Some cars need coverage. Others need replacing, and a contract cannot make an old car new. Before you pay for a service contract, check whether the repairs you are already facing point to a vehicle that has run most of its useful life.
Look at the repair record, not just the last bill
Write down every repair over the life of the car, with the system each one touched. If the bills keep landing in different systems, such as brakes, then cooling, then electrical, the car may be wearing out overall. A single expensive repair in a car that otherwise runs well points somewhere else.
Ask what the next repairs are likely to be
Look at the car's age, mileage, and condition. Ask a mechanic you trust which repairs are likely next, and whether the car is worth keeping through them. Compare that list with what a contract would actually pay toward, based on its own written terms.
Check your own reserve
Ask yourself whether you have money set aside for car trouble, and whether a few days without the car would cost you work or school. A contract is one way to spread that risk. A savings habit is another. Either way, the contract does not change the age of the car.
Compare the contract with replacement
If you are weighing a contract on an aging car, set the total cost of the contract plus likely repairs against the cost of replacing the vehicle. Do not let the coverage list stand in for that comparison. Published waiting periods and money-back periods for the companies we track are in the term-by-term comparison, so you can check the figures yourself.
Questions to ask yourself
Is this one repair or a pattern? Would replacing the car solve the problem better than covering it? Do I have a repair fund? Would the contract still apply if I keep the car another year? If the answer depends on age or mileage limits, read those limits before you buy.