A service contract is priced as if it adds protection. Some of what it promises may already be on the car. The manufacturer's original warranty, and sometimes a separate powertrain warranty, runs for a set period, and the parts it covers are often the same parts a service contract lists. Where the two overlap, the extra money you paid for the contract buys you little for those parts. That is the cost driver most buyers never price in.
Find the overlap before the price
Pull the factory warranty booklet for your car and note the coverage period for the powertrain and for the general vehicle. Then read the contract's covered parts section side by side with it. Look at engine, transmission, drive axle, and electrical systems in particular. If the contract starts only after the factory coverage ends, the overlap may be small. If it starts at purchase and lists the same components, you are paying for coverage you already have for part of the same period.
Ask when the contract actually starts
Ask the seller in writing when the contract's coverage begins. Many contracts take effect at purchase, but some begin only when the factory warranty expires, and some have a waiting period before a claim is accepted. Get the start point written in the contract itself, not just in the sales paperwork. Compare that start point with the factory warranty end point shown in your car's own documents.
Count the parts that are paid twice
Make a short list of the parts the contract names that the factory warranty also names during the same months. Those lines cost you money without adding protection. Then list the parts the contract covers that the factory warranty does not, if the contract lists any. Only that second list is where the contract is adding something. The price you pay should be judged against that second list, not the full one.
Other things that move the value
Overlap is one driver. Others include whether the car has a separate powertrain warranty from the manufacturer, whether the dealer who sells the contract also sells the factory coverage, and whether the contract transfers to a later owner. If you expect to sell the car within a few years, a contract that transfers may be worth more to you than one that does not. Check the transfer section, then the cancellation section, since those two pieces together decide what the contract is worth in your hands.
Where to check the published figures
This site lists the published terms for the companies we review, including which contracts post a sample you can read before buying. Start with the list of companies that publish a sample contract, and read the covered parts section against your factory booklet before you compare anything else.