What is a Manufacturer’s Vehicle Warranty?
A manufacturer’s vehicle warranty is the exclusionary or what is known as the Bumper-to-Bumper warranty that comes with all their new vehicles at time of sale. The manufacturer’s warranty starts the day the vehicle is first put into service by the original owner. The manufacturer’s warranty ends from a specific time and mileage from the day the vehicle is first put into service by the original owner. The specific time and mileage differs by manufacturer and model. The most common term is a 36 month and 36,000 miles, whichever comes first. Once a specific time and/or mileage is reached from the day the vehicle is first put into service by the original owner the manufacturer’s warranty ends.
What is a Manufacturer’s Extended Powertrain Vehicle Warranty?
Many manufacturers provide an extended powertrain warranty that lasts longer that their exclusionary or what is known as the Bumper-to-Bumper warranty that comes with all their new vehicles at time of sale. The manufacturer’s extended powertrain warranty also starts the day the vehicle is first put into service by the original owner. The manufacturer’s extended powertrain warranty also ends from a specific time and mileage from the day the vehicle is first put into service by the original owner. The specific time and mileage differs by manufacturer and model. The most common term is a 60 month and 60,000 miles, whichever comes first. Once a specific time and/or mileage is reached from the day the vehicle is first put into service by the original owner the manufacturer’s extended powertrain warranty ends.
Long powertrain warranties are outstanding, but they protect just what they say they protect: your vehicle’s powertrain. If you do not have a Vehicle Service Contract you will be responsible for 100% of the cost of repairs for items not related to your vehicle’s drivetrain.
What is a Vehicle Service Contract?
Vehicle Service Contracts are insurance backed products that are designed to protect consumers against unexpected, costly repairs to their vehicle. Once the manufacturer’s warranty expires you are responsible for the cost of repairs from that point forward. A Vehicle Service Contract covers the costs associated with repairs, including parts and labor that may be required after the manufacturer’s warranty expires. Different Vehicle Service Contracts have different coverage levels. A given individual’s coverage for any given repair is based on the terms and conditions of their Vehicle Service Contract.
How does a Vehicle Service Contract work?
With a Vehicle Service Contract, the contract holder is covered when their vehicle experiences a mechanical breakdown or failure that is addressed by the Vehicle Service Contract. The process varies throughout the industry, but, typically, you simply have the repair facility of your choice, employing an ASE certified technician, contact the provider’s claims center to report the claim prior to repairs. The claims representative then works with the service center to ensure that they receive their payment and that your vehicle is repaired. If you are unsure of where to take your vehicle for repair, you can typically contact the administrator of your service contract for guidance.
The terms of the agreement make clear that certain costs are covered and certain costs may not be covered. In some cases, the contract holder may need to pay a deductible. The vehicle components that are specified for coverage in your agreement should be covered outright, provided regular maintenance has been properly and regularly performed as defined by the terms and conditions of your Vehicle Service Contract.
Do Vehicle Service Contracts Provide Double Coverage?
It is true that a Vehicle Service Contract may provide double coverage on certain repairs while your vehicle is still covered under the original manufacturer’s warranty. But a Vehicle Service Contract can fill in the gaps in your manufacturer’s warranty with additional features benefits. More importantly when your manufacturer warranty expires, your Vehicle Service Contract keeps your coverage in place, protecting you for repairs down the road.
Why do I need a Vehicle Service Contract?
A Vehicle Service Contract can offer peace of mind and several other benefits to vehicle owners. Knowing that many of your repair costs will be covered can ease any tension about owning a vehicle. Similarly, unexpected repair costs are minimized because of coverage – making it more affordable to own and maintain a vehicle.
Your vehicle is a big investment and the longer it stays in great working condition, the more value you get from your investment. Vehicle Service Contracts are designed to protect your investment by keeping your vehicle in good, drivable shape without you having to incur a lot of extra, unexpected repair costs that you might otherwise have difficulty paying.
Considering that the average hourly rate for mechanic labor is over $100 an hour, labor alone can be a smart reason to have an Vehicle Service Contract. When you also consider how expensive parts and systems can be to fix, the value proposition for Vehicle Service Contracts becomes that much stronger.
Why should I buy a Vehicle Service Contract now if I still have a manufacturer’s warranty?
Just like health insurance or life insurance, the better shape your vehicle is in when you obtain coverage, the better your rates and pricing will be. It actually costs far less to purchase a Vehicle Service Contract on a newer vehicle in tip-top shape than it does for an older vehicle that’s fallen into disrepair. By buying when your car is newer and in better condition, you lock in the costs of a vehicle service plan now, while your vehicle is at its best.
What should I look for when considering purchasing a Vehicle Service Contract?
Understand what you want, what you’re willing to pay and find a contract that will fit that bill. If you want a lot of coverage, then that’s what you should ask for. Want less coverage? There’s a contract out there that’s right for you.
Beyond that, look at the company providing the contract, research them, and make sure you fully understand the details of your contract. The details of your coverage are outlined in your Vehicle Service Contract.
What does a Vehicle Service Contract cover?
Each Vehicle Service Contract is different. Buyers must read their Vehicle Service Contract carefully and ask questions to fully understand what’s covered.
What vehicle upkeep am I responsible for in order for my service contract to remain valid?
While it varies from contract to contract, most Vehicle Service Contracts explicitly state which items the contract holder is responsible for maintaining regularly. This often includes regular manufacturer recommended maintenance such as oil changes and fluid checks, among others.
Where can I take my vehicle for repairs?
Most Vehicle Service Contracts allow you to choose any service center that meets the criteria specified in the contract. Many contracts require that the facility has an ASE Certified technician. Your contract provider will be able to confirm for sure if a particular service center is acceptable under the terms of your contract. If you are unsure of where to take your vehicle for repair, you can typically contact the administrator of your service contract for guidance.
If I get a Vehicle Service Contract, can I still work with my local mechanic?
Most Vehicle Service Contracts offer considerable flexibility regarding where you can have your vehicle repaired. For example, your vehicle protection plan might allow you to have the car repaired at your local dealership or any ASE certified garage. There are many different types of Vehicle Service Contracts, so it’s best to ask your policy provider this question.
How are Vehicle Service Contract claims paid?
The way claims are paid varies from agreement to agreement. In many cases, payments are hassle-free for you because they are paid directly to the service center. In other cases, a contract holder may be reimbursed for repairs made. Often, the policy owner is required to contribute via a deductible payment. The amount of the payment is stated in the agreement and can be adjusted before purchase. Ask your contract representative or review the terms and conditions of your contract for more details.
How does a Vehicle Service Contract deductible work?
Most Vehicle Service Contracts come with a deductible. Typically, the deductible only needs to be paid one time on each repair visit, no matter how many different items are fixed.
What if I want to cancel my Vehicle Service Contract?
The specifics of cancelling a Vehicle Service Contract vary from provider to provider. Cancelling within 30 days of purchase will often provide for a full refund. After that period, and if the contract was not utilized, a pro-rata refund may be available depending on what is specified in the contract. In some cases, an administrative fee may reduce the amount of your refund. Ask before purchasing your service contract what the terms of your agreement allow, including whether there are any administrative fees associated with cancelling.
What happens if I sell my car?
Is my Vehicle Service Contract transferrable? In many cases, a Vehicle Service Contract is transferrable. This added benefit can add value to your vehicle when potential buyers are looking into purchasing it. Passing along peace of mind can help make the sale go more quickly and smoothly.