Debunking 3 Common Myths About Vehicle Service Contracts

Protecting your vehicle, your family, and your budget can be overwhelming. It’s not surprising that there are many misconceptions about Vehicle Service Contracts (VSCs). You may be apprehensive about purchasing a VSC because of what you’ve heard through the grapevine or read on the internet. This likely makes you wonder whether VSCs are worth it, and what exactly they cover.

We’re here to dispel some common VSC myths and give you the facts about VSCs. We’ve outlined the three common myths about VSCs to set the record straight once and for all.

MYTH 1. Vehicle Service Contracts are the Same as Extended Warranties

This is a common misconception. The term “extended warranty” is actually a misnomer. A warranty is provided with the purchase of a new vehicle. Commonly, many manufacturer’s warranties on new cars only last three years or 36,000 miles.

VSCs, on the other hand, can be purchased to provide repair coverage after the manufacturer’s warranty expires. But the VSC does not extend the coverage of your original manufacturer’s warranty. Instead, it is a promise to pay for covered auto repairs with a new contract between the consumer and the contract provider. VSCs also may cover different repairs than manufacturers’ warranties, may offer different coverage limits, and may include additional benefits like trip interruption coverage.

MYTH 2. Insurance and Vehicle Service Contracts Cover the Same Things

Similarly, many people mistakenly believe that they don’t need a VSC because they already have auto insurance. However, these two types of plans cover very different things. Auto insurance plans are not designed to cover collision repairs outside of accident conditions. VSCs are there to help with covered auto part repair needs that occur as a result of mechanical breakdowns and are outside of accident conditions. While it’s required by law to have car insurance, it can be beneficial for drivers to have both auto insurance and a VSC to avoid unexpected auto expenses.

Myth 3. Vehicle Service Contracts are Expensive and Lock You into a Contract

Another common myth about VSCs is that they are expensive and require a long-term commitment. On the contrary, some VSCs require no down payment and offer the ability to cancel at any time (administrative fee may apply; see VSC terms and conditions for complete details). Additionally, VSCs are designed to save your budget from paying for expensive auto repairs. Instead of paying out of pocket for those high-cost bills, a VSC will help pay for covered repairs (deductible and plan limits apply).

Peace of Mind with a Vehicle Service Contract

VSCs offer drivers peace of mind knowing that in the event of a covered mechanical breakdown, they can simply bring it to a licensed repair facility and, after paying the deductible, have their plan pay for covered repairs.