What Does a Vehicle Service Contract Cover? (2024 Guide)

An extended vehicle service contract covers the cost of repairing or replacing parts of your vehicle that break down over time. A plan comes in handy if you’re not prepared to pay for repairs, especially ones that cost hundreds or thousands of dollars.

Exactly what parts a vehicle service contract covers will depend on details like your type of warranty, level of coverage, and car’s make and model. As vehicle service contract specialists, our team at CARCHEX can answer all of your questions about what a car warranty or vehicle service contract covers.

There are several different types of car warranties, with the two main categories being factory warranties and extended warranties. Within each of these types, you can find bumper-to-bumper and powertrain warranty plans. Factory warranties also cover other potential car issues with corrosion and factory adjustments.

Note, both types of warranties come from your vehicle manufacturer. Extended warranties typically have to be purchased before your factory warranty expires. We explain more below.

Factory Warranty vs. Extended Warranty

When you buy a new car from the dealership, the vehicle will almost certainly come with a factory or manufacturer’s warranty. This type of warranty is usually offered for new vehicles and certified pre-owned (CPO) cars, but details may vary. A manufacturer’s warranty is meant to cover your vehicle’s defective parts or workmanship flaws.

The length of your factory warranty is based on a certain number of years or miles, whichever limit comes first. A factory warranty is typically transferable between owners if coverage hasn’t expired when you sell the car.

Below are examples of new car factory warranties from the most popular automakers in the U.S.:

Before your factory warranty expires, you can purchase an extended warranty. Coverage options for extended auto warranty plans may be different than for your factory warranty. Also, automakers aren’t your only choices for buying extended vehicle coverage.

Many drivers turn to reputable third-party auto protection plan companies like CARCHEX for their affordable and customizable auto coverage choices. While independent companies offer similar coverage, their plans are called vehicle service contracts rather than extended warranties. When purchasing from a third party, you can get coverage anytime, even after your factory warranty has expired.

Bumper-to-Bumper Warranty

A bumper-to-bumper warranty provides the most comprehensive coverage you can get for your vehicle from its manufacturer. It’s also called an exclusionary warranty because it takes care of every car part other than components that are specifically listed as exclusions.

This car warranty covers a vast number of components and is offered as both a factory and an extended warranty by the manufacturer. The standard length of a bumper-to-bumper warranty is three years or 36,000 miles, but your specific warranty may last longer.

Third-party companies offer a similar level of coverage, called exclusionary coverage, that lists only excluded items in the contract.

Generally speaking, the following auto parts and situations will not be covered by your car warranty or vehicle service contract:

• Routine maintenance: There’s no coverage for regular maintenance services like oil changes and tire rotations.
• Wear-and-tear items: Parts that break down like brakes, brake pads, windshield wiper replacements, and headlight bulbs receive no protection.
• Exterior and body panel damage: Dings and scratches in the paint aren’t covered, though your corrosion perforation warranty may cover certain situations.
• Interior damages: Cosmetic issues like holes in the seats and broken plastic are your responsibility.
• Issues caused by improper car care: If you neglect routine car upkeep or participate in reckless driving habits, your warranty will be voided.
• Damage from accidents, theft, and severe weather: Issues caused by car collisions, vandalism, and theft are excluded from coverage, as are damages from hail, flooding, and fallen tree branches.
• Alterations or modifications: Installing nonfactory parts and tampering with the odometer will void your warranty coverage.

The best way to determine what a car warranty or vehicle service contract covers and excludes is by reading the fine print in your owner’s manual or warranty booklet. This is especially wise since not every car make and model have the same types and length of coverage.

Are Tires Covered Under Warranty?

Tires are counted as wear-and-tear items and aren’t covered by most factory warranties or vehicle service contracts. Instead, automakers refer drivers to the tire manufacturer they purchased from. These tire warranties usually last for four to six years, the length of the tread life, or a certain number of miles.

Speak with your tire manufacturer to determine exactly what your warranty covers. Remember that your plan may be voided if you don’t follow proper maintenance standards like regularly rotating and inflating your tires.

After your new car limited warranty expires, the cost of car repairs will no longer be covered. You’ll then be responsible for covering all auto repair bills, no matter the part or price tag. Extended vehicle warranties help to offset these upfront costs through low monthly payments.

The peace of mind that a car warranty or vehicle service contract covers drivers’ needs is also a reason that people buy coverage. You may want to purchase an extended plan if you’d sleep better by knowing you won’t be surprised by costly and unexpected repairs.

If you’re planning to keep your car for a while, it’s best to consider an extended warranty through your manufacturer or a third-party coverage plan. That’s because vehicles are bound to have issues as they age. If you’d like to sell it in the next year or two, however, you may not need extended coverage.

Extended Car Warranty Cost

The price you pay for extended coverage is largely dependent on your specific plan, though most drivers report paying between $1,500 and $2,500 for coverage. Below are some factors that make up your extended auto warranty cost:

• Car make and model: Luxury cars and expensive models usually drive up the cost of your warranty due to the price of replacement parts.
• Vehicle age: Aftermarket warranties for older cars may cost more than for newer cars since they generally need more repairs.
• Current mileage: Cars with high mileage are more expensive to cover.
• Car condition: If your car is unreliable or damaged, expect a higher warranty cost.
• Coverage plan: Car warranties that cover more vehicle systems are pricier but typically offer greater bang for your buck.
• Deductible amount: Plans with high deductibles have lower premiums.
• Chosen provider: Costs vary between car dealerships and different third-party providers, so ask for car protection plan quotes from CARCHEX and other companies.

What To Consider When Buying a Car Warranty

As you think about the type of extended warranty or extended protection plan you want to purchase, ask yourself the following questions:

Whether you want to know what a vehicle service contract covers or just need to get a quick quote, our team at CARCHEX can offer guidance. We’ll answer any questions you may have and can compare car protection plans to make sure you receive the best possible coverage.

Call 866-261-3457 to speak with one of our CARCHEX representatives today.