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What Is A Vehicle Service Contract - Extended Warranties

Warranty & Service Contract - What’s The Difference

“Extended warranty” can be a confusing term, but actually refers to a service contract.

A true warranty comes from the manufacturer WITH the purchase of your car, while an “extended warranty” or service contract is an extra protection that you can purchase for your vehicle that extends beyond the manufacturer warranty.

Service Contracts are like health insurance for your car. They can be worked into your financing, so that you pay a small amount monthly to avoid costly repair and maintenance expenses down the road. A service contract will cover certain repairs for your vehicle during a specified coverage period.

Understand Vehicle Service Contracts In 5 Minutes

Watch this short video from the Proctor Dealerships to learn the basics of vehicle service contracts. OR keep reading below as we answer some FAQs regarding service contracts.

Should I Get A Service Contract On My New Car?

A vehicle service contract is not required when purchasing a car, and it is not required to get financing for your purchase.

Deciding whether or not to purchase a service contract for your new vehicle is a personal desicion.

While we can’t tell you whether or not a service contract is right for you, we can provide you with information to help you make an informed decision. Read the pros and cons below and call our finance & insurance department to learn specifics about our available service contracts and what they cover (850) 702-5760.

Understanding The Pros & Cons Of Buying A Vehicle Service Contract
  • Vehicles have more potential for repair as they age. A vehicle service contract provides extended coverage, beyond the manufacturer 36k mile / 3 year warranty. Vehicle service contracts can cover your vehicle for 6-8 years and up to 100,000 miles.
  • They ensure fewer out-of-pocket expenses as your vehicle begins to show signs of age & requires repairs.
  • Vehicle service contracts purchased through the manufacturer or dealer can typically be included in your vehicle financing, and worked into your monthly payments.
  • When purchased through the dealer or manufacturer, a service contract will ensure that your vehicle is always repaired using manufacturer parts, not aftermarket parts.
  • Vehicle service contracts are transferrable if you decide to sell your car. Additionally, they can be prorated and reimbursed if you decide to trade your vehicle in.
  • Vehicle service contracts can help ensure you stick to your car shopping budget by preventing unexpected expenses during the lifetime of your car.
  • Service contracts cost extra, typically $1,500 - $2,400, depending on the length and type of coverage.
  • Future repair costs are drastically reduced by a vehicle service contract, but there is still a deductible for repairs that must be paid (usually $100).
  • You may never end up needing to use your vehicle service contract. Much like health insurance, a vehicle service contract can make a bad situation much less financially burdensome, but if your vehicle is in exceptionally good health, you may never use the protection that you have paid for.
Things To Research Before Buying A Vehicle Service Contract:

What types of repairs are (and aren’t) covered in the vehicle service contract? A stated component coverage contract will list what IS covered. An exclusionary contract will list what ISN’T covered. Either way, it is important to make sure the contract meets your needs and gives you peace of mind.

What is the deductible? Is the deductible per occurance, per repair, or per visit? If you are having several repairs completed during one visit, it is important to know whether you will pay for each repair or just the single visit.

What responsibilities do you have to maintain the car? Many service contracts require that you keep up with routine vehicle maintenance, such as oil changes, in order to be eligible for coverage.

Things To Ask Yourself Before Buying A Vehicle Service Contract:

Do you put so many miles on your vehicle that you will exceed the manufacturer warranty quickly?

Will you be anxious about repairs when your car is no longer covered by the manufacturer warranty?

Do you have an emergency savings fund in the event of unforeseen auto repairs when the vehicle is out of warranty?

How long do you plan on driving this vehicle? Will you trade it in after a few years, or do you plan on keeping it for 6+ years?

What Happens To My Service Contract If I Sell My Car?

If you decide to sell your vehicle in the middle of your service contract, the good news is that the investment will not be wasted!

If you decide to sell your vehicle privately, the vehicle service contract will add value to your car and can be transferred to the new owner. Transferring is simple and affordable, typically costing less than $35.

If you decide to sell or trade your car at the dealership, your vehicle service contract will be cancelled, prorated, and reimbursed. The reimbursement can be accepted as cash or can be used as a downpayment on a new vehicle.

Shop For A Service Contract Online

Did you know that you can trade in an old vehicle and buy or lease a new vehicle directly through our website?

Bypass the showroom and save time by shopping our inventory online. Once you find the perfect vehicle, you can add protections such as Vehicle Service Contracts or Zurich Protection Packages directly through our website. Customize your payments, then schedule vehicle pickup or complimentary delivery!

  • Questions?
  • Want to know more about vehicle service contracts?
    (850) 702-5760
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