Extended Auto Warranty vs. Vehicle Service Contract

extended auto warrantyIn the automotive industry technical terms can be thrown around so much that they can make your head spin if you don’t know exactly what’s being talked about. Often times two terms might sound like they are completely different but actually mean the same thing. This is very true for the two terms: extended auto warranty and vehicle service contract. Let’s talk about each term separately to make it easier to understand.

Extended Auto Warranty:

This is probably the more familiar and recognizable of the two terms. An extended auto warranty is a warranty that is placed upon your vehicle once your manufacturer’s or factory warranty has expired. New vehicles come with these original factory warranties to protect consumers in the event of an error that may have occurred during the manufacturing process. If something does go wrong while your vehicle is still under warranty, the manufacturer will pay for repairs and replacements. The extended auto warranty picks up right where the original warranty leaves off.

Vehicle Service Contract:

A vehicle service contract might sound like some sort of financing plan for your vehicle, however, it actually works in the exact same way as an extended auto warranty. After your manufacturer’s warranty expires, a vehicle service contract promises to pay for parts, labor, and taxes in the event of a mechanical breakdown. These contracts are from third-party suppliers and are generally less expensive than an extended auto warranty and offer various levels of coverage that can fit into any specific vehicle budget.

So why have two different names for the same thing? Well the answer is simple, it’s because one is the correct term and the other is not. In order for something to be named a “warranty” it needs to be provided directly from the company that produced the product that the warranty is for. So because most extended auto warranties come from third-party providers, the correct term for extended coverage on your vehicle is a vehicle service contract.

Now that the name is familiar to you, it would be foolish for you not to have a vehicle service contract on your car. With repair bills all time high, a vehicle service contract can not only protect your auto but also your wallet!

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