What is a "service contract"?

What is a "service contract"?

James Bell (Publisher, Auto Reviewer) gives expert video advice on: Does every new car come with a warranty?; What should I look for when comparing a new car warranty? and more...

A service contract is a prepaid maintenance schedule, in that you are basically paying up front for all of the maintenance that the vehicle's going to need over the time you're owning it. Usually it's provided to you in a little booklet of coupons, so when you come to get an oil change, or a checkup after so many miles, you just pay with that prepaid coupon.