Vehicle Service Contracts: Should I Buy an Extended Warranty?
Extended Warranty
Auto Warranty

Vehicle Service Contracts: Should I Buy an Extended Warranty?

Should I buy an extended warranty?

That’s a question everyone asks of themselves when buying a new car from a dealership. Whether the car is hot off the assembly line, or it’s a used car that’s new-to-you, the warranty question will always pop up.

Yes, it will cost extra money – but is it worth it? Some of your friends and family will say yes, while others may try to dissuade you from the extended warranty.

The truth is that you’re the only person who can really answer that question. Today, we’re going to lay out some facts and information for you that’ll hopefully help you when you find yourself wondering, “Should I buy an extended warranty?”

What is an Extended Warranty?

To answer the first question, we need to tackle this one first. What exactly is an extended warranty?

At its most basic, an extended warranty is an agreement between you and whichever dealership you buy your car from, in which the dealer agrees to repair and service your vehicle after the manufacturer’s warranty expires.

This is formally referred to as a Vehicle Service Contract (or VSC, for short). Depending on who provides the VSC, your terms of service and repair may differ from others.

The point of a VSC is to help cover your vehicle for as long as possible, against any serious repairs that could leave a huge dent in your wallet.

What Does it Cover?

As stated above, an extended warranty’s coverage differs depending on whom you buy it from. Some providers offer incredible coverage, while others will try and add exceptions to every possible rule, essentially leaving you on the hook for the full cost of any and all repairs.

Generally speaking, a VSC will cover repairs to integral motor parts that aren’t supposed to fail under normal wear and tear conditions. A popular term to describe warranties is a “Powertrain Warranty.

All that means is that your car’s entire powertrain – the motor, transmission, and drive train – is covered against any problems for either a set amount of miles or years – whichever occurs first.

A powertrain warranty will not cover normal wear and tear like CV joints, worn-out batteries, tie rods, or any other pesky little repairs that crop up through normal use of your vehicle.

However, those repairs tend to be much cheaper in comparison to transmission, motor, and drive train work.

Another popular warranty type is a “bumper-to-bumper warranty.” As its name implies, it covers just about everything from bumper-to-bumper.

But be careful – a bumper-to-bumper warranty isn’t so all-inclusive that any damage or wear is automatically covered. As you can see here, each VSC provider has different coverage options they’re willing to offer.

Things that aren’t covered under a bumper-to-bumper include damages that you’d normally report to your insurance company. Body damage, broken glass, any damage as a result of an accident – these are all instances where your extended warranty won’t come into play.

However, for other parts of the vehicle that aren’t supposed to wear out too quickly – like timing belts, some hoses and lines, thermometers, and other sensors – a bumper-to-bumper warranty has your back.

What Does it Cost?

The cost an any extended warranty depends entirely on your vehicle and the amount of coverage you want or need.

You can get a good idea of initial costs by using this handy quote tool. A good average, though, is right around the $2,200 mark. Bear in mind, this takes into account average vehicle ages and wear rates from across the entire country. Depending on what you drive, where you live, and your driving history, you may end up with a cheaper or more expensive extended warranty quote.

Why Should I Buy an Extended Warranty?

Now that we’ve discussed the ins-and-outs of extended warranties, you’re likely wondering just whether or not it’s worth the money.

Let’s play a hypothetical game for a moment. Imagine that you just drove a brand-new vehicle off the lot. It’s exactly what you wanted, you grabbed it at a great price, and you can’t wait to show it to your friends and family.

For the next few years, the car runs fine. You don’t have any issues, perform all the recommended maintenance, and really enjoy driving it.

Then one morning the check engine light comes on. After getting it checked out by a local auto parts store, you learn that there’s a valve misfiring in your engine, or your transmission is slipping.

In these instances, the extended warranty comes into play. If you only have the manufacturer’s warranty, you’re likely looking at one that covers only the powertrain, and it likely expires after 30,000 miles or 3 years, whichever comes first.

If you find out you have a serious motor or transmission problem at 30,001 miles, or a day after the 3-year anniversary of your purchase, you’re completely out of luck.

You’re also on the hook for thousands in repairs, which can be crippling financially. Not to mention how upset you’ll be to lose your dream car.

With an extended warranty, all of the above scenarios would be covered. It’s a lot like getting insurance for a flood or earthquake on your home if you live in Iowa. A flood and earthquake are extremely unlikely in that part of the country, but it’s always better to be safe than sorry, right?

The same logic applies to a VSC. You very well may end up not needing it, but in the event you do, it’ll save you thousands of dollars and hours of sleep.

Now, if you add a bumper-to-bumper warranty on top of a powertrain warranty, you’re looking at even more coverage for a myriad of situations. Again, specific coverage depends on whom you get your VSC from, but the added insurance against any out-of-the-blue problems is a great way to protect the vehicle you spent a long time saving up and looking for.

How Do I Get a VSC?

Most dealers will offer a warranty program. Even used car dealers have options they can present you with.

If you don’t have that option, or you’re buying your vehicle from a private party instead, don’t worry. There are tons of other ways to get the extra coverage you and your new car need.

Some companies exist solely to provide VSC contracts to consumers. You’ll want to make sure you do your homework, find the best rates, and the exact coverage you need. But it’s not too hard to get the VSC you’ll need.

Protect Your Car Today

When you’re in the car-buying process, it’s almost a guarantee that you’ll ask yourself at some point, “should I buy an extended warranty?” It’s a normal question that’s part of today’s car shopping experience.

With the information you have now, you can make an informed decision on whether or not this extra coverage is right for you. Some people benefit hugely from it, while others may never use their coverage. In either situation, though, the peace-of-mind that a VSC brings can’t be overstated enough.

Remember that just because you do buy extra coverage doesn’t mean you’re going to automatically have everything under the sun covered. You want to read the fine print and understand exactly what your VSC provider says they will and won’t cover. Some companies try to pull a fast one on consumers, so pay particular attention to this part of the process.

You’ll also want to pay attention to any offers from the manufacturer on your vehicle. For some used cars, and almost all new cars, a Powertrain warranty can be included in the purchase price. If you can package a Powertrain warranty along with bumper-to-bumper coverage from your dealer, you’ll be in great shape if any major repairs come up.

Lastly, you do need to make sure that you’re purchasing a VSC that fits your budget. If you can get both the car you want and extra protection, then you’ve finalized the car-buying process with a huge win. Staying within your budget is important, even when adding something as valuable as a VSC.

At, you can see reports on the trustworthiness, reliability, and affordability of different VSC providers. This type of information is invaluable in making the final choice on who you want your VSC provider to be.

If you’re ready to look for an extended warranty for your vehicle, head over to our site today. We’re ready to help you drive with the peace of mind you deserve.

Leave a Reply