Advisor

Content on Jalopnik Advisor is commercial in nature and independent of Jalopnik Editorial and Advertising. Jalopnik Advisor content is free to consumers and always will be, however we and our partners may be compensated if you purchase a product or service through the links on this website.

Saleswoman Explaining Contract Paper To Happy Couple Buying A New Car

Vehicle Service Contracts

You can purchase a vehicle service contract (VSC) to cover repairs after your car’s factory warranty expires. But what does a VSC cover, and is it worth it?

Invalid Zip Code

For our #1 rated provider,  

888-570-8415

04/20/2024 12:00 AM

View Pricing from our #1 Provider – Endurance

×

The Gist: 

  • You can get a vehicle service contract for as low as $58 per month for 48 months through Endurance, a top extended warranty provider.
  • Most companies will allow you to cancel your contract and receive a prorated refund. 
  • The two main types of VSCs are exclusionary and stated component, which refers to the breadth of coverage offered.
Endurance
4.5
Reputation: 4.5/5.0
Coverage: 5.0/5.0
Price: 4.5/5.0
Customer Experience: 4.5/5.0
idée Endurance is our first choice for extended warranties
  • Best Plan Offerings
  • Mileage Covered: 200,000 miles on the odometer
  • Free Cancellation: Full refund within 30 days
  • Plan Options: 6 different plans to choose from
  • Longest Plan Term: Up to 8 years
  • Discounts: $300 same-day signup discount, $250 shopping voucher, and others
Plan coverage includes Endurance Elite perks™
Exclusionary plan One-year membership for free
Powertrain plan Tire repair and replacement
Maintenance coverage with Endurance Advantage Key fob replacement
Roadside assistance Total loss protection
Towing Collision discount
Rental car $250 rewards voucher
Trip interruption coverage Endurance Protect app

If your car’s factory warranty is about to expire, you might be thinking about getting a vehicle service contract (VSC) to cover costly repairs. But is a service contract worth the price for a used vehicle if it’s 10 years or older?

In this article, we’ll explain everything you need to know about vehicle service contracts–from coverage to pricing and how to buy one. We’ve also reviewed some of the best extended car warranty companies, and we’ll recommend three top providers.

What Is A Vehicle Service Contract?

A vehicle service contract is an optional plan from a third-party company that covers specific car repairs and breakdowns after your factory warranty expires. These plans are also called extended warranties, though the manufacturer is the only company that can officially extend your new-car warranty. VSCs always cost extra and some come with other benefits like roadside assistance.


Are Vehicle Service Contracts Worth It?

A vehicle service contract can be worth it if you clearly understand what’s covered and get a good price. Some vehicle makes and models are more prone to breakdowns with age, so it’s a good idea to check out reliability rankings for your car from resources like RepairPal or Edmunds.com.

Compare the estimated repair costs for your car over the next few years with the cost of an extended warranty to see if it’s worth it.


What Does A Vehicle Service Contract Cover?

There are two main types of VSCs: exclusionary and stated component. Bumper-to-bumper warranties are exclusionary contracts, which provides comprehensive coverage for any mechanical failure unless the system or part is explicitly excluded in the contract.

Anything less comprehensive than a bumper-to-bumper coverage is a stated-component contract. A powertrain warranty, for example, covers a list of components in the engine, transmission, and drivetrain. With a stated-component plan, coverage is limited to specific items listed in your contract. There are also stated component plans that cover more than the powertrain and may include steering, brakes, and more.

As an example, below are the details of the five plans under the Carchex Care by Royal contract. Here’s what each warranty covers:

Covered Part/SystemBronze PlanSilver PlanGold PlanPlatinum PlanTitanium Plan
Engine
Transmission
Front and rear axle
Transfer case
Electrical
Air conditioning
Steering
Brakes
Suspension
High-tech
Cooling system
Fuel system
Factory navigation
Exclusionary coverage

What Is Excluded From A Vehicle Service Contract?

No vehicle service contract covers everything that could break or wear out on your car. A service contract requires a company to cover exactly what’s written inside–nothing more. Below are some example components and situations that are usually excluded from coverage:

  • Cosmetic items like paint, upholstery, and trim
  • Wear-and-tear items like tires and wiper blades
  • Routine maintenance services
  • Parts that haven’t failed beyond manufacturer tolerances
  • Upgraded or aftermarket parts
  • Environmental damage
  • Damage from misuse or lack of maintenance
  • Pre-existing conditions
  • Select emissions components
  • Teardown and diagnostic costs

Other Conditions Of VSCs

There are other conditions you need to meet to keep your VSC valid. Usually, you’ll need to:

  • Keep all maintenance records.
  • Follow all maintenance recommendations from the manufacturer.
  • Use only mechanics certified by the National Institute for Automotive Service Excellence (ASE®).
  • Get authorization from the vehicle service contract company before having repairs done (except in emergency situations).

Extra Perks

Vehicle service contracts often come with extra perks. These make the experience of a breakdown a bit less stressful and add value to the contract. Some examples of perks include:

  • Roadside assistance: Provides help with tire changes, lockout assistance, and more
  • Rental car coverage: Reimburses you for a rental car while your car is in the shop because of a mechanical breakdown
  • Trip-interruption benefit: Reimburses you for food and lodging costs if your car breaks down, usually 100 or more miles away from home

With trip-interruption benefits and rental car reimbursement, there are always limits to the amount of money you’re given per day and the number of days the service will apply.


How An Auto Service Contract Works

Each vehicle service contract will outline a claims process, which is required for covered repairs. Below are typical steps: 

  1. Take your car to a licensed mechanic or dealership. 
  2. Give the technician your service contract information.
  3. The technician contacts your plan administrator.
  4. You may need to authorize a teardown diagnosis, which the warranty likely won’t cover.
  5. The repair shop tells your plan administrator about the required services, and the administrator then approves or denies the claim.
  6. The repair shop completes the repair if the claim is approved.
  7. Pay your deductible to the repair facility, and the administrator pays the rest to the shop.

Some companies–like Carchex–sell service contracts that are administered by other companies, like American Auto Shield. Others, like Endurance, are direct warranty providers and administer contracts.

How Long Does Coverage Last?

Vehicle service contracts almost always have a specified end date. This is usually dictated by the mileage on your odometer or a set number of years from the beginning of coverage. All contracts include limits for both, and whichever limit you hit first will end the service. In some cases, mileage is counted from the beginning of the contract.

For example, a quote we received for a Titanium plan from Carchex would last 7 years/125,000 miles. The car already had 30,000 miles, so the contract would expire at 155,000 miles or seven years from the contract start date.

You may have several term lengths to choose from with each protection plan. Some companies, like CarShield, offer unlimited month-to-month contracts. However, it may not be cost-effective to make a monthly payment for six or seven years. Compare the total cost of unlimited monthly plans to term-limited vehicle service contracts to see which makes more sense to you.

Can You Cancel A Vehicle Service Contract?

Reputable VSC companies will allow you to cancel a contract at any time. Cancellation policies differ by provider, but you usually have to provide a written odometer statement showing the current mileage of your car. You may also have to get this statement notarized.

You can also typically get a full refund within 30 days if you haven’t used the coverage. After that point, you’ll typically get a prorated refund based on the time and coverage used. If you’re selling your car, most companies allow you to transfer coverage to the next owner for a fee. This can increase the value of your car since buyers may appreciate the extra coverage.

Where To Get A Vehicle Service Contract

You can get vehicle service contracts from third-party providers like Carchex or Endurance. You can also find plans from dealerships, and some manufacturers offer VSCs separately from their extended warranty coverage. Some insurance companies also offer repair coverage similar to a VSC. Geico’s mechanical breakdown insurance is one example.


Vehicle Service Contract Cost

According to quotes we received, total vehicle service contract costs range from about $1,500 to $3,500 or more depending on the provider and plan. In general, plans that cover more systems or have longer terms for mileage and years will cost more. Still, you may save some money if you buy a plan earlier in the life of your vehicle.

Vehicle Service Contract Quotes

Below are a few sample quotes for different types of plans from a variety of providers. To obtain estimates, we priced extended warranty coverage for a 2022 Honda Civic with 50,000 miles and a 2016 Subaru Outback with 110,000 miles. All plans include a $100-$250 deductible. Costs are rounded to the nearest dollar.

ProviderVehiclePlanMonthly
Cost
Total
Cost
EnduranceHonda CivicSupreme 2.5 years/40,000 miles$96.84 for 30 months$2,934.00
EnduranceSubaru OutbackMid-level Powertrain Plus 2.5 years/40,000 miles$107.39 for 30 months$3,251.00
CarchexHonda CivicUnlimited
month-to-month
$150.00Varies
depending
on length
CarchexSubaru OutbackUnlimited
month-to-month
$150.00Varies
depending
on length
CarShieldHonda CivicUnlimited
month-to-month
$150.00Varies
depending
on length
CarShieldSubaru OutbackUnlimited
month-to-month
$150.00Varies
depending
on length

Deductible Options

With a vehicle service contract, you usually have to pay a deductible out of pocket for each visit to the repair shop. This is often $100, though some providers may offer $0 or $200 deductibles. If you have a choice, a lower deductible slightly increases the overall cost of the plan and vice versa.

Shop Smart To Avoid Scams

Not all extended warranty companies are genuine or offer good service. Before you make a purchase, thoroughly read through the fine print of a sample contract. Also, investigate the company to see how customers rate it on the Better Business Bureau (BBB) and Trustpilot websites. Always ask about exclusions, because a VSC won’t cover every breakdown or repair.


Vehicle Service Contracts: Our Take

After shopping around, you can often find affordable coverage under a vehicle service contract to help foot the bill for car repairs after your manufacturer’s original factory warranty expires. The cost of extended warranty plans will vary based on your type of vehicle, where you live, the level of coverage you pick, and other factors. 

Always carefully review the terms of your plan. A vehicle service contract is worth it for the right price, but you need to know what you are signing up for.

Top Recommendations For Vehicle Service Contracts

We’ve compared the best extended warranty companies on the market to help drivers shop from reputable service contract providers. Our top picks are Endurance and Carchex.

Endurance: Best Plan Offerings

Endurance is our top pick overall because it offers the best coverage selection and has a great customer service reputation. The company offers six coverage plans, including one with maintenance benefits for oil changes, tire rotations, and annual services. It also includes one-time benefits for cooling-system maintenance and brake pad and battery replacements.

Endurance has a 3.7-star rating out of 5.0 from over 8,700 customer reviews on Trustpilot. From our research team, the company received a score of 4.5 out of 5.0 stars.

Keep reading: Endurance warranty review

Carchex: High Mileage Limits

Founded in 1999, Carchex has a strong reputation today with an A+ rating and accreditation from the BBB. Carchex can cover vehicles up to 250,000 miles, which makes it a great option for used cars. Drivers can pick from five plans ranging from basic powertrain coverage to protection on par with a factory bumper-to-bumper plan.

Carchex covers cars in all 50 states and the company earned a score of 4.4 out of 5.0 stars in our review.

Keep reading: Carchex review


Vehicle Service Contract: FAQ

What are the benefits of a vehicle service contract?

Compared to manufacturers’ extended warranties, vehicle service contracts (VSCs) have these key benefits:

  • Choice of where to have your car repaired
  • Lower out-of-pocket repair costs
  • Longer terms for miles and years 
  • More variety in coverage options
  • Potential perks like 24/7 roadside assistance, trip interruption, and rental car reimbursement

What are the two types of vehicle service contracts?

The two main types of service contracts are powertrain and bumper-to-bumper, though there are many levels of coverage between those. A powertrain contract covers the engine, transmission, and drive axle, while a bumper-to-bumper contract covers all mechanical breakdowns except for a list of exclusions.

Is it good to buy a service contract?

A service contract can be worth it and provide peace of mind if you get a fair price and know what qualifies as a covered repair. Service contracts are more valuable after your car’s manufacturer’s warranty expires or if your car is older, as more repairs will likely be needed as it ages.

What is a VSC contract?

A VSC is a vehicle service contract, which is an agreement by a third party (not your auto manufacturer) to pay for certain repairs and mechanical breakdowns. VSCs may come with perks like roadside assistance and rental car coverage.

Why should I buy a vehicle service contract?

A VSC helps pay for car repairs after your vehicle’s original factory warranty ends. If you plan on keeping your vehicle for many years or want to avoid surprise repair bills, a vehicle service contract adds protection. 

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.
  • 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.

*Data accurate at time of publication