Vehicle Service Contracts

Vehicle Service Contracts

A Vehicle Service Contract provides coverage when a covered vehicle fails to perform as originally intended. Such as when a vehicle breaks down, wears out, or simply stops functioning due to a defect. A Vehicle Service Contract is also called an Extended Warranty because it can extend the manufacturer’s warranty for a specified period of time. A key difference between a warranty (provided by the manufacturer, retailer, etc.) and Vehicle Service Contract is that you must pay an additional sum of money for the Vehicle Service Contract instead of having the cost be included in the purchase price of the vehicle.

Key Differences between VSC and Insurance

There are key differences between a Vehicle Service Contract and an insurance policy. Vehicle insurance typically covers negligent behavior or an event that causes property and/or liability damage such as when a driver runs a red light and hits a vehicle.This driver would be liable for negligent behavior.

However, if the engine in an vehicle overheats and breaks down while being operated properly, the product has had an “operational failure” due to either a defect in materials, workmanship, or normal wear and tear. In this case, the Vehicle Service Contract will repair or replace the engine if it’s within the coverage terms. This type of event would not be covered under an insurance policy.

Why is a Vehicle Service Contract Important?

A Vehicle Service Contract is a critical risk-transferring option for you.The providers pay for millions of covered claims each year. Awareness of the value and benefits of Vehicle Service Contract provides greater transparency to you regarding your financial exposure on your vehicle. Vehicle Service Contract helps reduce or minimize the burdensome costs of replacing or repairing a vehicle or its parts when there’s a failure or component breakdown.

Let us discuss how you can be on top of your vehicle service costs.