You can purchase a vehicle service contract (VSC) to cover repairs after your car’s factory warranty expires. But what does a VSC cover, and is it worth it?
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Quick Facts Plan Coverage and Perks| Plan coverage includes | Endurance Elite perks™ |
|---|---|
| Exclusionary plan | One-year membership for free |
| Powertrain plan | Tire repair and replacement |
| Maintenance coverage with Endurance Advantage | Key fob replacement |
| Roadside assistance | Total loss protection |
| Towing | Collision discount |
| Rental car | $250 rewards voucher |
| Trip interruption coverage | Endurance Protect app |
If your car’s factory warranty is about to expire, you might be thinking about getting a vehicle service contract (VSC) to cover costly repairs. But is a service contract worth the price for a used vehicle if it’s 10 years or older?
In this article, we’ll explain everything you need to know about vehicle service contracts–from coverage to pricing and how to buy one. We’ve also reviewed some of the best extended car warranty companies, and we’ll recommend three top providers.
Our review team has spent hundreds of hours researching car warranty companies to help consumers choose the best coverage for their vehicles. Writers and editors evaluate each brand based on industry data and real customers’ experiences, meeting high editorial standards to keep readers informed.
A vehicle service contract is an optional plan from a third-party company that covers specific car repairs and breakdowns after your factory warranty expires. These plans are also called extended warranties, though the manufacturer is the only company that can officially extend your new-car warranty. VSCs always cost extra and some come with other benefits like roadside assistance.
A vehicle service contract can be worth it if you clearly understand what’s covered and get a good price. Some vehicle makes and models are more prone to breakdowns with age, so it’s a good idea to check out reliability rankings for your car from resources like RepairPal or Edmunds.com.
Compare the estimated repair costs for your car over the next few years with the cost of an extended warranty to see if it’s worth it.
There are two main types of VSCs: exclusionary and stated component. Bumper-to-bumper warranties are exclusionary contracts, which provides comprehensive coverage for any mechanical failure unless the system or part is explicitly excluded in the contract.
Anything less comprehensive than a bumper-to-bumper coverage is a stated-component contract. A powertrain warranty, for example, covers a list of components in the engine, transmission, and drivetrain. With a stated-component plan, coverage is limited to specific items listed in your contract. There are also stated component plans that cover more than the powertrain and may include steering, brakes, and more.
As an example, below are the details of the five plans under the Carchex Care by Royal contract. Here’s what each warranty covers:
| Covered Part/System | Bronze Plan | Silver Plan | Gold Plan | Platinum Plan | Titanium Plan |
|---|---|---|---|---|---|
| Engine | ✓ | ✓ | ✓ | ✓ | ✓ |
| Transmission | ✓ | ✓ | ✓ | ✓ | ✓ |
| Front and rear axle | ✓ | ✓ | ✓ | ✓ | ✓ |
| Transfer case | ✓ | ✓ | ✓ | ✓ | ✓ |
| Electrical | ✓ | ✓ | ✓ | ✓ | |
| Air conditioning | ✓ | ✓ | ✓ | ✓ | |
| Steering | ✓ | ✓ | ✓ | ✓ | |
| Brakes | ✓ | ✓ | ✓ | ||
| Suspension | ✓ | ✓ | ✓ | ||
| High-tech | ✓ | ✓ | |||
| Cooling system | ✓ | ✓ | |||
| Fuel system | ✓ | ✓ | |||
| Factory navigation | ✓ | ✓ | ✓ | ||
| Exclusionary coverage | ✓ |
No vehicle service contract covers everything that could break or wear out on your car. A service contract requires a company to cover exactly what’s written inside–nothing more. Below are some example components and situations that are usually excluded from coverage:
There are other conditions you need to meet to keep your VSC valid. Usually, you’ll need to:
Vehicle service contracts often come with extra perks. These make the experience of a breakdown a bit less stressful and add value to the contract. Some examples of perks include:
With trip-interruption benefits and rental car reimbursement, there are always limits to the amount of money you’re given per day and the number of days the service will apply.
Each vehicle service contract will outline a claims process, which is required for covered repairs. Below are typical steps:
Some companies–like Carchex–sell service contracts that are administered by other companies, like American Auto Shield. Others, like Endurance, are direct warranty providers and administer contracts.
Vehicle service contracts almost always have a specified end date. This is usually dictated by the mileage on your odometer or a set number of years from the beginning of coverage. All contracts include limits for both, and whichever limit you hit first will end the service. In some cases, mileage is counted from the beginning of the contract.
For example, a quote we received for a Titanium plan from Carchex would last 7 years/125,000 miles. The car already had 30,000 miles, so the contract would expire at 155,000 miles or seven years from the contract start date.
You may have several term lengths to choose from with each protection plan. Some companies, like CarShield, offer unlimited month-to-month contracts. However, it may not be cost-effective to make a monthly payment for six or seven years. Compare the total cost of unlimited monthly plans to term-limited vehicle service contracts to see which makes more sense to you.
Reputable VSC companies will allow you to cancel a contract at any time. Cancellation policies differ by provider, but you usually have to provide a written odometer statement showing the current mileage of your car. You may also have to get this statement notarized.
You can also typically get a full refund within 30 days if you haven’t used the coverage. After that point, you’ll typically get a prorated refund based on the time and coverage used. If you’re selling your car, most companies allow you to transfer coverage to the next owner for a fee. This can increase the value of your car since buyers may appreciate the extra coverage.
You can get vehicle service contracts from third-party providers like Carchex or Endurance. You can also find plans from dealerships, and some manufacturers offer VSCs separately from their extended warranty coverage. Some insurance companies also offer repair coverage similar to a VSC. Geico’s mechanical breakdown insurance is one example.
According to quotes we received, total vehicle service contract costs range from about $1,500 to $3,500 or more depending on the provider and plan. In general, plans that cover more systems or have longer terms for mileage and years will cost more. Still, you may save some money if you buy a plan earlier in the life of your vehicle.
Below are a few sample quotes for different types of plans from a variety of providers. To obtain estimates, we priced extended warranty coverage for a 2022 Honda Civic with 50,000 miles and a 2016 Subaru Outback with 110,000 miles. All plans include a $100-$250 deductible. Costs are rounded to the nearest dollar.
| Provider | Vehicle | Plan | Monthly Cost | Total Cost |
|---|---|---|---|---|
| Endurance | Honda Civic | Supreme 2.5 years/40,000 miles | $96.84 for 30 months | $2,934.00 |
| Endurance | Subaru Outback | Mid-level Powertrain Plus 2.5 years/40,000 miles | $107.39 for 30 months | $3,251.00 |
| Carchex | Honda Civic | Unlimited month-to-month | $150.00 | Varies depending on length |
| Carchex | Subaru Outback | Unlimited month-to-month | $150.00 | Varies depending on length |
| CarShield | Honda Civic | Unlimited month-to-month | $150.00 | Varies depending on length |
| CarShield | Subaru Outback | Unlimited month-to-month | $150.00 | Varies depending on length |
With a vehicle service contract, you usually have to pay a deductible out of pocket for each visit to the repair shop. This is often $100, though some providers may offer $0 or $200 deductibles. If you have a choice, a lower deductible slightly increases the overall cost of the plan and vice versa.
Not all extended warranty companies are genuine or offer good service. Before you make a purchase, thoroughly read through the fine print of a sample contract. Also, investigate the company to see how customers rate it on the Better Business Bureau (BBB) and Trustpilot websites. Always ask about exclusions, because a VSC won’t cover every breakdown or repair.
After shopping around, you can often find affordable coverage under a vehicle service contract to help foot the bill for car repairs after your manufacturer’s original factory warranty expires. The cost of extended warranty plans will vary based on your type of vehicle, where you live, the level of coverage you pick, and other factors.
Always carefully review the terms of your plan. A vehicle service contract is worth it for the right price, but you need to know what you are signing up for.
We’ve compared the best extended warranty companies on the market to help drivers shop from reputable service contract providers. Our top picks are Endurance and Carchex.
Endurance is our top pick overall because it offers the best coverage selection and has a great customer service reputation. The company offers six coverage plans, including one with maintenance benefits for oil changes, tire rotations, and annual services. It also includes one-time benefits for cooling-system maintenance and brake pad and battery replacements.
Endurance has a 3.7-star rating out of 5.0 from over 8,700 customer reviews on Trustpilot. From our research team, the company received a score of 4.5 out of 5.0 stars.
