What is a vehicle service contract? (2022)

A Vehicle Service Contract (VSC) is a paid plan that covers auto repairs after your car’s factory warranty has expired. Also known as extended car warranties, these protection plans can help owners avoid the stress of expensive repair costs.

In this article, from the Home Media Reviews team, we explain what a vehicle service contract is, what it typically covers, and how much you can expect for that vehicle protection. We evaluated them Best Extended Car Warranty Companies that will help you find the most suitable option for you and we recommend comparing free quotes before deciding on a vehicle maintenance contract.

Overview of vehicle service contracts

While a vehicle maintenance contract can also be called an extended warranty, it doesn’t actually extend the warranty manufacturer guarantee Vehicle manufacturer insurance. Instead, a third party usually handles certain repairs.

With car service contracts, you have many insurance options. There are plans that are reflected Powertrain Warranties, which only covers the engine, gearbox and drive axle. You can also find vehicle service contracts that are similar to this Bumper to bumper warranties who come with new cars.

Depending on the provider and plan you choose, you can insure one of the following vehicle components:

  • air conditioning
  • electrical system
  • brakes
  • suspension
  • fuel system
  • entertainment system
  • navigation system

Common exclusions in vehicle service contracts

As with factory warranties, vehicle service contracts do not cover all parts of a vehicle. Read the fine print in the contract before purchasing a vehicle protection plan so you know what is and isn’t covered. Here are some common exclusions:

  • Wear parts such as tires and brake pads
  • Damage from lack of routine maintenance
  • Damage caused by modified components
  • Damage caused by uncovered parts
  • Damage caused by collisions, environmental influences or vandalism

Vehicle service contracts also do not cover pre-existing problems. Therefore, most providers have a waiting period before the insurance cover comes into effect.

What is covered depends on your choice of plan. If you want maximum protection and security, your best bet is to find an exclusion plan that covers everything but a short list of components.

Additional benefits of vehicle service contracts

Many vehicle service contracts include perks at no additional cost. These are the most common additional benefits:

  • 24-hour roadside assistance: Lockout assistance is often included, as is battery jump start and fuel delivery if you run out of gas.
  • Rental car refund: If your car is in the workshop for insured repairs, many tariffs will help you with the rental car costs.
  • Trip Interruption Protection: If you have an insured breakdown that is more than a certain distance from your home, this benefit will help cover the cost of food and lodging.
  • 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 extended warranty independent vehicle maintenance contracts allow you to take your car to any licensed mechanic for covered repairs. If your contract is with an automaker, you will likely need to take your car to one of their dealerships.

The process for submitting a claim depends on the provider you choose. Some require you to prepay the repair shop and then reimburse you. Others pay the garage directly, so you only have to pay your deductible out of pocket.

Sources of supply for vehicle service contracts

You can purchase a vehicle maintenance contract from a dealer or a third party. There are a few key differences to consider when making this decision.


One good thing about buying an automaker’s vehicle protection plan from a dealer is that you’re always getting 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 that you’d rather use.

Third party providers

The independent route to 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, you can get coverage from independent companies almost anytime.

How much does a vehicle maintenance contract cost?

You can count on the payment between about $99 and $129 per month for a vehicle maintenance contract. Extended Warranty Cost depends on the selected tariff, the type of vehicle and the number of kilometers on the odometer. Our team received the following protection plan offers for a 2020 Toyota Corolla with 30,000 miles, each with a $100 deductible:

Is a vehicle maintenance contract worth it?

The security that comes with a long-term vehicle maintenance contract can be well worth the investment. These protection plans are particularly good options for drivers who want to keep their car well past the factory warranty expiration date.

To help you decide whether a car service contract is worth it, we’ve put together a list Repair estimates by RepairPal. The estimates below are for general repairs on a 2020 Toyota Corolla, the same car covered by the plans in the table above:

Our recommendations for vehicle service contracts

We researched all the major vehicle service contract providers and rated them on a 10 point scale. The following companies are our top picks based on coverage options and affordability:

Endurance: Most extensive coverage

overall rating: 9.2
coverage rating: 9.7
cost assessment: 9.0

Endurance offers six levels of coverage for up to eight years and over 200,000 miles. Every Endurance vehicle service agreement includes a free year of Endurance Elite benefits, including tire repair or replacement, key fob replacement, total loss protection and a collision rebate of up to $500 per accident.

Read more: Endurance Warranty Review

Carchex: Outstanding reputation in the industry

overall rating: 8.6
coverage rating: 9.1
cost assessment: 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, all of which come with flexible payment plans. Carchex works with more than 30,000 repair shops across the country.

Read more: Carchex review

CarShield: Cheapest

overall rating: 8.4
coverage rating: 9.1
cost assessment: 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 peers in the extended auto warranty industry.

Read more: CarShield test

Our methodology

Because consumers rely on us to provide objective and accurate information, we have created an extensive rating system to formulate our ranking of the best extended car warranty companies. We collected data on dozens of auto warranty providers to rank the companies based on a variety of ranking factors. The end result was an overall rating for each vendor, with the companies with the most points topping the list.

In this article, we selected vendors with high overall ratings and cost ratings. The cost assessments were informed by auto warranty rates and available deductibles.

*Data correct at time of publication.

About Gloria Skelton

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