What is a Vehicle Service Contract (VSC)?
A Vehicle Service Contract (VSC) is a service agreement that covers the cost of certain mechanical repairs and breakdowns after your factory warranty expires—it's often called an "extended warranty," but legally only the vehicle manufacturer can offer a true warranty.
What is a VSC?
A Vehicle Service Contract (VSC) is an agreement between you and a third-party provider that covers the cost of specific mechanical repairs if your vehicle breaks down. Think of it as financial protection against unexpected repair bills—if a covered component fails, the provider pays for the repair (minus your deductible).
Common names for VSCs:
- Extended warranty (most common, though not technically accurate)
- Extended car warranty
- Auto protection plan
- Mechanical breakdown protection
While these terms are used interchangeably in everyday conversation, there's an important legal distinction to understand.
VSC vs. Warranty: What's the difference?
A warranty can only be provided by the original equipment manufacturer (OEM)—the company that built your vehicle (Ford, Toyota, Honda, etc.). Only manufacturers can offer true "extended warranties."
A Vehicle Service Contract is provided by a third-party company, not the manufacturer.
Why this matters: For years, dealerships and call centers marketed VSCs as "extended warranties," creating confusion. Unless you're buying directly from the vehicle manufacturer, you're getting a VSC. This doesn't make VSCs any less valuable—it's just important to understand what you're actually buying.
On Chaiz, all plans are Vehicle Service Contracts from verified third-party providers, and we're transparent about that.
VSC vs. Auto Insurance
VSCs and auto insurance serve completely different purposes:
Auto Insurance covers:
- Accidents and collisions
- Theft and vandalism
- Liability for injuries or damage you cause
- Comprehensive damage (weather, animals, etc.)
VSCs cover:
- Mechanical breakdowns and component failures
- Covered parts like engine, transmission, A/C, electrical systems
- Roadside assistance (most plans)
- Rental car reimbursement (most plans)
Bottom line: Insurance protects you from accidents. A VSC protects you from things breaking down. You need both—insurance is legally required in 49 states, and a VSC gives you financial protection against expensive repairs.
VSC vs. Factory Warranty
Factory Warranty:
- Comes free with new vehicles from the manufacturer
- Typically 3 years/36,000 miles (bumper-to-bumper) and 5 years/60,000 miles (powertrain)
- Expires after set time/mileage
- Covers manufacturing defects
Vehicle Service Contract:
- Purchased separately at any time (within eligibility, typically up to 250k miles/20 years old on chaiz.com, depending on your car.)
- Available after factory warranty expires
- Covers mechanical breakdowns, not just defects
- Various coverage levels (Basic, Basic Plus, Best) Find out more about coverage levels
- Customizable with add-ons
What does a VSC cover?
Coverage depends on the plan level:
- Basic plans cover drivetrain (engine, transmission, drive axle)
- Basic Plus plans cover drivetrain plus additional systems
- Best plans cover nearly all mechanical and electrical components
Every plan is different. To understand what's covered:
- Review the Chaiz Expert Review for coverage strength [link to Article 18]
- Download and read the full contract before purchasing
[Learn more about coverage levels](link to Article 3B)
What VSCs do NOT cover
VSCs do not cover:
- ⚠️ Pre-existing conditions (problems that existed before purchase of the VSC)
- Regular maintenance (oil changes, brake pads, tire rotations)
- Wear-and-tear items (wiper blades, light bulbs)
- Accidents or collision damage (use insurance)
- Recalls or manufacturer defects
- Damage from lack of maintenance or neglect
How does a VSC work?
Here's the process when you need a repair (generally - please consult your specific contract to ensure you follow the correct procedure):
- Your vehicle breaks down
- Take it to a licensed repair shop (any ASE-certified shop)
- Shop contacts your VSC provider for authorization
- Provider approves covered repairs (usually within hours)
- Provider pays shop directly for covered repairs
- You pay only your deductible (typically $100) and non-covered items
[Learn more about filing a claim](link to Article 8)
Common misconceptions
"I thought this covers everything"
It doesn't. Every VSC has exclusions. We know contracts can be lengthy and technical, but understanding what's covered helps avoid surprises later.
On Chaiz, we make this easier by breaking down coverage in Expert Reviews and highlighting key contract details. However, while these and our simplified plan details page help you understand your purchase—they don't replace reading the actual contractm which you can study onw your own already before purchasing AND during the 30-day money-back period.
"All VSCs are the same"
They're not. Coverage, pricing, deductibles, and benefits vary significantly. That's why Chaiz exists—to help you compare and find the right plan for you speficic needs.
Why buy a VSC?
Why buy a VSC?
Financial protection:
Modern vehicles are complex. A transmission replacement can cost $4,000-$8,000. An engine replacement can exceed $7,000. Even smaller repairs like A/C compressors run $800-$1,500. A VSC helps you avoid these unexpected costs.
Predictable budgeting:
For many people, knowing they'll pay a fixed amount each month (typically $50-$150) provides significant stress relief. Instead of worrying about a surprise $3,000 repair bill, you have a predictable monthly payment. This is especially valuable with current economic uncertainty—tariffs and supply chain issues are driving up parts prices, but your VSC locks in coverage at today's rates.
Cars are essential in America:
Recent research from the U.S. Treasury shows that Americans prioritize car payments over mortgage payments, highlighting how dependent we are on our vehicles. For most people, breaking down isn't just inconvenient—it means missing work, appointments, and daily responsibilities. A VSC ensures you can get back on the road quickly without financial strain.
Peace of mind:
Drive knowing that if something breaks, you're covered—no scrambling to find thousands for an emergency repair.
Additional benefits:
Most VSCs include:
- Roadside assistance (towing, jump starts, lockout service)
- Rental car reimbursement during repairs
- Trip interruption coverage if you break down far from home
Customization:
Add coverage for specific needs like commercial/rideshare use, lift kits, or luxury electronics.
Is a VSC worth it?
Ask yourself: "Can I afford a $1,000-$5,000 repair today without financial stress?"
If the answer is no, a VSC is probably worth it. Even with savings, a VSC locks in predictable monthly costs instead of surprise bills.
Consider:
- Vehicle age/mileage – Older, higher-mileage vehicles need more repairs
- Your budget – VSCs typically cost $50-$150/month, but prices vary widely between providers
- How long you'll keep it – Longer ownership = more value from coverage
- Rising repair costs – Labor and parts costs increase every year
- Price comparison is essential – The same coverage can cost dramatically different amounts depending on the provider, which is why comparing multiple options is critical
How Chaiz makes it easier
Unlike traditional warranty companies, Chaiz gives you:
- No pressure – Get quotes without sharing contact info
- Transparency – See actual contracts before buying
- Comparison – View multiple providers side-by-side
- Expert Reviews – Understand coverage at a glance
- Lower prices – Save up to 60% vs. dealerships
- Convenience – Buy 100% online in 15 minutes
[Get a quote now](link to Article 2)
Quick tips
✓ VSCs are not insurance – You need both for complete protection
✓ Only manufacturers offer true warranties – Everything else is a VSC
✓ Read the contract before buying – Know what's covered and excluded
✓ Use Expert Reviews to understand coverage quickly
✓ Pre-existing conditions aren't covered – Fix issues before purchasing
✓ Compare multiple plans – Coverage and pricing vary significantly