The Dos And Don’ts Of Purchasing A Vehicle Service Contract

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When shopping for a warranty, the most important factor is to be informed on your decision. Asking yourself and the warranty provider the right questions is a big part of making the right decision. In addition, knowing the ins and outs of a warranty and the different variations will take you a long way in choosing the best warranty for you from the right provider. You want to make sure you don’t jump the gun and buy from the dealership, because you will likely find a better deal in the future, and when you are finally ready to sign your name on the line for your vehicle service contract, make sure you read the fine print.

Let’s get into the specifics.

When Buying a Warranty You Should:

  • Ask the right questions
  • Know what a warranty is and what type is applicable to you
  • Make sure your vehicle isn’t already under warranty through the manufacturer
  • Understand how a warranty works
  • Identify what type of coverage you want
  • Shop around among warranty providers

When Buying a Warranty You Shouldn’t:

  • Buy the dealership warranty because you can get a better deal down the road
  • Fail to read the fine print

Asking The Right Questions

Be sure you know the answers to these questions before you sign:

  1. What mechanics are allowed to service your vehicle and make repairs under the warranty?
  2. How does the company pay for claims?
  3. How long is the contract?
  4. How is a warranty voided?
  5. Is there a cancellation window?
  6. What is the process of applying the deductible?

What Is An Extended Warranty

An extended warranty is a policy where you pay a monthly premium, similar to insurance and in return the cost of your mechanical breakdowns for your car’s most important parts are covered.

So, let’s say you’re driving down the road, and your transmission decides to just fall out of your car. This repair would cost thousands of dollars to make yourself, but if you have an extended warranty, instead of worrying about the say $2,000 it would cost to repair, your extended warranty will step in and pay the repair shop, minus any deductible. You pay a monthly premium, and any covered repairs are paid for.

It is quite straight forward. Consider an extended warranty to car insurance for mechanical failures. Car accidents happen every blue moon and sometimes if you are lucky, never. Car breakdowns tend to be more frequent and are eventually unavoidable. So why shouldn’t you be prepared if you are the type of person that likes to avoid financial surprises?

Most extended warranties cover just a few basic parts. This will include the engine, transmission, and other drive train systems like the transfer case and possibly your exhaust if you pick the right company. These tend to be the most expensive parts of your car to repair and replace and having one of them quit on you can result in a hefty repair bill. A more premium policy will offer more coverage.

Our supreme policy for instance not only covers expensive mechanical breakdowns, but also covers Hi-Tech electrical components such as EVP sensors, oil pressure sensors, and keyless entry locks.

Understanding Different Types Of Car Warranties

It is important to understand that there are two main types of warranties when it comes to your vehicle and they work differently when it comes to what is covered and how much they will cost you. The two main types of warranties are:

  • Extended Warranty
  • New Car or Manufacturer Warranty

What Is A Manufacturer Warranty Or New Car Warranty?

A manufacturer warranty comes standard with most new cars regardless of the brand you decide to purchase. For example, the manufacturer’s warranty from Ford Motor Company is for 3 years or 36,000 miles. This warranty automatically comes included in the price of your purchase of a new Ford vehicle so you don’t make monthly payments. You also won’t have a deductible, the entire policy is covered by the manufacturer of the vehicle.

You should also know that most manufacturer warranties are implied warranties, meaning that there is no contract and no fine print to read. That makes it especially important to ask the questions on how the warranty is fulfilled and how it can be voided. Implied warranties are still legally binding, but in some cases the dealership may fight you on covering the repairs.

The implied manufacturer warranty will typically be considered a “bumper to bumper” (sometimes called “limited”) warranty meaning the entire vehicle will be covered with the exception of wear and tear items like tires. This is the manufacturers way of saying “we stand behind the vehicle we produced and you should have no issues with it within a certain time frame”. If you do, repairs are on them because it was likely a manufacturing error that caused the issue in the first place.

There are typically several warranties within your new car warranty. They are:

Powertrain WarrantyA powertrain warranty from manufacturers typically covers: engine, axles, transmission, transfer case, drive shafts, all wheel drive, rear wheel drive, front rear drive and differentials. 

These also tend to be the most expensive parts on your car. Transmission replacement can cost upwards of $3000 to repair or replace.
Corrosion WarrantyA corrosion warranty covers perforation of the body panels of your vehicle. It essentially covers any rust that may form on your car
Safety Restraint WarrantyThe safety features on your vehicle may also be covered under your manufacturer warranty. This includes the safety components such as airbags, seat belts or safety restraint system (SRS).

How Long Do Manufacturer Warranties Last?

If you are lucky, some manufacturer warranties will cover up to 10 years or 100,000 miles. The exact warranty coverage will vary from brand to brand, so it’s important to understand the warranty. Check out this chart of the length and mileage of most manufacturer warranties.

ManufacturerWarranty Period (2018 or newer)Notes
Acura6 years or 70,000 miles 
Audi4 years or 50,000 milesNo specific powertrain warranty, only new vehicle limited warranty.
BMW4 years or 50,000 milesNo specific powertrain warranty, only a new vehicle limited warranty.
Buick6 years or 70,000 milesFor all model years 2013 or newer.
Cadillac6 years or 70,000 milesFor all model years 2013 or newer.
Chevrolet5 years or 60,000 miles 
Chrysler5 years or 60,000 miles 
Dodge5 years or 60,000 miles 
Ford5 years or 60,000 miles 
GMC5 years or 60,000 miles 
Honda5 years or 60,000 miles 
Hyundai10 years or 100,000 miles 
Infiniti7 years or 70,000 miles 
Jaguar5 years or 60,000 milesNo specific powertrain warranty, only a new vehicle limited warranty.
Jeep5 years or 60,000 miles 
Kia10 years or 100,000 miles 
Lexus6 years or 70,000 miles 
Mazda5 years or 60,000 miles 
Mercedes-Benz4 years or 50,000 milesNo specific powertrain warranty, only a new vehicle limited warranty.
Mitsubishi10 years or 100,000 miles 
Nissan5 years or 60,000 miles 
Ram        5 years or 100,000 miles (diesel)     5 years or 60,000 miles (gas) 
Subaru5 years or 60,000 miles 
Suzuki7 years or 100,000 miles 
Tesla8 years or 100,000-125,000 milesNo powertrain warranty, only a new vehicle limited warranty. Length of coverage depends on model purchased.
Toyota6 years or 60,000 miles 
Volkswagen6 years or 72,000 milesNo powertrain warranty, only a new vehicle limited warranty
Volvo4 years or 50,000 miles 

What Is An Extended Warranty or Vehicle Service Contract?

Extended warranties come after the dealership or manufacturer warranty is up. Many car owners choose to purchase a 3rd party extended warranty at this time to help them cover the cost of their unforeseen repairs. A car can break down at any time, even one that has been maintained appropriately. Extended warranties help people avoid going into debt over these car repairs.

Similar to insurance, with an extended warranty you will pay a monthly premium. When your car breaks down, you pay a small deductible of $100 to $400 depending on your warranty provider and they cover the rest.

How Does A Warranty Work

A warranty works similarly to car insurance, you pay monthly for a policy that you use to make a claim if something bad happens. A warranty is essentially insurance, but for mechanical breaks instead of accident damage or other unforeseen circumstantial damage like that caused by fire or hail.

A vehicle service contract from Protect My Car covers major repairs where insurance falls short.

Imagine your morning commute to work when suddenly your engine blows out and you find yourself stranded on the side of the road . A repair of this nature could cost you well over $5,000 and upwards of $10,000 without a warranty.

With a warranty, when unexpected repairs like these take place you simply have to pay your deductible (similar to insurance) and your warranty provider will take car of the rest.

So instead of that $5,000 cost of replacing your engine, if you have a contract with Protect My Car, those same repairs may only cost you $100 and depending on your policy, you might even qualify for some highly rated road side assistance at no additional cost.

How To Know If An Extended Warranty Is Right For You

The truth is, not everyone needs an extended car warranty. Like everything else in this world other than breathing and consuming enough food to stay alive, there are different strokes for different folks. For some individuals, a warranty is a beautiful thing because it decreases the stress and anxiety of unexpected repairs. For others, who don’t worry as much about unexpected repairs and who work on their cars themselves a warranty makes less sense.

Here is who should and shouldn’t buy an extended warranty from PMC or one of the other reputable warranty brands in the market.

Who Shouldn’t Get An Extended Car Warranty

  1. Have a car with fewer than 36,000 miles that is less than 5 years old.
  2. Have a car that was made before 2000.
  3. Don’t drive that often.
  4. Do your own car repairs.
  5. Aren’t worried about your check engine light.
  6. Have a plan to pay for costly repairs when they happen.

Who Should Get An Extended Car Warranty

  1. Have over 36,000 miles on your car.
  2. Drive a car that’s the year 2000 or newer.
  3. Want to protect your used car investment.
  4. Don’t want to worry about your check engine light.
  5. Are afraid of getting taken advantage of by your mechanic.
  6. Don’t want to pay thousands of dollars for breakdowns that aren’t your fault.
  7. Want the peace of mind to keep your car even as the miles climb.

So Is It Worth Taking Out A Car Warranty?

A car warranty is worth it to some consumers, such as those who struggle financially or mentally with surprise bills. If you are the type of person who doesn’t know how you would pay for a $2,000 transmission repair, or who would have a panic attack taking that money out of your savings account, a warranty could totally be worth considering for the peace of mind. In other cases where the individual is comfortable footing the bill for egregiously expensive car repair bills from time to time a car warranty may be less valuable. If you have a newer car or one that is extremely valuable and

Can You Buy A Warranty At Any Time?

YES! You can buy an extended warranty through a third party company like Protect My Car or from the dealership at any time! Don’t get sucked into snatching up the first warranty offered to you at the time of car purchase, make sure you do your research because there are a ton of excellent options out there and you can tailor most plans and their coverage (as well as their cost) to fit your needs.

While you don’t have to buy a dealership warranty then and there while buying a vehicle, the one “benefit” of doing so comes if you’re financing your vehicle purchase. In these cases, purchasing a warranty at the time of vehicle sale can roll the entire cost of the warranty into your loan, so you only have to worry about making your car payment and not a separate warranty payment. Keep in mind that you will be paying interest on this money and you may end up saving a lot by waiting and buying a separate extended warranty

If you are wondering why the word benefit is in quotes, keep reading.

4 Reasons Why Buying A Warranty Same Day From The Dealership Is A Bad Choice

There are a few reasons you should wait to buy a warranty when offered one at the time of sale:

  1. You are likely feeling rushed, tired, and overwhelmed by the dealership and stress of buying a car
  2. You aren’t evaluating the competitors
  3. You may end up paying interest on your warranty if it is rolled into the price of your vehicle when financing a car
  4. Car sales people may talk you into a bigger warranty than what you need

What Does A Basic Warranty Cover?

Most extended warranties cover a few basic parts. This will include the engine, transmission, and other drive train systems like the transfer case and possibly your exhaust if you pick the right company. These tend to be the most expensive parts of your car to repair and replace and having one of them quit on you can result in a hefty repair bill. A more premium policy will offer more coverage.

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Evaluating Warranty Choices

You didn’t buy a car without weighing what your options were and comparing them, so why would you buy coverage on repairs for that vehicle in any other way? There are quite a few options for extended car warranties. Top providers for warranties include:

  1. Protect My Car
  2. Endurance
  3. Carchex
  4. Car Shield

What You Should Compare Between These Warranties

  1. Where repairs made are authorized
  2. How much the deductible is in the event of a repair
  3. What the monthly premium is
  4. Any additional costs (read the fine print!)
  5. Policy length
  6. What parts of the vehicle are covered under the warranty
  7. What parts of the vehicle are excluded by the company

Top Extended Warranty Providers Compared

 Protect My CarEndurance Auto WarrantyCarchexCar Shield
Cost Per Month$70.56/ month$89/month at promotional price     $122.00/ month otherwise$198.56/ month$129.99/ month
Deductible$100 dollars$100 dollars$100 dollars$100 dollars
Additional ChargesNone$200-dollar admin fee, 5% due at signing (promotional), or 10%NoneNone
Policy Term4 Years / 60,000 Miles5 years / 60,000 miles6 years / 125,000 milesMonth to month
CoverageEngine, Transmission, Drive Axle, Transfer Case, Brake Components, Steering, Electrical Components, Air Conditioning, Front and Rear Suspension, Fuel System, Cooling SystemEngine, Transmission, Drive Axle, Transfer Case, Brake Components, Steering, Electrical Components, Air Conditioning, Front and Rear Suspension, Fuel System, Cooling SystemEngine, Transmission, Drive Axle, Transfer Case, Brake Components, Steering, Electrical Components, Air Conditioning, Front and Rear Suspension, Fuel System, Cooling SystemEngine, Transmission, Axle Steering, AC Components, Steering, Electrical Components, Air Conditioning, Front and Rear Suspension, Fuel System, Cooling System
Major ExclusionsWear and tear items*Wear and tear items*Wear and tear items*Wear and tear items*

Prices Of Top Warranty Providers In Their First Year

Company1st Year Contract Cost
Protect My Car$846.72
Endurance Auto Warranty$1068 with promotion, $1464 without, plus $200-dollar administrative fee due at signing.
Car Shield$1559.88
Carchex$2382.72

Reading The Fine Print

With any legally binding document, it is important to read all of the legal mumbo jumbo because there can be surprises buried in the mountain of paperwork. Sure, it is easier in the moment to scroll through the contract haphazardly, but you could end up saving yourself a lot of frustration and money by simply taking the time upfront to read and understand what you are obligated to do.

In the cases of some warranty companies, there are hidden fees tucked away in the fine print that you will get billed for whether you are aware of them or not. For example, Endurance Auto Warranty has a $200 dollar administrative fee when you sign up tacked onto the cost of the warranty! You want to avoid falling into this trap and you can do so by reading the contract thoroughly.

Extended Warranty Tips

Put Your Maintenance On A Schedule

Make sure you set up your recommended maintenance to be completed on a schedule. Failing to properly maintain your vehicle is grounds for having your warranty voided. Make sure you keep proof of any and all maintenance work, even if you do it yourself! Keep receipts and any invoices you get from a mechanic.

You Don’t Have To Have A Warranty To Finance A Car

Know that you are not required to buy a warranty to qualify for financing on a vehicle purchase! Some dealerships may lead you to believe that you are required to buy a warranty if you aren’t buying a car outright but the Federal Trade Commission states in most cases tis isn’t true. Call your lender and verify within your contract if you are legally obligated to put a warranty on the vehicle. In most cases you will need a comprehensive insurance policy but not a warranty and many people don’t understand the difference. If you want to understand the difference between a warranty and insurance further check out our Guide To How Warranties Differ From Insurance. Be sure to report any shady business practices or high pressure sales tactics to the FTC.

Never Get Yourself Into Debt Over Car Repairs Again By Choosing Protect My Car

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Car repairs can be absurdly expensive, and you can expect those unexpected repairs before too long no matter what vehicle you drive.  Car repairs are an unfortunate part of owning and operating a vehicle. Eventually something is going to break and wow can it be expensive to replace and repair these parts.

If you have to replace the engine block it could cost you more than $10,000 depending on the make and model of your vehicle. Most people don’t have a spare ten grand lying around in their bank accounts, or even an extra $2,500 if their transmission blows.

The cost of repairs will depend on your vehicle, but it can cost you thousands of dollars to make repairs to components like the transmission and suspension, which is money most Americans don’t have.

If that cost seems absurd to you, luckily you aren’t alone. We’re on a mission to make car repairs more affordable to the every day working person. With Protect My Car, you don’t have to hold your breath every time that check engine light comes on. Protect My Car is basically an insurance policy for the mechanical features in your car. If your car breaks down when you have a policy with us you pay a deductible for covered expenses and we take care of getting the car repaired and covering the cost.

A vehicle service contract from Protect My Car can help cover the cost of these excessive repairs. In fact, you could pay as little as $100 dollars for that $5,000 engine replacement.

Yes, you heard that right.

For less that the cost of a cup of coffee each day, you can get coverage for:

  • Steering
  • Suspension
  • Engine
  • Transmission
  • A/C and Heating
  • Navigation and Electronics
  • …and so much more.

When you walk into the repair shop with a coverage plan from PMC, you can rest assured that you will never pay for these repairs listed here. You pay a $100 deductible, just like insurance and we pay the rest.

Does that sound like a fair deal to you?

If it does, just fill out the form below for a free quote, and see how great it can be to never have to pay for car repairs ever again. It couldn’t be more simple to get a quote from us and you could find yourself saving thousands of dollars per year on car repairs. Below this diagram you will find a button “click for a free quote” from there you can call us or simply get a hassle free quote online.

Protect My Car offers multiple levels of extended coverage for vehicles. The chart below outlines what those levels cover and how much the deductible will cost.

About Protect My Car

Protect My Car is an extended auto warranty company. Our goal here at Protect My Car is to eliminate your worry of being financially responsible for an expensive mechanical breakdown. With our extended auto warranty, you don’t have to worry about being fully burdened with the cost of a covered repair.

Want to protect your vehicle?

Or give us a call at 1-800-253-2850