Top 5 Vehicle Service Contracts Myths
Vehicle Service Contracts (VSCs) offer valuable protection for drivers in the event that their car requires serious repairs. However, there is a lot of confusion about what VSCs (also known as extended warranties) offer and how they work. Many companies deliver different coverages, premiums, and benefits. This leads to consumers not understanding the benefits of having a vehicle service contract. Read on to learn the top vehicle service contract myths.
Myth #1: Vehicle Service Contracts Are Just Another Warranty
Many people assume that a vehicle service contract is another title for a manufacturer’s warranty. However, these are not the same. A manufacturer’s warranty comes with the purchase of a new vehicle, covering specific repairs for a limited amount of time or up to a certain mileage limit. After that warranty ends, drivers pay for repair costs without any additional support. A VSC is an elective agreement between car owners and an administrator that covers specific mechanical repairs that may occur due to wear and tear from aging.
Myth #2: VSCs Aren’t Worth the Money
Some drivers look at a vehicle service contract and see a waste of resources. They feel underwhelmed by poor experiences with warranty providers in the past or have faith that their car will remain reliable well into the foreseeable future. However, even the most dependable vehicles are susceptible to issues. There is always a chance that unexpected issues or malfunctions occur.
As vehicles become more advanced and reliant on expensive technology, repair costs continue to rise. This means that specialized knowledge is required to fix even minor problems. Without a VSC, a single repair leaves a severe dent in your bank account. VSCs provide financial protection and peace of mind, knowing that you will be covered in a variety of bad scenarios.
Myth #3: You Can Buy VSC Coverage Anywhere
The best place to buy a vehicle service contract is the dealership where the vehicle was purchased. Dealerships are held to a higher standard of service by association with the manufacturer and want customers to keep returning. Dealerships value their ability to service customers and keep them returning.
When a consumer buys a vehicle, it makes sense to purchase a vehicle service contract from the dealership because they provide reputable, reliable contracts. These contracts often have the least amount of hassle and clearly outline coverages.
Many consumers receive robocalls and text messages about vehicle service contracts from third parties after purchasing a vehicle. The companies behind the messages may give the impression they represent a dealership or manufacturer – but actually have no association whatsoever. They use phrases like “Motor Vehicle Notification,” “Final Warranty Notice,” or “Notice of Interruption” to make the offer seem urgent — and to get consumers to respond.
These third-party companies:
- Aren’t working with your vehicle dealer or manufacturer and likely purchased your data from a credit reporting bureau
- Pressure customers to provide personal financial information and a down payment right away
- May not be in business when a customer needs to use their contract – it’s a high turnover business and not reliable
- Put limits and conditions on which repairs are covered, and who can provide the repairs
Myth #4: VSCs Cover Everything on the Vehicle
It’s important to recognize that vehicle service contracts do not cover every instance of car trouble. In reality, most VSCs cover the priciest internal components, and may include the engine, transmission, or electrical systems. Coverages depend on what plan the driver chooses. Additionally, many VSC’s include roadside assistance, rental reimbursement, and other benefits. Pre-existing conditions and neglect-related damage are not covered by VSCs. A car insurance policy is still needed to cover damage due to accidents. The combination of the two gives you total protection for your vehicle.
Myth #5: VSCs Are Only for New Cars
Owners of both new and used cars can purchase a vehicle service contract. A brand-new car owner will likely depend on the manufacturer warranty until it runs out and then purchase a vehicle service contract. Pre-owned vehicle drivers are great candidates for a VSC, as they are likely out of the factory warranty, heightening the risk of repair costs if any components break down.
The Bottom Line
Vehicle service contracts aren’t merely to serve as a backstop just in case something goes wrong with your car. VSCs are there to provide confidence that, when a mechanical breakdown happens on the road, you will have some level of assistance to minimize the financial impact of repairs. Misinterpretations of what VSCs can deliver only hurt the drivers who could use this support the most. No matter your current car situation, explore your vehicle service contract options to give yourself the protection you deserve.
Best Automotive Ads from the 2000s
Consumer, Dealership, Marketing, SalesThe best marketing lives in the memory of the public as creative pieces of art. Whether it’s through sincerity, comedy, or surrealism, great ads find a way to stick in your brain – and potentially change purchasing decisions. Throughout the 2000s, car companies used daring ideas to reshape car culture…