Table of Contents
Why Do I Need Vehicle Coverage?
Your vehicle will break down at some point. We’re sorry to be the bearer of that news, but it’s unfortunately true. For proof, look to car dealerships: even though their primary purpose is to sell cars, America’s dealerships alone made $68.89 billion in service and labor sales in 2022.
We reiterate: at some point, your car will stop working properly. When that happens, the primary way to rectify that is to pay for the repair. In that scenario, it’s car insurance versus a vehicle service contract for how you’ll cover that cost (unless you plan to pay out of pocket). Either way, you’ll need some form of protection plan in place if you don’t want to gouge your wallet every single time an expensive repair happens.
When it comes to a service that helps you recover from an automobile repair, the terms “insurance” and “extended vehicle protection” are likely to show up somewhere in your searches. However, unless you happen to know the difference between these two options (hey, you’re ahead of the game) or have learned the difference between these policy categories the hard way (sorry, friend), you’ll have to do a bit of research to find out which one you actually need.
We’d like to give you a head start. Here, we’ve got a quick and easy breakdown of what to expect from each type of vehicle coverage: vehicle insurance and extended vehicle protection.
What Is Car Insurance?
We’ll start with car insurance, since it’s more likely that you will be compelled to have it. Most states in the United States require drivers to insure their vehicles before they even start driving them. Insurance policies can be used alongside manufacturer warranties, extended warranties, or vehicle service contracts to make sure that more of your vehicle’s needs are covered.
Speaking of coverage, here are some of the things you may be able to expect your automotive insurance company to cover:
Bottom line: Vehicle insurance will help you out with unanticipated repairs NOT related to mechanical failure. Most plans do have stipulations, though, about what conditions your necessary repair must meet in order to be covered. Remember to fully read your policy paperwork so you know if there are any exceptions to what your plan will cover.
What Is a Vehicle Service Contract?
While car insurance covers vehicle damage resulting from an accident, a vehicle service contract will apply to repairs that resulted from mechanical failure. Just to be clear: a mechanical breakdown is when something stops working on your vehicle without being caused by a specific accident or disaster.
Since nothing lasts forever (least of all a vehicle used every day to carry us miles and miles over a variety of terrains), your vehicle is extremely likely to experience a mechanical failure. That said, you must have this protection plan in place before your car breaks down (otherwise your repair will not be covered).
Vehicle service contracts may cover the repair of the following components after a breakdown:
This is not an exhaustive list of what a vehicle service contract might include, of course, because not all plans cover the same components. CarShield offers a variety of plans and protection options that cover what you need. Call today to speak to one of our helpful customer care representatives who can outline how plans through CarShield can help you get back on the road after a mechanical breakdown.
Bottom Line: A vehicle service contract can be used alongside an insurance policy to make sure that your car runs regardless of what made it break down. If you have a manufacturer or an extended car warranty, however, a vehicle service contract may not be as effective. However, if you are deciding between an extended warranty and a plan through CarShield, then we’ve got you covered. Call the number at the top of this page today to get your free quote!
Main Differences Between Car Insurance and a Vehicle Service Contract
As we’ve previously mentioned, car insurance companies will cover accidental damage and a vehicle service contract will cover issues related to mechanical failure. All services for each of these coverage plans will operate under that rule of thumb.
In other words, let’s say your car is stuck on the side of the road and is completely undriveable. If your car has been rendered inoperable by an accident, then you must call insurance to tow your vehicle. However, if your vehicle hasn’t been in an accident, your insurance cannot help you. In the event that your vehicle stops working for another reason, your vehicle service contract will be your point of contact.
Aside from what each type of policy covers, there are some other key differences between car insurance and a vehicle service contract. Below, we’ve got a side-by-side comparison of answers to common questions regarding these forms of vehicle protection coverage.
Should You Have a Vehicle Service Contract if You Already Have Car Insurance?
You should have a vehicle service contract if you want something to cover the mechanical failures not typically covered by insurance plans. When you support your auto insurance with a vehicle service contract, you can be protected from bills for the automotive issues you both expect and don’t expect.
Differences in Repairs and Coverage
When was the last time you got into an accident? Chances are, as a responsible driver, you don’t get into accidents that often. In fact, there’s a chance you may never crash your car for as long as you own it. Mechanical failure, however, happens no matter how safely you drive. Therefore, since your car malfunction is more likely to be caused by mechanical failure instead of an accident, you are more likely to use a vehicle service contract than an insurance policy.