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Young Ninja Group (ages 3-5)

Public·16 members
Waylon Reed
Waylon Reed

Buy Back Service Contract

The new methodology was supported by the City of New York, which told the commission the new allocated cost of service methodology is designed to result in more uniform, fair, and transparent standby and buyback service rates across the state.

buy back service contract

A buyback agreement is a legal document in which a business owner transfers the ownership of shares back to the company instead of selling them directly to an investor. For example, a buyback agreement can be used when a company wants to repurchase its stock from current shareholders.

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When the car is returned, the dealer must give you a full refund. This includes sales tax, registration fees, deposit and return of your vehicle. If the dealer sold your trade-in, they must refund the fair market value or the value stated in the contract.

Some service contracts offer good protection at a fair price. Others have conditions and exclusions that make them almost worthless. Since the cost of a service contract can be high, you need to find out what it covers before you buy.

Repair agreements are referred to by different names: auto service contract, vehicle service contract, extended service contract, extended warranty, vehicle service agreement, mechanical breakdown insurance, and others. Regardless of what a repair agreement is called, there are only three main types of repair agreement you can buy. Each type has a different kind of obligor. They are:

A VSCP must meet many requirements in order to be granted a VSCP license by the CDI. The most important requirement is that a VSCP's promise to pay for repairs must be guaranteed by a "backup" insurance company. (However, there is an exception to this requirement, which we explain later.) The backup insurance company must be authorized by the CDI to provide the guaranty. If a VSCP goes out of business, or simply decides not to honor a claim, a consumer can have the backup insurance company review the claim. If the claim should be paid, based on the nature of the breakdown and the language of the VSC, then the backup insurance company must pay for the repair if the VSCP does not. The name and address of the backup insurance company must be clearly printed on the VSC.

The only VSCPs that do not need to have backup insurance are VSCPs that have at least $100,000,000 (one hundred million dollars) in "net assets," or are owned by a company that has $100,000,000 in net assets and agrees to guarantee the obligations of the VSCP.Vehicle Service Contract Provider (VSCP) VSCs

Some car dealers sell VSCs in which the dealer, rather than a VSCP, is the obligor. These "dealer-obligor" VSCs are nearly identical to VSCs issued by VSCPs. The main difference is that when you buy a dealer-obligor VSC from a dealer, the obligor is the dealer, rather than a VSCP. As with a VSC issued by a VSCP, a dealer-obligor VSC must show the name and address of a backup insurance company authorized by the CDI. The backup insurance company must honor valid claims for covered repairs if the dealer fails to do so.

When you buy a VSC you may think you are buying an insurance policy. This is because VSCs are very similar to insurance policies. However, VSCs and insurance policies are actually different. An insurance policy is a contract between you and an insurance company. The insurance company is the obligor. If you have a claim, you deal directly with the insurance company (or a claim adjuster hired by the insurance company). A VSC, however, is between you and a VSCP or dealer. VSCPs are not, technically, insurance companies. Many laws apply to MBI policies that do not apply to VSCs. For example, the price of MBI policies is regulated by the CDI; the price of a VSC is not regulated. Consumers may get the most for their money with an MBI policy, especially one purchased directly from the insurance company. The price of MBI policies is regulated by the CDI to make sure the price is not excessive.

If you buy a VSC, it is important that you only buy it from a car dealer, and that the VSC contains the name and address of the CDI-authorized backup insurance company. The CDI has received many complaints from people who bought repair agreements from companies that were operating illegally. Licensed VSCPs, and insurance companies that sell MBI policies, must follow dozens of rules to reduce the chance of bankruptcy, pay valid claims promptly, and otherwise treat people fairly. Unlicensed companies that sell repair agreements by phone, mail or the internet often do not pay valid claims and are committing a felony.

When considering the purchase of a VSC or MBI policy, you need to read the whole agreement to learn which parts are covered. As noted above, the broadest coverage is a so-called "exclusionary" contract, in which all parts and services are covered except the parts and services listed in the "Exclusions" section of the VSC. With contracts that provide coverage that is less broad, a part or service must be specifically listed in the "Covered Parts" section of the contract to be covered.

Regardless of whether a repair agreement is of the "exclusionary" type, or the "specified parts" type, a breakdown to a part will not be covered if a provision in the contract excludes coverage based on the nature of the breakdown (for example, if you contributed to the breakdown by failing to properly maintain the vehicle).

Repair agreements always provide instructions on what to do if you need repairs. Read these instructions carefully as soon as you buy a repair agreement, and read them again when you determine that your car needs a repair. One important instruction is to report needed repairs immediately to the obligor or claim administrator. All repair agreements have a toll-free phone number for this purpose. A claim may be denied if you do not follow the contract's instructions exactly.

As discussed earlier, VSCs are not insurance policies. However, because so many VSC companies went out of business without paying claims in the 1970s through 1990s, California law requires that a backup insurance company authorized by the CDI guarantee almost all VSCs. This guarantee means that if a VSCP or dealer fails to pay any claim, either because the VSCP or dealer is out of business, or because the VSCP or dealer simply does not think the claim is covered by the VSC, then you can seek to have the backup insurance company review the claim. The law requires that the name and address of the backup insurance company be "conspicuously" printed on the contract. (If a VSCP has $100,000,000 in "net worth," it is exempt from the requirement to have backup insurance.) A VSC without the name of a backup insurance company may be illegal and should not be bought without first confirming with the CDI that the VSC is legal.

Companies called "rating organizations" grade insurance companies on their financial strength. Some people prefer to deal only with the strongest insurance companies, for example those with an "A" or "A+" grade or rating. These people might not buy a VSC if the backup insurance company does not have at least an "A" rating. You can check the Web- sites of insurance company rating organizations, such as A.M. Best, to see what the rating is of a backup insurance company named on a VSC you are thinking of buying.

If a VSC includes the name of a backup insurance company, the backup insurance company must evaluate your claim if the obligor doesn't (because it is out of business or for some other reason). The backup insurance company must pay your claim if it is covered and not excluded.

If a VSCP or dealer is not honoring the cancellation and refund sections of the contract, then contact the insurance company listed on the VSC. If the insurance company does not resolve the problem, then contact the CDI.

In addition, it is important to remember that you always have the right to shop and compare when making any purchase, especially when buying an item as costly as a new or used vehicle. You will find the process much easier if you understand that you can shop and compare not only for your local auto dealers, but also your financing and warranty services as well.

If you purchase a service contract on a used vehicle from the same dealer within 90 days of purchase, the implied warranty of merchantability cannot be waived, and you will have the protection of both the service contract and the implied warranty of merchantability (RCW 48.96.045(4)). The availability of the implied warranty or a service contract does not eliminate the need for a thorough test drive and an inspection by a qualified mechanic.

You may be encouraged by the dealer to buy an extended service contract for the vehicle. If you purchase an extended service contract, the dealer is not allowed to disclaim the Implied Warranty of Merchantability; that is, the vehicle cannot be sold "as is" (see the notice requirements in RCW 48.110.075 (2)(e)(iv).

Before you visit a dealership, you should find out what service contracts are generally available in your area and compare the extent of coverage, the maintenance requirements to keep the policy in force and the cost. You may request copies of various contracts offered by the dealership before you buy. You may cancel any extended service contract at any time and receive a refund. If you cancel within 10 days, you should receive a full refund. A full refund minus a cancellation fee must be provided to you if you cancel more than 10 days but less than 30 days of purchase and have made no claims under the contract. After 30 days from purchase, a pro-rated refund should be calculated on either time or mileage minus a cancellation fee. 041b061a72


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