Getting covered: The basics of vehicle service contracts

Most vehicles are protected from operational failures while new through warranty. This is a guarantee by the manufacturer on the integrity of the vehicle as sold and covers a host of issues typically associated with potential flaws in construction, which are subsequently repaired. 

Image source: americanautoshield.com

But warranties are not forever. Warranties expire as the vehicle ages, leaving the car owner in charge of every subsequent repair not long after. This opens many risks for people purchasing used vehicles, whose warranties may have long since expired or are close to expiry. Thus, pre-owned vehicles are often sold with an alternative to a warranty: a vehicle service contract. 

Vehicle service contracts are optional packages sold alongside vehicles to cover for repairs upon the expiry of a warranty. The coverage provided by a vehicle service contract usually acts as an adjunct to other coverage policies like insurance. Although superficially similar, the two are not identical.

Operational breakdowns, the focus of vehicle service coverage, fall outside the purview of conventional auto insurance, due to its focus on covering the costs of negligence or intervening events that cause liability damages. Although vehicle service contracts can be bought for both old and new cars (and can be useful for covering repairs that fall outside warranty), their best utility is seen when purchasing a vehicle that is out of warranty. Ideally, they are bought alongside the pre-owned vehicle to ensure that the coverage lasts for as long as the vehicle is being used. 

Image source: attydc.com

American Auto Shield receives great reviews for its approach to service. Visit this website for more information the service coverage it provides for automobiles, motorcycles, and all-terrain vehicles.

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