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Buying a car is one thing; maintaining the car to make it last long for you is another thing. When most people buy a car – whether it is brand new or used – one of the things they think to do is to insure the car.
Yeah, getting insurance coverage on your car is perfect, but getting a plan that will cover every possible damage to your car can be hella expensive. To curb the high cost of full insurance coverage while also having a service provider pay for most common repairs done on your car throughout its lifespan, a lot of car owners go for a Service Agreement Program – SAP.
A service agreement program is a contract that binds a car owner and a service provider; the contract sees the service provider take responsibility for the cost of repairs on the contracted vehicle. Of course, there are terms and conditions – rules – that apply. This article is mainly a guide on the service agreement program – SAP.
What is Service Agreement Program (SAP)?
A service agreement program is a contract on automobile repairs between a car owner and the service provider. This type of contract frees the car owner from paying for common repairs. So, put simply, if you get this contract for your car, you won’t have to pay for most repairs done on the vehicle.
This is a way of saving up some bucks for car owners, but there are rules that apply. A service agreement program is a paper contract; both parties – the service provider and the client (car owner) – have respective places to sign the contract papers to seal the agreement. The terms and conditions are all written down.
Of course, the service agreement program is not free – it is not cheap either, but it would save you some bucks. Signing an SAP would see you pay a certain amount of money to the service provider to seal the agreement. After that, the service provider is obliged to pay for the subsequent repairs done to your car.
Service agreement program is different from auto insurance but works in a similar way. Also, as a car owner, you must abide by the rules of the contract if the service provider must pay for repairs on your vehicle. There are rules meted out for breach of contract between both parties.
While this may sound so interesting to many car owners, it is important to note that some scammers randomly send out a service agreement program letter to take advantage of uninformed, vulnerable car owners. So, you should be careful with any SAP form or contract you’re about to sign.
Guide on Service Agreement Program – SAP
Hereunder is a rundown of how a service agreement program contract is structured, including all the details.
1. Legal Names of Both Parties
First things first, an SAP must include a section where clear details of the involved parties would be provided. Data to be provided in this section include legal names, date of birth, address (home/mail), vehicle details, license number, and any other needed personal details.
2. List of Inclusive Services
This section is practically the most important because it includes details of everything covered in the agreement.
In other words, this sector tells what and what not the service provider would have to pay for, on your covered vehicle. So much attention should be paid to this section – every service must be explained in clear detail.
3. Indicate Payable Amount and Frequency
A service agreement program contract document must indicate the amount a client (the car owner) will pay – and continue paying – over specific periods. For example, the contract may indicate that the car owner will pay $500 yearly, quarterly, or monthly to keep the agreement active.
4. State Who Owns the Contracted Vehicle
This section tells who retains ownership of the contracted vehicle during the agreement span; will the car owner retain ownership of the car, or would the SAP service provider be the new owner for the contract period.
5. State All Applicable Indemnity and Liability
Will the SAP contract serve as an add-on to any auto insurance plan? What are the indemnities that apply? Also, what are the service provider’s liabilities and “backup” to satisfy the curiosity of the client (car owner)?
This section is very important, and every detail mentioned here should be clearly explained and understood by both parties.
6. Contract Sealing
With every detail in the previous sections well understood by both parties, this is the final part of the agreement, which the SP and client have to sign to seal the contract. Once completely signed, the contract terms become effective immediately.
Frequently Asked Questions
Is Service Agreement Program the Same as Auto Insurance?
They have quite many similarities, but they are not the same. An SAP agreement may be included as part of some insurance plans to offer extended coverage for more – other types of – damages that may happen to your vehicle. But on its own, a service agreement program is not a type of auto insurance.
Is Service Agreement Program the Same as an Extended Warranty?
A Service Agreement Program is a standalone automobile coverage contract aimed at saving you some bucks in auto repairs. It is not a type of warranty or insurance coverage; however, it may be included as part of your extended warranty plan, depending on your service provider.
How Much Does Service Agreement Program Cost?
There is no static price; different service providers offer different pricing plans and coverage options. However, expect to pay around $500 – $1,000 annually for a service agreement program contract. If more services are included, you’d be paying more.