Should I Get a Prepaid Maintenance Plan on a New Car?

When you buy a new car, you may be offered a prepaid maintenance plan by the dealership.

While it’s tempting to want to protect your investment — if you can call a depreciating asset like a vehicle an “investment” at all — money expert Clark Howard says you should think twice before getting a prepaid maintenance plan.

What You Need To Know About Prepaid Maintenance Plans

One of our readers wrote in to Ask Clark wondering whether or not to get prepaid maintenance on a new car.

Money expert Clark Howard has a one-word answer: No. Here’s why:

“They want you to get a prepaid maintenance plan to continue an ongoing relationship with the dealer. But it does not violate the warranty if you have the scheduled maintenance work done elsewhere.”

That last part of what Clark said is particularly important to note. When you sign up for a prepaid maintenance plan, you typically lock yourself into having all maintenance done at the selling dealership.

But if you have the choice between taking your vehicle for maintenance to a dealership, a non-dealership chain or to an independent mechanic shop, you’re often better off with the latter.

Consumer Reports polled more than 40,000 of its subscribers who went to the repair shop over a one-year period between the spring of 2017 and the spring of 2018. The results speak for themselves.

“We found that consumers who go to independent mechanics have a more satisfying experience and are more successful at negotiating a discount than those who go to car repair chains or dealerships,” the magazine noted.