Vehicle protection plans are contracts between drivers and warranty administrators. These protection plans aren’t required after a vehicle’s factory warranty, but they protect your budget and your vehicle from the shock of sudden mechanical breakdowns.
Choosing the right vehicle protection plan involves a little research. According to Michael Chung, senior director of market intelligence for the Auto Care Association, it pays to ask questions when searching for the best extended car warranty company to work with.
You can purchase coverage plans directly from vehicle manufacturers, dealerships or dedicated third-party providers. Some companies are direct administrators of vehicle service contracts, while others provide access to contracts offered by other administrators.
What does a vehicle protection plan cover?
The coverage level that a vehicle protection plan provides can vary by company and contract type. The two types of vehicle protection plans are stated-component coverage and exclusionary coverage, and each works a little differently.
With stated-component contracts, you receive coverage for all parts and repairs specifically listed in the contract. With exclusionary plans, you receive coverage for all parts and repairs except those listed in the contract.
Many extended warranty providers offer one level of exclusionary coverage and a few tiers of stated-component coverage. Your coverage options might include the following:
- Exclusionary protection plans: This level of vehicle protection plan typically offers the most comprehensive coverage available. Exclusionary plans function like bumper-to-bumper warranties and include all parts and repairs covered by midlevel and powertrain warranties, plus extra coverages for systems such as brakes, suspension, fuel delivery and electrical. A small list of exclusions is included in every contract.
- Midlevel protection plans: Midlevel warranty coverage is stated-component coverage that expands on powertrain coverage. Covered systems typically include the engine, transmission and drivetrain. Additional coverages often include air conditioning systems, electrical components and fuel injection.
- Powertrain protection plans: Powertrain warranties provide the most basic level of stated-component coverage for select parts and repairs in the engine, transmission and drivetrain.
Vehicle protection plan perks
Most companies include a few standard perks with their vehicle protection plans. The most common perk is roadside assistance, which typically includes towing, lockout assistance, fuel delivery, battery jumpstarts and flat tire assistance. However, some contracts also include rental car reimbursement and trip interruption coverage in the event of covered vehicle repairs.
Vehicle protection plan exclusions
Even the best exclusionary plans won’t cover routine maintenance and vehicle upkeep. In fact, to keep from voiding your warranty coverage, you’ll need to complete oil changes, filter changes, tire rotations and other maintenance that your vehicle manufacturer recommends. You’ll also need to pay out of pocket for replacement brake pads, windshield wiper blades and light bulbs.
In addition to maintenance, vehicle protection plans won’t offer coverage for select types of vehicle damage, including the following:
- Cosmetic damage to body panels or upholstery
- Damage to vehicle window glass
- Damage from vehicle misuse
- Damage caused to covered parts by noncovered parts
- Damage caused by aftermarket parts
- Accident or collision damage
- Severe weather damage
How do vehicle protection plans work?
As long as you know which parts and repairs your plan does and does not cover, vehicle protection plans are relatively straightforward. After any applicable waiting period, you can reach out to your plan’s administrator to file a claim for a covered repair.
How do you file a vehicle protection plan claim?
Filing a claim with most vehicle protection plans is simple. You’ll reach out to your warranty administrator about a covered repair, get prior approval and either drive or have your vehicle towed to a designated repair facility. From there, you’ll provide your mechanic with your plan information, and your warranty provider will pay the mechanic directly.
Many extended car warranty companies work with outside warranty administrators to back contracts. This means you’ll typically want to contact the contract administrator to file a claim, not the company that sold you the contract. However, some providers — such as Endurance — are direct providers, meaning they’ll handle any claims in-house.
Do vehicle protection plans have a waiting period?
Most vehicle protection plans include a waiting period of around 30 days and 1,000 miles. Until this period is met, the company won’t pay out for any claims, even those listed as covered. Extended warranty companies use these waiting periods to prevent drivers from seeking coverage for preexisting issues.
Can you cancel your vehicle protection plan?
You can usually cancel your vehicle protection coverage at any time. However, if you’d like a refund, you may need to request one within 30 days of purchasing your coverage. Many companies offer a 30-day money-back guarantee with either a full or prorated refund. Be sure to check any company’s refund and cancellation policies before committing to a contract.
How much does a vehicle protection plan cost?
On average, you can expect to pay around $848 per year of coverage for an extended warranty. This average includes down payments and all monthly payments, but the amount could fluctuate for several reasons. The final price tag on a vehicle protection plan varies based on the provider, plan type and the vehicle’s make, model, year and mileage.
Do vehicle protection plans have deductibles?
Vehicle protection plans typically carry deductibles that must be paid for claims to be covered. Typical deductibles range from $0 or vanishing to $200.
Are vehicle protection plans worth it?
If you’re driving a new car, you may not need additional coverage until your manufacturer warranty expires. However, if you want to get the most life out of your used car without putting your budget at risk, a vehicle protection plan may be the right choice for you.
As your vehicle ages, repair costs and frequencies increase. Extended warranties offer customizable coverage with monthly and long-term contract options for drivers from all walks of life. Like all warranties, extended auto warranties have benefits and drawbacks such as the following:
Pros | Cons |
---|---|
Can increase the resale value of cars and trucks | May not need all of the coverage included |
Predictable monthly payments instead of sudden expensive repairs | Repair options are limited to shops approved by the warranty administrator |
Perks such as roadside assistance and rental reimbursement | Won’t cover cosmetic damages or damages from severe weather |
How to choose the right vehicle protection plan
You can find the best coverage for your vehicle and budget by following a few guidelines when shopping:
- Vet companies carefully: Always check a company’s Better Business Bureau score, customer reviews and other details before signing a contract.
- Compare plans from a few providers: Always compare similar coverage types from different providers. If you want a complete picture of your options, ask for quotes and sample contracts for different coverage levels as well.
- Read the fine print: Never commit to a warranty contract without thoroughly reviewing the contract terms. You’ll want to pay special attention to all excluded car repairs, actions that may void your warranty coverage and the contract’s term limits.
- Ask about cancellation and refunds: We also recommend familiarizing yourself with the company’s cancellation policy before committing to a contract, just in case your coverage needs to change down the line.
What’s next?
If you’re interested in additional protection for your car or truck, vehicle protection plans offer peace of mind through customizable coverage levels and monthly or long-term contracts. Not every company offers the same coverage levels, and prices will vary by provider, so it pays to shop around.
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