What's a Vehicle Service Contract or Extended Vehicle Warranty?
Most new vehicles purchased these days come with a warranty - this is an agreement between the manufacturer and the customer that should anything break, malfunction, or otherwise go wrong with the vehicle within a certain period of time (typically 3 years or 36,000 miles, whichever comes first), then the manufacturer will repair or replace the component at no cost to the customer.
Vehicle service agreements (also known as extended warranty plans) are designed to offer similar peace of mind by literally extending the length of time a customer can expect to receive such coverage.
Never assume that a vehicle service agreement(extended warranty) includes parts and labor costs. You could end up paying for the time the mechanics spent repairing your vehicle. Considering that hourly rates can be between $70 and $100 or more per hour, these costs can quickly add up. Additionally, think about what other expenses you may incur if your vehicle is in the shop for a while. Car rental fees are another expense that can be costly unless covered by your warranty.