What Are Vehicle Service Contracts?

Learn How a Vehicle Service Contract Can Protect Your Car

The purpose of vehicle service contracts is to pick up where manufacturer warranties leave off.

A warranty from a manufacturer is essentially a promise that your car is in working order and if it has any mechanical failure or problem (not related to damage) that the manufacturer will cover the repair costs. But manufacturers will only make such a promise for a certain period of time.

When your manufacturer warranty ends, you are on the hook for any issues with your car that require repairs. However, you can purchase a vehicle service contract to protect yourself from any unforeseen tune up needs in the future, which tend to appear after your car’s manufacturer stops guaranteeing its good condition. Generally, you may purchase a vehicle service contract with a car loan (i.e. bundled into the financing) or as a standalone product.

The Benefits of a Vehicle Service Contract

A good vehicle service contract will cover almost any problem with your car that is not related to damage. Such problems can include electrical system failures, seal and gasket issues, and others.

Vehicle service contracts vary in their level of coverage so make sure to review any plan you are considering before buying. Service contracts may offer roadside assistance, towing services, locksmith services, rental services, and a tire coverage benefit. Additionally, some service contracts give you the option to choose your repair shop.

When You Can Buy a Vehicle Service Contract

You can purchase a vehicle service contract at any point that you own your vehicle. Typically, people choose to purchase a vehicle when they buy their or refinance their car. If your factory warranty is still in full effect, specialized vehicle service contracts may offer you additional protection.

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