Do You Need a Vehicle Service Contract?

A vehicle service contract pays for unexpected mechanical repairs and failures. Shutterstock

You’ve just spent hours looking at new cars and negotiating for the one you want to purchase. Now, it’s time for the paperwork and questions. One of the many questions you’ll have is whether to purchase a vehicle service contract, an extended auto warranty.

If it’s a new or certified pre-owned car, there’s a manufacturer’s warranty. The vehicle service contract fills in the gaps and extends the warranty. But what are the vehicle service contract coverages, and how do they work? Are they worth it?

Vehicle Service Contract

According to a MarketWatch survey, more than 36 percent of Americans cannot afford more than $500 in unexpected car repairs. A vehicle service contract pays for unexpected mechanical repairs and failures.