The New Car Service Agreements

Service Agreements that are offered from the dealer are a discounted package of pre-paid scheduled services.

 

For example, if a customer buys a new Subaru they will have a scheduled service that will occur every 7500 miles. However, the “F&I” manager can sell the customer a service agreement that would pay for services occurring every 3500 miles, this will in effect pre-sell these unscheduled services.

 

If you normally change your oil with greater frequency than the minimum factory requirements, this is a great deal. However, if you traditionally stick to scheduled factory maintenance it is waste of money. 

 

It is very easy to verify the pricing of the service agreement. Simply add all the scheduled maintenance costs together and see if the service agreement is less than that total.

 

They are a profit center for the dealer if they include more services than are required by the manufacturer.