Thousands of drivers have peace of mind when it comes to car repair thanks to a car service contract. The average repair bill is $600 putting most Americans into debt.

Owners of both used and new vehicles such as the 4 best pickup trucks of 2018 can benefit from a service contract. A service contract can enhance the coverage of your manufacturer warranty.

Should you get a vehicle service contract? Keep reading for a guide to what a service contract covers.

What Is a Vehicle Service Contract?

Auto protection services are available to help auto owners with the expense of repair. GWC Warranty alone has awarded more the $3.5 billion in claims.

Most owners choose to buy this service when the manufacturer warranty runs out. The level of coverage varies based on the owner’s preferences and the vehicle covered. The coverage can include parts, tax, and labor.

What is Not Included

Repairs due to auto accidents are not usually covered. You have separate insurance for this.

Exclusionary Auto Service Contract

An exclusionary plan covers so many components that it is easier for the plan to state what it doesn’t cover. This type of plan can cover vehicles that have mileage as high as 150,000. This type of coverage mirrors what you would get from a major manufacturer.

Stated Component Auto Service Contract

With a stated component contract each part and system covered must be specifically stated. These are the only parts that will get covered by your plan.

This type of coverage is available for vehicles with mileage up to 200,000. You can also get 24/7 roadside assistance in the event of a breakdown.

Other coverage such as rental car, travel, and lodging can also provide extra protection. Other upgrades available are cover for navigation and high tech sensors.

New Vehicle Service Contracts

If you are buying a new vehicle you need a service contract for extra coverage over the manufacturer warranty. This extra coverage will last longer than the factory warranty.

Or if you want full coverage it can cover everything. This type of extended coverage will include mechanical and electrical components. The manufacturer warranty won’t usually cover these.

You can also customize the coverage for basic components. This coverage can even include any specialized electronic and audio components.

Used Car Service Contract

This coverage helps used vehicle owners cover their vehicle for unexpected repairs. This coverage takes over when the manufacturer’s warranty has run out.

A basic plan will start out with coverage of the main drivetrain components. You can upgrade your coverage so it covers everything the original manufacturer warranty covered.

Vehicle Service Contract Review

If you are buying a service contract for your vehicle, you need to decide what components you want to cover. If you want to cover specific components then a stated component contract may be right for you.

If you want wide sweeping coverage then an exclusionary plan will be better suited. Which one you choose may depend on whether you are buying a vehicle service contract for a new or used vehicle.

New vehicle coverage will mirror and extend that of the manufacturer warranty. Used vehicle owners can benefit from a service contract as their vehicle ages.

Help extend the life of your vehicle by following these 10 must know maintenance tips.