A service contract is a paid promise to handle certain repairs on a system for a set period. A warranty is a promise from the maker or seller, and it often comes with the equipment. The two papers can be separate, and each has its own terms. The terms for ending and moving the contract matter as much as the list of covered parts.
Find the cancellation terms first
Look for who can cancel, how the request is made, and what form it must take. Find out whether the contract ends on the day you ask or on a later day, and whether any part of what you paid comes back. Ask how any return is worked out, from the time left on the contract or another method, and whether a fee is taken out first. Ask for the exact wording, not a summary.
Find the transfer terms
If you sell the house, the contract may go with it, or it may end. Ask whether the next owner can take it over, what they must do to take it over, whether a transfer fee applies, and who pays it. If the contract ends at sale, ask how any remaining term is handled.
Questions to ask before you sign
- How do I cancel, in what form, and when does the cancellation take effect?
- What part of the payment comes back, and how is that worked out?
- Can the contract move to the next owner of the house, and what has to happen first?
- Is there a transfer fee, and who pays it?
- When does the protection begin, and is there a waiting period before it applies?
- Is the warranty separate from this contract, and which one covers which parts?
- Where is the full wording, and can I have a copy before I sign?
Compare on the terms, not the pitch
When two offers look alike, lay their cancellation and transfer terms side by side. Judge the paper, not the sales talk. Published figures on this site are separate from any contract, so use them to compare a system's age against your plan, not to judge an offer. The appliance ranking shows typical service life for the major appliances.