Mama Bear Blog
Should I buy a Vehicle Service Contract (aka Extended Warranty)?
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Do I really need a Vehicle Service Contract (aka “extended warranty”)?
Our bottom-line: Vehicle Service Contracts (VSCs), sometimes incorrectly referred to as extended warranties, can be worthwhile, if you know what you’re buying and you get one at the right price.
Expected Ownership Period (In Years)
Buying a car is just the beginning: we own our cars for years.
So how does a vehicle service contract help?
VSCs eliminate two big risks:
First, the risk of costly surprises. A 2017 AAA survey found that 64 million Americans can’t afford an unexpected repair bill of $600 without going into debt. Meanwhile, a new transmission can run up to $2,500. With a vehicle service contract, that cost is taken care of.
The right Vehicle Service Contract levels the playing field. VSC companies are experts, so we can leave the details, negotiations, and payments to them.
With the right Vehicle Service Contract, you choose where you repair
Another important benefit of Vehicle Service Contracts? The right VSC will let you choose where to repair your car. There are ~1,500 reputable, qualified auto repair shops in the U.S., but VSCs bought at the dealership will often steer you to repair at that dealership only.
So for the inevitable repairs – the noise won’t stop, the car won’t start – a VSC bought from ‘outside’ the dealership can be a great idea. If you buy a high-quality plan at a fair price, you can plan ahead – and pay ahead – for repairs, and repair where you choose.
So why don’t more people buy Vehicle Service Contracts?
Most VSCs were sold the wrong way: in the dealership’s back office, at inflated prices.
Are vehicle service contracts worth it?
— or even worse —
Are “extended warranties” a scam?
A matter of trust.
Only 9% of us have a high level of trust in car salespeople. Maybe that’s why so many of us would never buy any extras from the dealership.
VSCs are great products, trapped in a bad reputation, for good reason.
Vehicle Service Contracts are worth it – if you buy them right.
At Outside Financial, we offer a better way to buy a VSC.
We vet VSC providers carefully, and only offer products we’d buy ourselves.
‘Go Outside’ for a Better Car Loan, and a Smarter Way to Own.
To learn more about VSCs, visit our VSC page.
Other VSC Resources
Links to Our Learn Section on VSCs
Links to our FAQs about VSCs
- Is a VSC the same thing as an extended warranty?
- Are VSCs a smart purchase? I’ve heard they’re a waste of money.
- Does a VSC cover everything?
- Can I buy a VSC for a used car?
- What maintenance do I need to perform to ensure my VSC is valid?
- If I sell my car, is my VSC transferable to the new owner?
- Can I cancel my VSC?