A Leased Car Carries Its Own Rulebook: Sort the Lease Duties From the Service Contract Duties

Buying a service contract for a leased car is a different decision from buying one for a car you own. The lessor usually holds title, the lease sets its own maintenance and return conditions, and the contract may run longer or shorter than the lease. Before you compare any contract, put the two sets of rules side by side.

Who holds the paper

Find out who is named as the contract holder and whether the lessor must consent to the purchase. Ask what happens to the contract if the lease ends early, if the car is bought out at the end of the lease, or if the car is sold or traded in before the term runs out. Each of those moves can change who has the right to make a claim.

Match the maintenance rules

Read the lease's maintenance requirements and the contract's maintenance requirements next to each other. If the lease requires service at set intervals and the contract requires service at different intervals, following one may not satisfy the other. Ask in writing whether a repair made under the contract counts as maintenance for the lease, and whether a record from the contract administrator is acceptable at lease return.

Match the end dates

A contract that expires after the lease ends is paying for coverage on a car you no longer drive. A contract that expires before the lease ends leaves a gap. Compare the contract's term, its mileage limit, and its expiration rules against the lease's end date and mileage allowance. If the lease might end early, the money-back terms matter more than the coverage list, so read the cancellation and refund lines closely.

Questions to take to the dealer

Ask for the lease's maintenance and return clauses in writing before you compare contracts. Ask whether the lessor has approved this particular contract. Ask who to call if a repair is needed during the lease, and whether that call goes to the lessor, the administrator, or both.

If an early end to the lease is a real possibility, look at the list of vehicle service contract companies by money-back period, longest first and read each refund clause against your lease terms before you decide.