This is a question we’re asked over and over again. Though they both provide automobile coverage, there are several key differences that some folks may not be aware of. We’re hoping this clears up the confusion once and for all.

A warranty is coverage issued at the time of purchase by the manufacturer and is included in the price of the automobile. It covers any damage, repairs or replacements needed for the vehicle through a certain date or mileage, after which it expires.

A vehicle service contract, commonly referred to as an “extended warranty,” is designed to take over once the manufacturer coverage expires. A vehicle service contract can be purchased when buying a used car from a dealer or later after the purchase from a third-party company—it’s important to note, however, that even if you buy from a dealer, the contract is actually “backed” by a third-party company that is unaffiliated with the dealer or manufacturer, so be sure to ask the dealer who is backing the contract to ensure they are reputable. Like health insurance, vehicle service contracts are designed to protect against unforeseen breakdowns and can help you protect your family’s budget with monthly payments.

Other key differences to note:

• Many service contracts are great for protecting older automobiles, whereas warranties are intended to cover new or certified pre-owned vehicles.
• Depending on the contract limitations, a service contract may allow for more freedom in choosing an auto repair shop, whereas a warranty often restricts repair services to the dealer.
• When purchasing a vehicle service contract, the customer can choose from different types of coverage to fit their specific automotive and budget needs, whereas you can’t pick and choose your warranty coverage to suit your situation.

Protection Direct offers a range of comprehensive and diverse service contracts designed with your car (and budget) in mind.

Buying an auto service contract is essentially making an investment. It’s safe to assume at some point your vehicle will require some significant and costly repairs. And when the time comes, will you be prepared?

Our service contracts are designed to save you thousands of dollars in auto repairs and at the very least offer peace of mind at a low monthly cost. These monthly payments become a consistent and manageable part of your budget, as opposed to writing out a large check unexpectedly when something breaks down. Additionally, without coverage, you may be tempted to put off certain repairs due to the cost, which could then cause even more problems down the line.

Protection Direct offers many different contract options to fit your budget and the level of protection you need. Read each contract carefully to make sure you understand what’s covered and what’s not to avoid confusion down the road.

Always keep in mind:

• Most service contracts require some general maintenance agreement, so make sure you read your contract and understand what your maintenance requirements are.
• Service contracts do not generally cover the normal wear and tear of everyday driving. The purpose of these contracts is to plan for unforeseen, major malfunctions.
• Many service contracts also have roadside assistance or towing benefits included to help offset costs associated with a breakdown. So if that is something you think you’ll need, ask for a plan that includes that coverage.