Parts get most of the attention in a service contract, but labor often makes up a large share of a repair bill. A contract can say a great deal about parts and still leave labor open to a formula you have never seen. Before you commit, find the labor section and read it as carefully as the list of covered components.
Ask how labor time is set
Some contracts pay labor based on a published industry guide that assigns a standard time to each job. Others pay the actual time the shop logs. Ask which method applies, and ask whether the guide is named in the contract or referred to only by a general phrase. A guide you cannot look up is a guide you cannot check against your invoice.
Ask about caps on time and rate
Look for any limit on the hours covered for a single repair, or on the hourly rate the provider will pay. A cap is not a bad sign on its own, but it changes what a shop can charge you and what you may be asked to pay directly. Ask the provider to explain, in writing, what happens when the shop's rate is higher than the rate the contract pays.
Check diagnosis and teardown time
Many repair bills start with a diagnosis, and some of the labor is spent taking the car apart just to find the fault. Ask whether diagnosis time is covered, whether teardown time is covered if the failure turns out to be excluded, and who approves the work before the shop starts. The answer to that last question often decides whether the labor is paid at all.
Read the labor clause, not the sales sheet
A sales sheet tends to describe coverage in broad terms. The labor clause tells you what the provider will actually pay for. Compare the clause word for word between any two contracts you are considering, and mark every place where the wording leaves the rate, the hours, or the approval step open.
For a side-by-side look at how companies handle these terms, the term-by-term comparison is a useful starting point. Check every entry against the contract you are given, because a published table is only a summary of the paper.