Myths On Car Warranties


Tons of information and humongous data are available on the internet. In this digital era, search engines provide you with several helpful links. However, various misinformed links take rounds on the internet. Myths, half-truths, and blatant lies are also available on websites. The more articles you read, the more you can get confused. If you are also confused about the vehicle service contract, read until the end to clarify.

Myth #1: Auto Warranties And Vehicle Service Contracts Are Similar

Most people are confused between vehicle service contracts and auto warranties. The two contacts have similarities in that they both cover you from unpredictable mechanical decays. Auto warranties are furnished by the manufacturer only when you buy a new car, whereas any certified service provider provides vehicle service contracts.

Third-party companies, dealerships, and vehicle manufacturers can all provide service contracts. An extended warranty is sometimes interchangeable with vehicle service contracts. The length of coverage is another disparity. According to the Consumer Trade Commission, auto warranties typically cover only the first 36,000 miles or a maximum of three years. In comparison, vehicle service contracts remain functional as long as you are paying your premiums.

Myth #2: Vehicle Service Contracts Are A Scam

Some unethical individuals make it worse by their ill intentions and give a bad reputation to vehicle service contracts. Find out authentic and trustworthy authorized service providers to get genuine services. Service contracts can play a significant role in maintaining your vehicle and turn out to be a lifesaver. Make sure to read out the agreement and understand the terms and conditions of the policy. 

It would be best if you asked several questions to figure out everything before you sign any contract. Several service contracts specify that any damage outside the normal working condition is grounds for refusing your case. Suppose you go for a standard servicing and shorten your electric system, which is not normal on your contract? You need to understand the contract details to be ready for the claims procedure.

Myth #3: You Don’t Require A Vehicle Service Contract If You Have Auto Insurance

The dealers typically try to sell you various other services when buying a car at the dealership. Car insurance is one of the services. Auto insurance is a beneficial and legal requirement for all vehicle owners. However, this doesn’t imply that you do not benefit from a vehicle service contract. Service contracts and insurance include different types of damage.

Though auto service contracts and auto insurance both cover the repair cost, yet the situations are different. Auto insurance will enable you if the damage is due to theft, natural disasters like storms, and road accidents. Besides repairs and part replacements, auto insurance includes medical bills and your liability to road users, if any. However, service contracts don’t require going through the insurance.

Myth #4: Vehicle Service Contracts Cover Everything

The extent of scope typically banks on the service contract package you are purchasing. That’s the ratio; if you have paid more for the contract, you may have to pay less for vehicle repairs and vice-versa. Premium protection packages include more components of the car. For example, you can get coverage for electrical, air conditioning, braking, and trip interruption services. The highest expensive plan is usually a bumper-to-bumper deal. It’s the topmost protection plan covering almost everything, even onboard electronics, such as car stereo. However, revising any of the electronics can void their coverage. 

Therefore, it is clear even the costly protection package does not cover all. Any vehicle damages sustained that are outside the regular operation of the car will not be included. Read out the service contract thoroughly; you will find all the exclusions are elaborated there in the agreement itself.

Myth #5: A Vehicle Service Contract Is Expensive

Vehicle service contracts are surprisingly flexible when it comes to pricing. Numerous vehicle service contract dealers have varied packages. It depends on you to select the policy that serves the best and caters to your needs. Typically, vehicle service contracts start from a few hundred to thousands of dollars a year. A higher pricing plan indicates extensive coverage. 

The cost factor depends on the coverage range and length of the policy. Most policies only need monthly fees to maintain the package. You may be required to pay a deductible each time you claim, depending on the contract. All the costs are traversable and count on the mileage, make, and model of the car.

Research says by the Federal Reserve that approximately 39% of car owners typically have to go into debt to cover the cost of the unexpected breakdown. Having a service contract, the chances of needing to lend money to resolve the car is much less.

Myth #6: Vehicle Service Contracts Can Pay For Existing Issues

Pre-existing issues have led to a lot of conflicts. Service contract companies don’t cover such conditions. This realization comes the hard way when they try to get repairs for an issue before the service contract goes into the picture. 

It’s good luck if your service contract is through the vehicle’s vendor. But if you purchase the car somewhere else, then even this courtesy may not follow. You may not know about a preexisting condition at the time of purchasing.

Final Thoughts

Many myths have been busted in the article regarding the vehicle service contracts. Considering these points, you should be able to figure out a strategy to take vehicle service contracts. Read on the write-up and get clarity about your vehicle service.