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Media post: CarGuard Administration: Is a Vehicle Service Contract Worth It?

A lot of cars come with a limited warranty. But what happens when it expires? Would the drivers have to take care of any repairs and regular maintenance on their own?

Thankfully, that’s not always the case. The owner can choose to go for a vehicle service contract.

What are vehicle service contracts, and are they really worth it? Let’s find that out.

What Is a Vehicle Service Contract?

Car owners are never prepared for mechanical breakdowns and the repair costs that come with them. Of course, no one likes unexpected bills, and this is where a vehicle service contract takes center stage – a great option for those who value their peace of mind.

Basically, a vehicle service contract is a paid plan that steps in once the manufacturer’s warranty expires. At times, companies can even offer additional coverage that was never mentioned in the warranty.

Usually, third-party companies are the ones that offer vehicle service contracts. The vehicle manufacturer can have such an option as well.

When choosing the right contract, the number one rule is pretty simple – find a reputable company (like CarGuard Administration or Endurance, for example).

What Does a Vehicle Service Contract Cover?

Of course, reading the contract carefully before signing it is a must. Nobody would want to find out that a specific repair cannot be covered after it happens.

Some contracts include only mechanical breakdowns and do not cover the repairs that happen due to wear. However, some options cover both.

Usually, the contract would include a separate section that lists all the specific car parts that will be covered. Those can include the engine, drive axle, transmission, and so on.

Another informative part of a vehicle service contract is the list of repairs that the company will not cover. The absolute majority of companies do not help pay for any pre-existing problems.

The documents can vary a lot as they depend not only on the plan chosen but also on the model, the year, and the vehicle’s mileage.

As an option, there is The Protection Platinum Program from the CarGuard Administration. The vehicle parts that are covered by the plan include electrical components, cooling systems, steering, and many others.

Parts of the Contract that Might Require Extra Attention

The important thing to bear in mind is that not every center would be authorized to do the repairs if the vehicle is under a contract. Figuring out what exact repair centers are ok to use beforehand will make things a lot easier for owners.

Moreover, some contracts do not cover the breakdowns that happened while the driver was out of town. The programs might work only in a specific geographic area. So, the owners that tend to travel with their vehicles a lot should consider this part of the document.

Keeping these things in mind will help make a balanced decision that all parties will be happy with.

The Benefits of a Vehicle Service Contract

Being prepared for unexpected repairs

Not a lot of people are ready to pay hundreds or even thousands of dollars in one go. And this is precisely what may happen when an unexpected breakdown takes place. Fortunately, they are relatively rare, but it’s better to prepare oneself for the worst-case scenario than to regret not getting a contract later on.


It might seem strange to pay for something that a car owner might never need. But spending a reasonable amount of money on a regular basis (in most cases, once a year) is a more affordable option than losing a large sum due to a sudden breakdown.

Some are transferable

There are transferable contracts that will come in handy if the owner decides to sell his car in the future. This will, basically, help increase the resale value.

Not all contracts are transferable, but there are such options.

Some include bonuses

Some businesses offer additional bonuses to their vehicle service contract. The mentioned-before Platinum Protection Program includes roadside assistance, for example.

How Much Does a Vehicle Service Contract Cost?

Predictably, there is no one single price as the contract will depend on a wide range of factors.

The cost depends on:

  • Car condition
  • Model of the vehicle and year
  • Level of coverage
  • Length of the contract
  • Mileage
  • How ‘risky’ the vehicle is
  • Type of contract

The cost of the majority of vehicle service contracts per year can be anywhere between $300 and $700.

Every owner gets to decide for himself whether that’s the right financial decision or not.


Vehicle service contracts are an excellent option for people that like to be prepared for whatever the future holds. Moreover, finding the right contract might end up being an economically beneficial decision that will help not only not lose but also save money.

These reputable companies offer contracts suitable for different cases – CarGuard Administration, CARCHEX,Endurance.

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