purchasing a used car no longer covered.

Several manufacturers, such as Jaguar, Toyota, BMW, Volvo, MINI and Land Rover, all offer prepaid maintenance plans. Some of these factory plans also include wear-and-tear items, such as windshield wiper blades and brake pads, but some don’t, which is why it’s critical to do your research before heading to the showroom.

Are prepaid maintenance plans worth it?

As with most aspects of the car buying process, doing the math before sitting down with the dealer is the key to saving money. To decide if a prepaid car maintenance plan is the right choice for you, you must compare the price of the plan with the estimated cost of the scheduled or out-of-pocket costs during the coverage period.

Your owner’s manual should detail the specific maintenance you’ll need and the intervals at which you’ll need it. To find specific costs, you can call the dealer service manager and ask for a breakdown of scheduled maintenance costs. Edmunds also offers a maintenance cost calculator and a cost-to-own calculator that can help you determine the scheduled maintenance costs for specific models at typical service intervals.

If the estimated cost for scheduled maintenance of your new car for its first 30,000 miles is $400 and you’d pay $800 for the plan, a prepaid car maintenance plan is ultimately not worth it. If you’d pay $250, on the other hand, it’s a savings.

Pros and cons of prepaid car maintenance plans

There are several factors that you should weigh when deciding if a prepaid car maintenance plan is right for you.

Pros

  • Prices for covered services are locked in.
  • Customers with prepaid maintenance plans typically have the convenience of an express checkout when picking up their vehicle.
  • Prepaid costs may be discounted compared to normal maintenance costs.

Cons

  • Service intervals may not match those called for in the owner’s manual.
  • If you are financing the car purchase, you pay interest on the plan cost.
  • Service must be performed at the dealership where you purchased the car.

The bottom line

For some drivers, a prepaid car maintenance plan removes future car-related headaches by cutting out the decision making. But for those who already have a good relationship with a body shop, it might not be worth it to pay ahead and be locked into the dealership service team. To determine whether a prepaid maintenance plan will benefit you, take the time to research expected costs and compare that figure to the plan cost offered to you.

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Written by
Rebecca Betterton
Auto Loans Reporters
Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers in navigating the ins and outs of securely borrowing money to purchase a car.
Edited by
Student loans editor