Vehicle Protection Plans
A vehicle protection plan pays for repairs to covered parts as outlined in your service contract, and many plans come with perks like roadside assistance.
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The Gist:
- A vehicle protection plan pays for repairs to covered components, like your vehicle’s engine, transmission, and drive axle components.
- There are different coverage levels available, from bumper-to-bumper to powertrain protection.
- You can buy vehicle protection plans from your manufacturer or a third-party provider.
- Each plan comes with its share of exclusions for routine maintenance, wear-and-tear parts and tampering.
Accounting for the costs of car repairs is one of the expenses associated with owning a vehicle. If you bought a new car, you’ll have your manufacturer’s warranty to cover you for the first few years. However, once that expires, or if you bought a pre-owned vehicle and don’t want to pay for repairs out of pocket, a vehicle protection plan can help reduce these expenses.
In this article, we detail what vehicle protection plans cover, the types available, and the differences between manufacturer and third-party ones. We also recommend some of the best extended car warranty companies for coverage based on our research.
An extended car warranty refers to mechanical breakdown coverage offered by a vehicle manufacturer. However, this term is often mistakenly used to describe coverage from third-party companies. Independent providers offer similar protection through vehicle service contracts, but we’ve used the terms interchangeably in this article for convenience.
What Is A Vehicle Protection Plan?
A vehicle protection plan pays for the repairs to covered components when a mechanical breakdown occurs. Often, you’ll buy one after your factory warranty expires, or at the time you buy a used vehicle. You can buy these plans from your manufacturer or a third-party. In each case, they offer different types of coverage.
Vehicle protection plans are often referred to as extended auto warranties or vehicle service contracts.
Types Of Vehicle Protection Plans
When shopping for vehicle protection plans, you’ll have your choice between several different coverage levels, but the most common you’ll see are bumper-to-bumper and powertrain options.
A bumper-to-bumper plan is most similar to your factory warranty on a new vehicle and typically covers almost every part. A powertrain protection plan usually covers only the most vital parts of your car, like the engine and drivetrain.
What’s Not Included?
Each provider gives you a list of the repairs covered under your car warranty. However, in all instances, there are certain things warranty providers won’t pay to fix. Some of the most common include:
- Routine maintenance: This means oil changes, tire rotations, and brake pad replacements.
- Wear-and-tear parts: Your vehicle’s light bulbs, air filters, brake pads, rotors, wiper blades, battery, and upholstery wear out with use.
- Modified parts: If you choose a manufacturer extended warranty, you have to go to your dealership for repairs, as taking it to an unauthorized mechanic can void the warranty.
- Damage from acts of nature: When floods, fire, hail, fallen trees or other environmental acts cause damage to your car, your auto insurer’s comprehensive insurance pays for these.
- Road hazards: Unless you have a wheel protection package with your provider for tire or wheel damage, you’ll want to use your collision insurance to pay for damage done to your tires from road hazards.
- Tampering: Should a mechanic notice signs of tampering, they could deny the claim.
- Body damage: Unless you have a specific protection in place, many providers won’t pay for repairs for dent, dings, and paint scratches.
- Neglect: If you haven’t been doing the routine maintenance outlined in your vehicle’s owner’s manual, it could void the warranty when a breakdown happens.
- Misuse: You won’t get any damages covered if they came from reckless driving acts off-roading or street racing.
Manufacturer Warranties Vs. Vehicle Protection Plans
When you shop for plans with your vehicle manufacturer and extended warranty providers, you’ll want to pay close attention to the coverage terms. This is how long your warranty plan lasts, and providers express these coverage limits in years and mileage.
Having this information can make it easier to see which options work best for you. Below is a look at the coverage limits of several warranty providers and manufacturers:
*Formerly Fiat Chrysler Automobiles (FCA). FCA merged with the PSA Group in 2021 and was rebranded as Stellantis.
What you’ll find is that extended auto warranty companies usually offer much more generous coverage limits, making them the perfect fit if you plan to keep your vehicle for the long-haul. Meanwhile, manufacturer vehicle service contracts work best if you plan to keep your vehicle after its factory warranty expires, but you plan to trade it in or sell it in the future.
Benefits Of A Vehicle Protection Plan
There are many benefits you’ll receive with vehicle protection plans, such as:
- Cost of repairs become part of your budget: With a monthly payment and a deductible for covered repair costs, you’re saving on repairs over the life of vehicle ownership.
- Options for repair shops: You can take your vehicle to the repair facility of your choosing, provided the mechanic meets the carrier’s qualifications
- Roadside assistance is often included: This usually includes towing to the nearest facility, jumpstarting dead batteries, delivering fuel and fluids, and more.
- Other perks: This could be trip interruption coverage, gap insurance, and rental car reimbursement.
- Longer terms: Vehicle protection plans typically cover your car for much longer than your manufacturer’s warranty.
- Your choice of coverage: Many third-party providers have multiple coverage tiers.
- Flexible payment options: Most providers allow you to make monthly payments with no interest charges.
Do You Need A Vehicle Protection Plan?
If you plan on keeping your vehicle at least a few years after its factory warranty expires and you don’t want to pay for car repairs, it makes sense to have a vehicle protection plan. Many manufacturers and providers allow you to tailor coverage terms that align with how long you plan to keep your vehicle. With low down payments and affordable monthly payments, it can give you the peace of mind and protection you want when owning a vehicle.
How A Vehicle Protection Plan Works
After getting free quotes with several car warranty companies, and researching their reputations through customer reviews and the Better Business Bureau (BBB), you’ll choose one for coverage.
Depending on the provider, you might have a waiting period around 30 days. This is the time you won’t be able to file claims. Once that waiting period expires, if you experience a mechanical breakdown, you’ll want to follow your carrier’s instructions for claims.
For manufacturer warranties, this involves taking the vehicle to your brand’s dealer. For example, if you have a Ford, you’ll take it to a Ford dealer for service, as your warranty won’t cover vehicle repairs with other mechanics. Third-party warranty providers give you more flexibility in where you take your vehicle. Though, some companies might require the repair shop to have mechanics certified by the National Institute for Automotive Service Excellence®.
Next, the manufacturer or warranty provider reviews the claim. If it’s approved, you’ll pay the deductible and the rest is handled for you. Should the repairs be extensive and require days to complete, many plans come with rental car coverage. You’ll have a daily and maximum spending cap. Once the mechanic finishes repairs, you’ll visit the service center and drive away with your vehicle.
Vehicle Protection Plan Costs
There are many factors that impact the costs of extended auto warranties. In general, plan to spend around $2,000 to $4,000 for a warranty plan. That might sound steep on the surface, but one major repair can make up these costs quickly.
Here are some of the factors that influence costs:
- Vehicle’s make, model, and year
- Vehicle mileage
- Coverage level
- Deductible amount
- Provider you choose
- Coverage terms
Vehicle Protection Plans: Our Take
A vehicle protection plan pays for covered repairs when mechanical breakdowns happen. They can save you significantly in repair costs, while providing some perks like roadside assistance, rental car coverage, and trip interruption protection.
If you plan to keep your vehicle for a few years after its factory warranty expires, a manufacturer extended warranty works best because it offers low deductibles and you’ll have factory-trained technicians working on your vehicle. Meanwhile, if you want to keep your vehicle for many years, you’ll want to consider third-party warranty providers, as they offer much more flexible coverage terms.
Top Recommendations For Extended Warranties
As you shop for the best extended car warranty, these are two of the best providers to consider.
Endurance: Best Plan Offerings
Endurance has coverage terms extending up to 200,000 miles. It also offers six plans with rental car reimbursement, roadside assistance, and trip interruption coverage coming with each one. Depending on the plan you select, you can expect to pay between $98 to $120 monthly.
Read our Endurance warranty review for more information.
CarShield: Month-To-Month Contracts
CarShield offers a wide variety of coverage for motorists, all-terrain vehicles (ATVs), and motorcycles. You’ll have your choice of five plans, with monthly payments being around $110 to $140 per month. With any CarShield plan, you’ll receive rental car reimbursement, roadside assistance, and trip interruption coverage.
Read our CarShield review for more information, or check out our comparison of Endurance to CarShield.
Vehicle Protection Plans: FAQ
Below are frequently asked questions about vehicle protection plans:
Is the vehicle protection package worth it?
Yes, the vehicle protection package can be worth it if you plan to keep your vehicle long past when its factory warranty expires and you don’t want to pay out of pocket for repair bills.
Is a vehicle protection plan the same as a warranty?
Vehicle protection plans and warranties work similarly in that they cover repairs that arise from mechanical breakdowns. That said, many vehicle protection plans come with more perks than your factory warranty, like rental car coverage and trip interruption protection. A vehicle protection plan’s purpose is usually to be a new layer of mechanical coverage after the original warranty expires.
What is a vehicle protection plan?
A vehicle protection plan is a service contract where your provider pledges to pay the repair costs associated with covered components due to mechanical breakdowns. That said, every plan does come with exclusions, so pay attention to the fine print when you sign up for one.
How We Rate Warranty Providers
Our review process aims to deliver consistent and unbiased assessments of extended auto warranty providers. While there are multiple qualities that make a warranty company successful, our review team focuses on those we believe are the most important for consumers:
- Reputation: It’s important that an extended car warranty company is able to meet its claims obligations. Companies with a strong rating from the Better Business Bureau (BBB) and a long history of reliable service score well in this category. We also evaluate the availability and transparency of each company’s contracts, as well as whether each provider offers a money-back guarantee.
- Coverage: Our team of experts looks at the number of extended warranty plans available, as well as term limits, exclusions, and added benefits like roadside assistance. Ratings also take into account the availability of maintenance coverage.
- Cost: Cost can be difficult to compare between providers because so many factors impact vehicle service contract pricing. To determine our cost score, we perform a secret shopper analysis for a variety of vehicles and plans and consider available deductibles.
- Transparency: Our team evaluates the availability and transparency of each company’s contracts, as well as whether each provider offers a money-back guarantee.
- Customer Experience: We listen to real customer sales calls and comb through reviews on sites like the BBB to learn about customer experiences. Warranty companies with a low volume of complaints score well in this area. We also consider the availability of mobile apps and chat features.
