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Extended Auto Warranty vs. Vehicle Service Contracts

A common comparison made in the automotive industry is an extended vehicle warranty vs. vehicle service contracts. They are similar but the difference is which company you can the contract with. Both an Extended Vehicle/Auto Warranty and Vehicle Service Contract protect you from repair costs if your automobile experiences a mechanical breakdown. Without either of these types of coverage, your auto/vehicle is vulnerable to a costly repair. Considering buying an extended vehicle warranty? With a vehicle service contract someone else would cover the bill allowing you to easily return to the road. With either an extended auto warranty or a vehicle service contract you will no longer be forced to payout money for a costly covered repair (other than applicable deductibles and contract limitations).

Vehicle service contracts are designed to protect consumers against unexpected, costly covered repairs. An individual’s coverage for any given repair is based on the terms and conditions of his/her vehicle service agreement. An extended vehicle warranty provides comparable coverage, but in a different form. To clear this up, below is a breakdown of some of the major differences between an extended vehicle warranty vs. vehicle service contracts:

Extended Vehicle Warranty:

A manufacturer’s warranty is a stated warranty to repair your vehicle for a specified period of time and/or mileage.
A extended warranty is not all inclusive and covers only specific components based on milage or year (whichever comes first).
An extended auto warranty is not included in the price of a new vehicle.

Vehicle Service Contract:

Vehicle service contracts can have a varied degree of coverage from basic parts to all-inclusive.
Vehicle service contracts are not included in the price, but are an additional cost.
Vehicle service contracts can be placed upon a vehicle for much longer time after expiration of original warranty and multiple times throughout the vehicle’s time of operation
Vehicle service contracts can be provided directly to consumers from third-party providers, saving the customer money by eliminating the middle man.

Both an extended manufacturer’s warranty and a vehicle service contract will cover major parts, labor, and taxes in the event of mechanical breakdown. And did you know that the majority of dealerships that offer an “extended auto warranty” actually come from a third-party provider? Some are the same that our premier partners provide to customers to protect their automobiles, just offering a different form of coverage.

When it all comes down to a comparison of an extended auto warranty vs. vehicle service contracts, they essentially do the same thing, but with different restrictions, policy periods, coverages and costs. Both protect your vehicle in the event of a mechanical breakdown. But where the warranty will eventually run out, the vehicle service contract or its renewal will be there to ensure your vehicle never goes a moment without protected coverage.

Why Can’t I Get A Warranty On My Used Car?

We hear questions all the time about auto warranties and how they work. An auto warranty can only be issued by the manufacturer of the said vehicle. If you have a car with an expired auto warranty or purchased a car outside of its auto warranty coverage (e.g. miles or years; whichever comes sooner) you still have options.

What are your options?

You can get a Vehicle Service Contract. Don’t worry a Vehicle Service Contract is almost always misconstrued as an ‘Extended Auto Warranty’. But remember a Warranty can only be provided by the manufacturer. A Vehicle Service Contract will still provide mechanical coverage on your vehicle repair costs. You will need to speak with a specialist to understand what Vehicle Service Contracts fit your needs.

What is a Aftermarket Auto Warranty?

An aftermarket auto warranty is really the fancy term for a Vehicle Service Contract. The Vehicle Service Contract is protection you put on your vehicle after your manufacturer’s auto warranty expires.

An aftermarket auto warranty is also known as an extended auto warranty, however, both of these terms are technically incorrect. The correct term for an aftermarket auto warranty is a vehicle service contract. Vehicle service contracts work similarly to the manufacturer’s warranty, covering parts, labor, and taxes for repairs.

What is Mechanical Breakdown Insurance?

Most people who have cars have auto insurance which covers them from accidents and collisions. Similarly how do you stay protected from costly auto repairs when your manufacturer warranty expires?
Let’s back it up a little. A mechanical breakdown insurance is offered through a vehicle service contract. A vehicle service contract is to pay for repairs in the event of mechanical breakdown. So the real question should be: Why does the automotive industry use so many fancy terms?

Well since they cannot use the term ‘Auto Warranty’ due to the fact that they are not the manufacturer, they tend to blur the lines.