What is a Vehicle Service Contract?

An extended auto warranty is a service contract backed by an insurance company (administrator) that kicks in after a consumer’s initial warranty has expired and is intended to offset the costs of expensive vehicle repairs.

Here’s a good way to explain this to consumers:

This is NOT car insurance – car insurance will help vehicle owners in case they get into an accident.

Warranty Coverage (also an insurance-backed product) will help consumers with mechanical or electrical breakdowns.