Purchasing a service contract “” sometimes referred to as an extended warranty “” can be confusing and costly, so understand what’s covered before you sign the agreement.
By Janet Groene, F47166
Read the fine print; you get what you pay for; know your rights. When it comes to service contracts for your motorhome and its components, you likely have heard all the warnings. Nationwide, state attorneys general report that service contracts are at the top of the complaint list.
Full-timers can face special challenges. You may have purchased the service contract in one place and could be on the other side of the continent when problems arise. Before you buy or renew a service contract, here are some things to keep in mind.
- As noted in Kiplinger’s Personal Finance magazine (December 2009), the average automobile extended warranty costs $1,790, with $795 of that amount dealer profit. Now that you know the size of the markup, ask for a discount. No guarantees, but you just might get one.
- More than half of the 50 states allow people a cooling-off period during which time they can change their minds after signing a contract. As a full-timer who can’t know every law of every state, look into this before purchasing a service contract. You need to know how long you have before the deal becomes permanent (ranging from no grace period to as much as 30 days) and whether this state allows you to cancel the contract, change some of its terms, neither, or both.
Should you have a lawyer read the contract? It’s a good idea, especially one who is familiar with automotive terms.
- Know what coverage you have through manufacturer warranties (including component warranties), plus any dealer follow-ups that were laid out in your original purchase deal. There’s no need to pay again for coverage you already have.
- Things get sticky when it comes to what repairs are necessary, which parts are covered, and how they are covered. For example, what happens if an oil light or gauge malfunctions, your motorhome runs out of oil, and the engine seizes? Perhaps your policy covers the oil gauge under warranty, but the engine isn’t covered because you let it run out of oil. So, all you get is a new oil gauge. Or, maybe the engine was covered but the oil gauge was not, so you may have to pay for the new engine, because the part that failed was not covered.
- Look through the fine print to learn about the deductible. A high-deductible service contract can be a plus, because it keeps the cost down. But is the deductible calculated per service trip or per component? Let’s say a series of failures leads to a transmission meltdown. If you have to meet the deductible for each component, the service contract will pay far less than the total repair bill.
- Is the service contract based on elapsed time (a certain number of months or years), accumulated mileage, or some combination? Full-timers will likely average more miles per year than someone who uses his or her motorhome strictly for vacation purposes. So, make sure the warranty fits your usage needs.
- Does the contract require you to pay for repairs and then submit a bill to the company for reimbursement? Try to avoid this type of agreement. You could be left holding the entire bag, or you could find yourself lining up with other claimants against a company that is under bankruptcy protection.
- Know exactly who backs the service contract, then check with chambers of commerce, the Better Business Bureau, and other authorities to determine whether the company has had complaints against it. If the deal involves the retailer who sold the service contract and a third party who is responsible for fulfilling the warranty, check out both companies.
- After repeated failures and repairs, a reader reported that he planned to make an RV claim under the “lemon law.” But coverage under this type of protection varies by state, and not all states treat motorhomes as they do other vehicles. In May 2009 a suggested motorhome-specific lemon law was created by a work group that included representatives from the RV industry (including FMCA) and state lemon law administrators. This document was made available to state legislatures to incorporate into their own lemon laws if they saw fit.
- Does the service contact include payment for labor at a stated hourly rate? If trouble hits when you’re in a high-priced area, you may have to pay the difference.
- Have you kept your part of the bargain? To keep a service contract in force, you may have to prove that you had inspections, fluid changes, and replacements done according to a stated maintenance schedule.
- It’s an added step to investigate the financial health of the company behind the service contract, but bankruptcies happen. Pulling a credit report on a company costs several hundred dollars, but you can learn a lot just by doing an Internet search for the company by name plus keywords such as financial health, credit rating, rumor, scandal, litigation, or bankruptcy. If you’re lucky, this will bring up references in magazines, newspapers, and blogs to that company. If the company is publicly traded, see how its stock is doing. Read what analysts have to say about the stock and the company behind it.
- As a full-timer, you need freedom to roam. How restricted are you in choosing a service center that will do the work you need?
Honest dealers have sold what turned out to be worthless service contracts, and perfectly honest service contract companies have gone bankrupt despite their best efforts. Get the latest, most unbiased information possible when looking for this type of protection on your motorhome.
Books And More
One of the most exciting craft books in years is One-Yard Wonders: Look How Much You Can Make with One Yard of Fabric! ($19.95, Storey Books). It’s tailor-made for space-pinched full-timers. If you’re one of those crafters who can’t pass up the remnants bin in a fabric store, this book will set your creative imagination on fire. And should you be a full-timer who sells homemade items at craft shows, you may just find some real moneymakers here.
The 304-page hardcover book is filled with color illustrations, and the projects are described step by step with full-size patterns, tips, and a color photograph of the finished product. It includes 101 sewing projects ranging from purses to a jewelry storage roll. Make gifts for everyone on your list all year, or work with only one or two styles that become your bestsellers at shows.
A must-read for all crafters is The Handmade Marketplace: How to Sell Your Crafts Locally, Globally, and Online ($14.95, Storey Publishing). Unlike other craft books, this is solely about the business of crafting. There are no patterns or tips on woodworking or knitting. The entire book is packed with great ideas for making your product stand out in a crowded marketplace, whether you’re selling in person or on the Internet.
Author Kari Chapin is an expert in marketing and publicity, and she uses input from experts in design, stitching, and other do-it-yourself skills. It adds up to a unique book for today’s crafters. No matter where you live and travel, the Internet opens a worldwide market for your goods.
Both One-Yard Wonders and The Handmade Marketplace can be purchased at bookstores, through online booksellers, or from the publisher by calling (800) 441-5700.
Letters to Zerky ($27.00, Nickelodeon Press) will make you cry. Then you’ll make plans for your own bucket trip abroad in an RV. Bill Raney was a self-admitted California hippie when he and his wife, JoAnne, and young adopted son Eric Xerxes “Zerky” Raney dropped out to tour Europe and Asia in their van. After they returned to California, his wife passed away while eight months pregnant, and, a year later, Zerky died at the age of 4. The old letters to Zerky and a journal JoAnne kept of the trip combine to make this book a loving tribute to the wife and son. It’s a handsome hardback book, one you’ll read more than once before loaning it to everyone you know.
Do you have a collection of guidebooks piling up in your cabinets that you never plan to use again? Now you can sell them via www.guidegecko.com. You also can buy used guides from the site at a big savings. If you want to write and sell a guidebook, Gecko can lead you through that, too.
Sell What You Know
You may not think of yourself as a professional consultant, but if you know more than most folks about a topic or skill, you can sell that knowledge via www.myknowledgegenie.com. The Web site leads you through the process step by step. Basically, you write your own how-to book on anything from antique gun collecting to do-it-yourself shoe repair. If you know a lot about a topic, you can sell your smarts online as a genie. You must do your own promotion, driving people to the site via Twitter or your blog.
One “genie” is free; you pay a modest fee for additional genies if you have expertise in more than one field. If people are always coming to you for help with their crewel embroidery, small appliance repair, fly tying, or letter writing, you may just have a career ready to launch. Best of all, Internet earnings find you wherever you happen to be.