Vehicle Service Contract Q&A

Questions about Vehicle Service Contracts always appear when you are talking about buying a preowned car. Do not worry! This article will help you answer all your concerns.

Let’s start with basic questions about warranty:

  • What is a Factory Warranty? 
    • A factory warranty is a guarantee that the factory will repair or replace particular parts or components of your vehicle that are defective. However, a factory warranty does not cover regular maintenance and oil changes. A factory warranty can still apply to a used car if it has not expired, or you purchase a certified pre-owned warranty from the manufacturer. Additionally, some dealerships offer Vehicle Service Contracts (VSCs). You can purchase VSC for vehicles if it meets certain requirements.
  • How to Check if a Car is under Factory Warranty?
    • You can find out if your car is still under factory warranty by checking its Vehicle Identification Number (VIN) and calling your dealership or by checking the Warranty Checklist page of a CarFax.
  • What is a Vehicle Service Contract (VSC)?
    • A Vehicle Service Contract is a protection plan offered by car dealers that covers mechanical, electrical, or electronic breakdowns or failures for a set period of time after the car is sold.
  • How Does a Vehicle Service Contract Work?
    • If you have a warranty on your car, you can take it to a licensed repair shop for a diagnosis if your car breaks down. Your plan provider or administrator will pay the repair shop directly, minus your deductible, if the repairs are covered under the Service Contract.

Now, let’s look at do you need to buy a Vehicle Service Contract?

Usually, the vehicle comes with a 3 years/36,000 miles Limited Comprehensive warranty and a 5 years/60,000 miles Powertrain warranty. Thus, when you are buying a preowned car, you may still have a remaining portion of a factory warranty. Just ask the sales consultant at the dealership to find out this information.

If your car does not have a factory warranty anymore, then you may need to buy a Service Contract. But first, think about the reliability of your car. A sales consultant and review will help you with this. Also, you should conduct research to find the right car brand to fulfill your needs. Then look at the mileage of the car you chose. Also, think about how long you are planning to keep your vehicle. Usually, a Vehicle Service Contract covers your vehicle anywhere from 2 to 5 years. If you expect to keep your car for several years, a longer plan may make sense for you. 

Types of Vehicle Service Contracts 

After you buy a Vehicle Service Contract, let’s discuss different options. There are several levels of Service Contracts for consumers that cover different vehicle components and repairs.

  • Powertrain: Internally lubricated parts of the Engine, Transmission, and Axles.
  • Standard: Internally lubricated parts of the Engine, Transmission, Axles, and the basic electrical system of the vehicle.
  • High Technology: Powertrain plus Standard plus Electrical and some Electronic coverage (stated component coverage)
  • Comprehensive: Mirrors the factory Limited Comprehensive Warranty.

Vehicle Service Contracts Cost 

Now, let’s look at Vehicle Service Contracts costs. It depends on the Level of Coverage that you choose. So, it is better to do some research first. Also, the Vehicle Service Contracts costs depend on:

  • Vehicle make, model, year, and mileage
  • Chosen coverage level
  • Contract length
  • Deductible

Thus, if you are buying an older vehicle with higher mileage, then expect the cost of the plan to be higher. But it is better to have a Vehicle Service Contract because often repairs cost much more than the cost of the warranty plan. Also, Vehicle Service Contract may cover multiple repairs Thus, take your time to choose the right Vehicle Service Contract. 

Now you know more about Vehicle Service Contracts and are ready to buy a perfect vehicle for yourself. We can help you with this process and guide you through all steps of How to Become First Time Buyer. Also, if you are from Indianapolis, Indiana, do not hesitate to reach out to Indy Auto Man for the best used car dealership in town.