The Cost of Not Having Mechanical Vehicle Protection
Drivers are keeping their vehicles longer than ever before – in the United States, the average age of vehicles on the road has reached a record high of 12.6 years. This trend stresses an unavoidable reality: maintaining a vehicle’s health to ensure reliable transportation is more important than ever.
Keeping an older vehicle running smoothly is sometimes challenging, and the older the vehicle gets, the more likelihood there is of a mechanical breakdown. That’s why mechanical vehicle protection is so important.
The Economy and Automotive
The automotive industry isn’t immune to economic tides. Rising costs of parts and labor are a constant challenge for vehicle owners. For example, fixing a major component, such as an engine or transmission, can cost thousands of dollars.
One unexpected repair bill can leave vehicle owners scrambling to cover the costs and lead many to question whether to repair their vehicles. A vehicle is a lifeline to work for many drivers, and they need reliable ways to make repairs when a breakdown happens. According to one recent article, 33% of American has $100 or less in their savings account – not nearly enough to cover repairs or replacement parts.
The very technologies that make vehicles more efficient and functional also contribute to complex repairs. Modern vehicles that rely on advanced computer systems and components require mechanics with the latest training and tools to diagnose and fix problems.
For example, a simple sensor malfunction can snowball into an expensive ordeal due to the diagnostic tools and processes needed. The cost of training dealership personnel and maintaining specialized equipment all contribute to the rising repair costs vehicle owners face.
The Parts Problem
Supply chain disruptions haven’t spared the automotive parts industry. Limited availability of essential vehicle components can result in inflated prices for everything from brake pads to catalytic converters. This scarcity also creates an opportunity for counterfeit parts to enter the market, which poses safety risks that may compromise a vehicle’s performance.
Part Name |
Cost |
| Engine and Cylinders | $7,000 to $10,000 |
| Hybrid Car Battery | $6,000 |
| Transmission | $4,000 to $5,000 |
| Airbags | $2,500 to $4,000 |
| Suspension | $2,500 to $3,500 |
| Camshaft | $1,500 to $3,000 |
| Head Gasket | $2,000 |
| Catalytic Converter | $1,500 |
| Brake Line | $1,000 |
| Air Conditioner Compressor | $500 |
Source – Ten of the Most Expensive Car Repairs
Rising Labor Rates
The cost of repairs isn’t just about parts – mechanics play a key role, and their labor rates vary greatly. Location, experience, and shop type all influence the final bill. The demand for skilled mechanics is projected to rise, which may lead to even higher charges in the future. One report states that the industry will be short by 642,000 workers in 2024. The cost for repairs including labor are 164.96% higher than in 1997. Vehicle owners face a financial labyrinth without a plan to manage these unforeseen expenses.
Shop Type |
Hourly Cost |
State |
| Independent | $120 | Texas |
| Independent European Model Specialist | $153 | Michigan |
| Domestic & Asian Make Vehicles | $297 | California |
| Fleet Service Provider | $125 | Washington |
| Transmission Shop | $140 | California |
Source –An Example of Labor Shop Rates (2023)
How VSC’s Offer Vehicle Protection
Vehicle owners need a way to retain their vehicles as long as possible and help to cover the costs of mechanical repairs that are due to long-term use. The rising costs of parts and labor can put the average American in a financial bind. Dealerships who offer vehicle service contracts to their customers are providing a shield against these issues.
Depending on the specific contract, it can cover various components from the engine and transmission to electrical systems and air conditioning. This translates to peace of mind for vehicle owners as they can budget for maintenance without the constant fear of a surprise repair bill derailing their finances.
Drivers who have a VSC through a dealership will also have the benefit of using the dealership’s service drive. A dealership is the best place to have maintenance performed on a vehicle because the employees are trained to work specifically on those vehicles. It’s also where OEM manufactured parts are easily available.
Another great aspect is that many vehicle service contract administrators work with dealerships to offer multiple coverage levels that allow buyers to choose a plan that best suits their needs and budget. An increase in the cost of vehicle repairs, parts, and labor paints a clear picture: lacking VSC coverage can be risky. In the long run, investing in a vehicle service contract is a cost-saving strategy that can lead to long-term savings.
Without mechanical vehicle protection, vehicle owners face the full cost of repairs out of pocket. It can be particularly daunting for older vehicles that are more prone to mechanical failures. A vehicle service contract allows customers to budget more effectively and avoid unexpected financial strain. Regular maintenance covered by these contracts can also extend the vehicle’s lifespan and make sure it remains reliable for many years.
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The Difference Between a Warranty and a Vehicle Service Contract
Dealership, Marketing, Parts and Service, Sales, Service DriveWhether you’re thinking about buying a new vehicle or simply extending protection on your existing car, manufacturer’s warranties and vehicle service contracts may be fresh on your mind. While both services can be helpful, it’s crucial to understand the key differences between the two options.