A vehicle service contract (VSC) is a paid plan that helps cover auto repairs after your car’s factory warranty expires. Also known as extended car warranties, these protection plans can help owners avoid the stress of expensive repair costs.
In this article, we at the Home Media reviews team explain what a vehicle service contract is, what it typically covers and how much you can expect to pay for this vehicle protection. We’ve evaluated the best extended car warranty companies to help you find the most suitable option for you, and we recommend comparing free quotes before deciding on a vehicle service contract.
Vehicle Service Contracts Overview
While a vehicle service contract may also be called an extended warranty, it doesn’t actually extend the factory warranty coverage from the vehicle’s manufacturer. Instead, a third-party provider typically covers specified repairs.
You have many coverage options when it comes to vehicle service contracts. There are plans that mirror powertrain warranties, covering only the engine, transmission and drive axle. You can also find vehicle service contracts that are similar to the bumper-to-bumper warranties that come with new cars.
Depending on the provider and plan you choose, you may get coverage for any of the following vehicle components:
- Air conditioning
- Electrical system
- Fuel system
- Entertainment system
- Navigation system
Common Exclusions in Vehicle Service Contracts
As with factory warranties, vehicle service contracts don’t cover every part of a vehicle. Read the fine print in the contract before you purchase a vehicle protection plan so you know what is and isn’t covered. Here are some common exclusions:
- Wear-and-tear items such as tires and brake pads
- Damages from a lack of routine maintenance
- Damages caused by modified components
- Damages caused by non-covered parts
- Damages caused by collisions, environmental factors or vandalism
Vehicle service contracts also won’t cover preexisting issues. That’s why most providers have a waiting period before coverage goes into effect.
What’s covered will depend on your choice of plan. If you want maximum protection and peace of mind, it’s best to find an exclusionary plan that covers everything except a short list of components.
Added Benefits of Vehicle Service Contracts
Many vehicle service contracts feature perks at no additional cost. These are the most common added benefits:
- 24-hour roadside assistance: Lockout assistance is often included, as well as battery jump-starts and fuel delivery when you run out of gas.
- Rental car reimbursement: When your car is in the shop for covered repairs, many plans help you with rental car costs.
- Trip interruption protection: If you have a covered breakdown more than a specified distance from home, this benefit helps cover food and lodging expenses.
- Towing services: Many plans pay for towing to the nearest repair facility in the event of a covered breakdown.
How To Use Vehicle Service Contracts
Most vehicle service contracts from independent extended warranty companies allow you to take your car to any licensed mechanic for covered repairs. If your contract is from an automaker, you’ll likely have to take your car to one of its dealerships.
The process for filing a claim will vary depending on the provider you choose. Some require you to pay the repair facility up front and then reimburse you. Others pay the repair shop directly so you only have to pay your deductible out of pocket.
Where To Buy Vehicle Service Contracts
You can purchase a vehicle service contract from a dealership or a third-party provider. There are a few key differences to consider when making this decision.
One good thing about purchasing an automaker’s vehicle protection plan from a dealership is that you’ll always get genuine replacement parts for covered repairs. The downside is that you may be limited to taking your car to dealerships or authorized service centers for covered repairs. This could be a big problem if you have a trusted mechanic you’d prefer to use.
Going the independent route for a vehicle service contract gives you more flexibility in terms of repair facilities and plan options. Several providers, including Endurance and Carchex, offer coverage that lasts up to 200,000 miles or more. While dealerships may only offer coverage when you buy your vehicle or before your factory warranty expires, independent companies let you get coverage at nearly any time.
How Much Does a Vehicle Service Contract Cost?
You can expect to pay between about $99 and $129 per month for a vehicle service contract. Extended warranty costs depend on the plan you choose, the type of vehicle you own and how many miles are on the odometer. Our team received the following protection plan quotes for a 2020 Toyota Corolla with 30,000 miles, each with a $100 deductible:
Is a Vehicle Service Contract Worth It?
The peace of mind that comes with a long-term vehicle service contract can make it well worth the investment. These protection plans are especially good options for drivers who want to keep their cars well past the factory warranty’s expiration date.
To help you decide if an auto service contract is worthwhile, we gathered repair cost estimates from RepairPal. The following estimates are for common repairs on a 2020 Toyota Corolla, the same car covered by the plans in the table above:
Our Recommendations for Vehicle Service Contracts
We’ve researched every major vehicle service contract provider and rated them on a 10-point scale. The following companies are our top picks based on coverage options and affordability:
Endurance: Most Comprehensive Coverage
Overall rating: 9.2
Coverage rating: 9.7
Cost rating: 9.0
Endurance offers six levels of coverage lasting up to eight years and over 200,000 miles. Each Endurance vehicle service contract comes with a free year of Endurance Elite Benefits, which include tire repair or replacement, key fob replacement, total loss protection and a collision discount that provides up to $500 per accident.
Read more: Endurance warranty review
Carchex: Great Industry Reputation
Overall rating: 8.6
Coverage rating: 9.1
Cost rating: 8.6
Carchex auto service contracts can last up to 10 years or 250,000 miles. There are five levels of coverage to choose from, and they all come with flexible payment plans. Carchex works with more than 30,000 repair facilities across the country.
Read more: Carchex review
CarShield: Most Affordable
Overall rating: 8.4
Coverage rating: 9.1
Cost rating: 9.0
CarShield offers six protection plans, including one for motorcycles, ATVs and other specialty vehicles. Unlimited terms and a variety of monthly payment options set CarShield apart from its competitors in the extended auto warranty industry.
Read more: CarShield review
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best extended car warranty companies. We collected data on dozens of auto warranty providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the companies that scored the most points topping the list.
In this article, we selected providers with high overall ratings and cost ratings. The cost ratings were informed by auto warranty rates and available deductibles.
*Data accurate at time of publication.