Jennifer Moore
Owning a car comes with its fair share of expenses, and at some point, something will likely go wrong. Whether it’s routine upkeep or an unexpected issue, repairs add up fast. On average, drivers spend about $652 annually on both scheduled and unscheduled maintenance, with a major repair occurring roughly every two years.
To help with these costs, dealerships and manufacturers offer prepaid maintenance plans. These cover routine services like oil changes, tire rotations, and inspections for a fixed price upfront. But is it worth the investment? In this article, we’ll discuss the pros and cons to help you decide.
The Pros of a Prepaid Maintenance Plan
Should you really invest in prepaid maintenance? It’s a fair question. Some people hesitate because they assume it's just another way for dealerships to make money. Others worry they might not actually use all the services included in the plan. But when you break it down, prepaid maintenance has some real benefits that can make car ownership a little easier.
Potential Savings
Let’s start with the big one: cost. Paying for maintenance upfront might seem like a lot, but in many cases, it locks in the price of services before inflation or dealership price hikes hit. That means you could end up paying less overall compared to paying out-of-pocket for each visit. Some plans also bundle services together at a lower rate than you’d get if you paid individually.
Convenience
Life gets busy, and it’s easy to put off routine car maintenance until a problem forces you into the shop. A prepaid plan helps keep you on track. Since services are already covered, there’s no second-guessing whether you should skip an oil change this month. You just book your appointment and go—no surprise charges, no worrying about today’s service pricing.
Resale Value
Thinking about trading in or selling your car down the road? A prepaid maintenance plan can be a selling point. Potential buyers like to see that a vehicle has been well-maintained, and having a documented service history with a dealership can make your car more appealing.
Common Questions About Prepaid Maintenance Plans
- What if I sell my car? Some plans are transferable, which can be a nice perk for the next owner.
- Do I really save money? In many cases, yes—especially if you keep your car long enough to use the full value of the plan.
- Am I locked into one dealership? Most plans require you to use a specific dealership or network, so that’s something to consider.
The Cons of a Prepaid Maintenance Plan
While prepaid maintenance plans have their perks, they’re not always the best fit for every driver. Before signing up, it’s worth considering the potential drawbacks—because the last thing you want is to pay for something that doesn’t actually save you money in the long run.
Upfront Costs
One of the biggest downsides? You have to pay for everything upfront. That can be a tough pill to swallow, especially if you’re already stretching your budget to cover a car payment, insurance, and other expenses. While the idea is to save money over time, the immediate hit to your wallet might not be worth it if you don’t plan on keeping the car for several years.
Coverage Gaps
Prepaid maintenance plans typically cover routine services like oil changes, tire rotations, and fluid top-offs, but what about brakes, batteries, or unexpected repairs? Those likely aren’t included. If your plan doesn’t cover the services your car actually needs the most, you could still end up paying out-of-pocket for maintenance on top of what you’ve already paid.
Overpayment Risk
Here’s something to think about: will you really use everything in the plan? Some people end up paying for more maintenance than they actually need, especially if their driving habits don’t match the plan’s schedule. If you don’t drive much, or you prefer to take your car to an independent shop, you might not get your money’s worth.
Common Questions About Prepaid Maintenance Risks
- What if I don’t use all the services? Unfortunately, you likely won’t get a refund for unused maintenance.
- Can I go to any mechanic? Most plans require you to visit a specific dealership or service center. If you move or prefer another shop, the plan may not be as useful.
- Does it cover major repairs? Typically, no. Prepaid maintenance focuses on routine services, not big-ticket repairs.
Factors to Consider Before Getting a Prepaid Maintenance Plan
We know we threw a lot at you, and you have a lot to think about when it comes time to purchase your next vehicle. The truth is that prepaid maintenance plans can be a great deal for some drivers and an unnecessary expense for others. Before signing on the dotted line, here are a few things to keep in mind:
Your Driving Habits
Do you rack up miles quickly, or is your car mostly sitting in the driveway? High-mileage drivers tend to get the most value out of prepaid maintenance since they need frequent oil changes, tire rotations, and inspections. If you only drive a few thousand miles a year, you might not hit the service milestones needed to make the plan worthwhile.
Your Maintenance Needs
Some vehicles require more frequent maintenance than others. If you’re driving a model with a reputation for needing regular servicing, a prepaid plan might be a good way to keep costs predictable. But if your car is known for reliability and low-cost maintenance, you could end up overpaying for services you don’t really need.
Plan Costs vs. Individual Service Pricing
Not all prepaid maintenance plans are created equal. Some offer real savings, while others charge more than what you'd spend if you just paid for each service separately. Before committing, take a moment to compare the plan’s total cost against the price of those same services at the dealership or a trusted repair shop.
Coverage Limitations
What exactly does the plan cover—and just as important, what doesn’t it cover? If you’re expecting prepaid maintenance to take care of major repairs like brakes or battery replacements, you might be in for a surprise. These plans are usually focused on routine maintenance, so be sure to read the fine print.
Best Fit: High-Mileage, Long-Term Drivers
Here’s the scoop—prepaid maintenance plans tend to work best for people who drive a lot and plan on keeping their car for years. If you’re putting thousands of miles on your vehicle every month, locking in maintenance costs now could save you money later. But if you don’t drive much or trade in your car every few years, you might not use the plan enough to justify the upfront cost.
Is Prepaid Maintenance Right for You?
Prepaid maintenance plans come with both advantages and drawbacks. For high-mileage drivers who keep their cars long-term, these plans can offer savings and convenience. But for those who drive less or prefer flexibility, paying as you go may be the better option.
If you're looking for ways to manage your vehicle expenses beyond routine maintenance, RateWorks can help. With auto refinancing, you may be able to lower your monthly payments, freeing up funds for the services your car actually needs. Request a free quote today.
