You also may write to this address to receive a free copy of Best Sellers, a listing of all the FTC's consumer publications. You may not benefit from a service contract if the product is unlikely to need servicing or if the potential cost of repairs is very low. You may have other expenses after you buy a service contract. Service contracts, like insurance policies, often have deductible amounts. Or, you may be charged each time the item is serviced.
Some expenses are limited or excluded.
For example, auto service contracts may not completely cover towing or rental car expenses. In addition, you may have to pay cancellation or transfer fees if you sell the covered product or wish to end the contract. If the service contract is offered by a local retailer or dealer, you may only be able to get local service. Consider the possibility that problems may develop while you are traveling or after you move away from the area. The Federal Trade Commission often gets letters from consumers who ask what they can do about a service contract company that has gone out of business and cannot repay claims.