What's the Difference between Powertrain Warranties and Vehicle Service Contracts?

The term “manufacturer warranty” ultimately boils down to protection of your vehicle. However, there are many different types of warranties such as bumper-to-bumper protection, rust/corrosion warranty, and powertrain warranty.

It’s important to know the key differences between the three types of warranties. Bumper-to-bumper protection, for instance, is generally designed to cover everything between your car's front and back bumpers (although it’s always prudent to read the fine print), typically for the first three years of ownership. Then there’s the rust/corrosion warranty, which is intended to cover premature deterioration of your vehicle’s major sheet metal. There’s also the powertrain warranty, which is designed to cover the parts responsible for propelling your vehicle forward. Warranties are acquired at the time you purchase the vehicle and often included in the final purchase price. 

Here we’re going to focus on this last mode of protection, the powertrain warranty: what it is, what it does/does not cover, and how it differs from another type of coverage known as the Vehicle Service Contract (VSC).

Powertrain Warranties 101

A powertrain warranty is a type of warranty typically offered by your car’s manufacturer. While every warranty is subject to its individual terms and conditions, the coverage on a powertrain warranty is not bumper-to-bumper, but specific to your vehicle’s powertrain.

What is a powertrain?

A powertrain is your vehicle’s propulsion system and includes your engine, transmission, driveshaft, and axles. Together these components work together to deliver power to your car so it can move.

Powertrain warranty coverage and duration

Powertrain warranties help pay for covered repairs to the components that make up your car’s propulsion system. However, coverage may apply only if your car’s age or mileage fall below a predetermined threshold determined by the manufacturer. Commonly, your vehicle must be less than 5 years or 60,000 miles from the original service date, whichever comes first. 

How Do Powertrain Warranties Differ From Vehicle Service Contracts?

While both powertrain warranties and Vehicle Service Contracts (sometimes called a "car service contract") will help pay the cost of covered repairs, they may differ in terms of what and how they cover your vehicle: 

1) VSCs are offered by independent providers: Whereas powertrain warranties are typically provided by the car’s manufacturer, VSC providers are independent companies.

2) VSCs may offer flexible contracts: Whereas powertrain warranties are extended up to a predetermined time or mileage threshold, some VSC companies operate on a pay-as-you-go, cancel-any-time agreement (a cancellation fee may apply).

3) VSCs may build additional support into their contracts: Additional support may include roadside assistance, rental car reimbursements, hotel discounts, and trip interruption coverage when repairs leave you without a vehicle.

4) VSCs may not require down payments: Some VSC providers may not require any down payment to start coverage. Waiting periods may still apply.