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Ally: Soaring Costs Make Case for Service Contracts

An Ally/Harris survey of U.S. consumers found only 21% had purchased a vehicle service contract, propelling their average five-year maintenance and repair costs to nearly $2,000.

August 26, 2019
Ally: Soaring Costs Make Case for Service Contracts

“We see it all the time. People come in and see their repair costs, and they really don’t know if they can afford it,” said Reginald Garrett, a service consultant at Sellers Buick GMC in Farmington, Mich., in a video announcing the results of an Ally-ordered survey that found only 21% of American car buyers were covered by a vehicle service contract.

1 min to read


DETROIT — On average, Americans spent $1,986 on vehicle repairs and maintenance in the last five years, according to a recent Ally survey conducted online by The Harris Poll among 2,012 U.S. adults.

Respondents aged 18–34 paid an average of $2,334 for vehicle maintenance and repairs in the past five years — a significantly higher financial burden than baby boomers and older adults. In comparison, adults 55 and older spent $1,654, on average, during the same timeframe.

Ally’s survey results come on the heels of research from the Federal Reserve that found that nearly four in 10 adults would not be able to cover unexpected expenses of $400 without selling something or going into debt.

The Ally survey also found that only 21% of Americans have purchased a vehicle service contract or extended warranty in the last five years.

“Many Americans rely on their cars to get to work and losing access to your vehicle can be a major disruption and huge source of stress — particularly if you can’t cover the repair cost,” said Mark Manzo, president of insurance at Ally Financial. “The financial strain can be even more daunting for young people who are early in their careers and may be paying down student loan debt as well.”

Originally posted on F&I and Showroom

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