There are different names for a car warranty, including factory warranty, vehicle service contract, extended auto warranty, and aftermarket warranty. Some of these warranties are different, some are the same, and some aren’t warranties at all. How can you tell the difference? Here’s a clue: Only one of these contracts is actually a warranty.
That’s right. A factory warranty is the only true warranty, whereas the other types of warranties are actually vehicle service contracts. In fact, extended auto warranties and aftermarket warranties are all just other names for vehicle service contracts.
What is a warranty, and what is a vehicle service contract?
- An auto warranty (i.e., a factory warranty or manufacturer’s warranty) covers the cost of repairs and replacements for free as an implied part of the cost of the new vehicle. It covers defects in materials or workmanship.
- A vehicle service contract covers the cost of repairs and replacements once the factory warranty has expired. A “VSC” is optional and purchased at an additional cost.
How Does Coverage Compare to the Factory Warranty?
Factory warranties typically have two parts: a shorter, limited bumper-to-bumper warranty that covers all manufacturer parts, and a longer powertrain warranty that covers the vehicle’s engine, transmission, and drive axle components. Terms are typically three years or 36,000 miles and five years or 60,000 miles, respectively.
Aftermarket warranties, which can be purchased from a dealership or a third-party provider, can offer several levels of coverage with various terms, often adding another five years or up to 120,000 miles. These terms only apply after the factory warranty expires.
In addition to repair coverage, a quality aftermarket car warranty will also include roadside assistance benefits, such as towing, rental coverage, trip interruption, and even battery jump services.