What are the requirements of the Federal Law for the elimination of manufacturing defects in used cars?

In the United States, there are various mechanisms that ensure a positive and satisfactory consumer experience with the goods he purchases, one of these mechanisms is the used car insurance contract.

U.S. federal law provides different numbers to protect a used car buyer from hundreds of other wealth buyers, and one of the least known is Contract Insurance.

What is an insurance contract?

According to the information in the Service Agreement, this is a promise to perform (or pay for) certain repairs or services. Although service contracts are also sometimes referred to as extended warranties, these types of contracts do not meet the definition of a warranty under federal law.”

What is the difference between a guarantee and an insurance contract?

Insurance contracts consist of an additional service for which an additional fee is charged, on the contrary, guarantees exist in different contexts, which depend on what is reflected or not in the final contract and the purchase guide provided by the seller.

The said seller may be a private person or a dealer, but in any case he must comply with a number of provisions under the laws regarding warranties in each state of the union.

Do I need a service contract?

There is a long list of considerations you need to take into account before deciding whether you need a service contract or not, some of the most important are:

1- If the cost of repairing your used car exceeds the value of the contract.

2- If the contract covers the cost of car accidents.

3- If there is a return and cancellation policy for the service.

4- If the dealer or service company has a good reputation, in this case many companies offer services through third parties.

How can I request a service contract?

To formally enter into a service contract, you must discuss with the manager of the dealership you are visiting to see if they provide this benefit. If the answer is positive, you must fill in the column corresponding to the line "service agreement" in the buyer's guide.

This last step is only possible in states where this service is regulated by certain insurance laws. 

In case the described line is not in the buyer's guide provided to you, try to consult the seller to find an alternative or solution.

Additional, very important information is that if you purchase a service contract within 90 days of purchasing a used vehicle, the dealer must continue to honor the implied warranties on the parts covered by the contract.

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