Buying a used car is a big decision, and you want to make sure you’re protected if something goes wrong. That’s where the whole Used Vehicle Extended Warranty vs Car Service Contract debate comes in. But figuring out which option is right for you can feel like trying to solve a complicated puzzle. This article will help you cut through the jargon and make an informed decision about protecting your used car purchase with a vehicle service contract or an extended warranty.

Both used vehicle extended warranties and car service contracts offer protection against unexpected repair costs. This can save you thousands of dollars if your vehicle has a breakdown. Although these terms often get thrown around interchangeably, knowing the differences can be beneficial for making sure you are getting the coverage that is right for you.

Understanding Used Vehicle Extended Warranties

Think of a used vehicle extended warranty as an extension of the manufacturer’s original warranty. It provides coverage for repairs for a specific period or mileage. But there’s a catch: it’s only offered by the vehicle’s manufacturer.

Advantages of a Used Vehicle Extended Warranty:

  • Backed by the manufacturer: This gives a feeling of trust and reliability. You are working directly with the people that made the vehicle.
  • Nationwide coverage: You are able to take your car to any dealership authorized to service that make and model.

Disadvantages of a Used Vehicle Extended Warranty:

  • Limited availability: You are not able to buy these after the factory warranty has already expired.
  • Less flexibility: Compared to service contracts, extended warranties tend to have stricter repair restrictions.

Exploring Car Service Contracts

Now let’s look at Car Service Contracts. A car service contract is a separate agreement that you get to cover specific repairs. You can purchase these from a dealership, warranty company, or an independent company. This option offers a lot more freedom to choose the right plan for your needs. It also comes with perks that extend beyond repairs, similar to an extended warranty.

Advantages of Car Service Contracts:

  • Available for used cars: You have options for covering your car no matter how old your car is.
  • Customizable coverage: There is flexibility to find a service contract that suits both your budget and your vehicle’s needs. For example, Owner Direct Network offers both Fixed Time and Miles plans and Subscription plans.
  • Additional benefits: You might find some extra help with things like towing, rental car reimbursements, and sometimes roadside assistance, based on your coverage.

Is This an Extended Warranty?

Technically only the manufacturer can extend a car warranty. It is, however, very similar to an extended warranty because it helps to protect your vehicle against unexpected costs of mechanical repairs. Many car dealers offer vehicle service contracts but you can also find coverage through third-party providers.

Here at Owner Direct Network, you’ll also find additional benefits such as:

24/7 Roadside Assistance

Get a benefit of $100 each time you need help. Whether it’s towing, getting help with a flat tire, or if you’ve locked yourself out of your car and need locksmith assistance.

Rental Car Reimbursement

When you’re stuck getting your car fixed it can throw a big wrench in your life. A car service contract will give you peace of mind by reimbursing you up to $50 every day for a rental car. Whether you choose to get a rental car, use a ride share service, or any other transportation you need, you are covered for up to 10 days.

Special Electronics Coverage

Many electronics in vehicles nowadays are specialized and require expert care. Our plan provides comprehensive coverage for these advanced systems, ensuring that your vehicle’s high-tech features, such as navigation, infotainment, and driver assistance systems, are protected and maintained. Enjoy peace of mind knowing that your vehicle’s cutting-edge technology is covered by our specialized plans.

Choosing Between Fixed and Subscription Plans

You can sign up for a vehicle protection plan from a subscription plan or fixed time and miles plan: Fixed Time and Miles Plans have an average price of about $1,640.

Fixed Time and Miles Plans Benefits:

  • Predictable Costs: You get a set price that doesn’t change out of the blue. This lets you better manage your budget because you know what to expect.
  • Peace of Mind: You pay a one-time payment for the term you choose to make things easy.
  • Long-Term Protection: As long as your term is still active, you will have help paying for covered repairs.

On the other hand, Subscription Plans cost around $45 per month, making it more budget-friendly.

Subscription Plan Benefits:

  • Budget-Friendly: It can be easy to fit this cost into a monthly budget.
  • Adaptive: Based on how often you drive you can change the level of coverage that suits you.
  • Flexibility: You can stop using the service whenever you need to without worrying about a penalty.

It used to be you only had the option of purchasing an extended auto warranty through a dealership, however, this isn’t the case any longer. We help our clients rethink the options for covering the unexpected auto repair costs that come along with owning a vehicle. Owner Direct Network lets you purchase a vehicle protection plan directly from an extended vehicle service contract provider.

FAQs about Used Vehicle Extended Warranty vs Car Service Contract

Is a service contract better than an extended warranty?

The answer depends on your situation and preference. An extended warranty, offered only by a manufacturer, may offer broader coverage and nationwide service options but will likely be more expensive. A service contract can be tailored to fit your budget and needs with additional benefits, but make sure to read the fine print regarding restrictions.

Is it worth buying an extended warranty on a used car?

Again, it depends. If you have an older vehicle with high mileage and anticipate needing repairs, an extended warranty or a service contract can offer peace of mind. Especially considering used car values have increased by 29% in recent years. You should weigh the cost of coverage against potential repair costs. Also consider how reliable the car model is, what its history is, and how long you plan to keep it. If the manufacturer offers a reliable extended warranty at a reasonable cost, that could be a safer option than choosing an unknown provider.

What is the difference between a service agreement and a warranty?

There’s not a difference. They essentially mean the same thing and often get used interchangeably.

What are the disadvantages of an extended warranty?

Extended warranties can have higher upfront costs, potential restrictions on repair options, and pressure tactics from dealerships during the sale process. It’s important to thoroughly read the terms, including covered components and procedures for claiming benefits, before committing.

Conclusion

When you’re making a choice between Used Vehicle Extended Warranty vs Car Service Contract for your vehicle, you are aiming for one thing: peace of mind. Carefully weigh the pros and cons to determine what’s the better option for your specific car and budget.