- Apply for a Mortgage
- Contact Us
- Mortgage News
- Library & Statistics
- Rates & Tools
- Mortgage Services
Search the Glossary
Canadian Financial, Real Estate and Mortgage Glossary
How often this word is used
38% - Moderately
38% - Moderately
|Synonyms:||agreement, guarantee, warranty|
Definition of service contract
- service contract
- 1. A type of contract that covers certain vehicle repairs after the manufacturer's or dealer's warranty expires. Extended warranties are sold by vehicle manufacturers, dealers, and independent companies. With a new vehicle, the extended warranty must usually be purchased by the end of the first year of ownership. Also called an extended warranty.
Related Terms and Acronyms:
- closed-end lease The most common type of car lease. The lessee may return the car at the end of the lease term, pay any end-of-lease costs, such as the disposition fee, and the lease agreement is over. In a closed-end lease, the lender assumes the risk of predicting the value of the vehicle (its residual value) at the end of the lease's term. Closed-end lease payments are somewhat higher than open-end lease payments.
- contract An agreement between two or more parties that can be enforced by law.
- extended warranty A service contract that covers certain vehicle repairs or problems after the manufacturer's or dealer's warranty expires. Extended warranties are sold by vehicle manufacturers, dealers, and independent companies. With a new vehicle, the extended warranty must be purchased by the end of the first year of ownership.
- home owners warranty (HOW) A policy that guarantees workmanship on construction of a home and functionality of some appliances, and which pays for repairs for a specified period.
- home warranty A policy that guarantees workmanship on construction of a home and functionality of some appliances, and which pays for repairs for a specified period.
- lease (lse) A written agreement in which the property owner allows a tenant to use property in exchange for rent, and for a specified period. Or, a written agreement in which a car dealer allows a consumer to use a vehicle in exchange for payments for a specified period.
- open-end lease Sometimes called a finance lease. It usually offers lower payments, but carries a risk for the consumer. Under an open-end lease, the lessee must pay any difference between the residual value of the car as stated in the lease and the fair market value of the car, if lower, at the end of the lease. The lessor pays for the appraisal that sets the value. If the consumer doesn't agree with it, the consumer may pay for a binding, independent appraisal by someone agreed to by both parties.
- options Also known as add-ons. These are features added to the car often by the dealer such as a CD stereo, anti-theft system, detailing and undercoating. Some items are purely decorative, known as "mop and glow," and do not add any value to the car.
- warranty A document certifying clear title to a property.
Search the Glossary
Mortgage Payments CalculatorA different down payment amount can make the difference between buying a house and buying your dream house. Our mortgage calculator can show you how a change in your down payment amount can affect how much you pay in interest, either saving you thousands or giving you the room to buy that house you've always wanted.
Best Residential Mortgage RatesWith our low residential mortgage rates, even the best home on your list is easily within your budget. Pay less in interest and increase your principal price range. Apply now!
Mortgage Brokers Work for YouA mortgage broker works for you, and not the bank. Unlike bank employees, brokers are not obligated to give you a mortgage product from any one lender or source, which means that you can count on a broker to find many great mortgage products with lots of options and low rates, all suited with your best interests in mind.