What is an Extended Service Plan?

An Extended Service Plan provides coverage for parts and the associated labor relating to replacing items that break on your vehicle.

What is covered by an Extended Service Plan?

To answer this question we must first understand that there are many types or levels of plan coverage;

  • Total Coverage (typically called: Premium, Ultimate, Complete) - is the most comprehensive plan offered by a company. These plans typically cover over 1,000 parts, provide coverage for collateral damage (one part breaks because of another part), provides coverage for wear and tear, provides roadside assistants, and provides a rental car).
  • Extra Coverage (typically called; Extra or Quality) - provides coverage for a short list of extra parts above your essentials (powertrain and electrical).
  • Base Coverage - provides coverage for the items that make your car start and move. This usually does not cover your radio or air conditioning.
  • Powertrain Coverage - provides coverage for only the parts related to your engine and transmission.

Who offers Extended Service Plans?

Every new car dealership will offer Extended Service Plans that are either backed by a manufacture or usually a highly reputable third party that has been underwriting service plans for years.

Used car lots that have been in business for a good amount of time and meet certain qualifications can and often do offer Extended Service Plans.

In today's market, many finance companies and insurance companies have begun underwriting and offering service plans also.

IN OUR OPINION: We strongly suggest that you take extra precautions when considering a service plan that is offered to you on T.V., Radio, by Phone, or in the mail. These companies typically do not offer the same protection as the Extended Services Plans you can purchase at a dealership.

What kind of protection do you need?

The answer to this question may seem a little vague, but you must consider the following before determining what kind of Extended Service Plan you need:

  • The year of your vehicle
  • The present miles on your vehicle
  • The amount of miles you drive a year (on average)
  • The amount of coverage you desire
  • The amount of money you are willing to spend

Protect your investment.

We have all heard these comments from a dealer:

  • Protect your investment
  • Protect your cash
  • Peace of Mind

These are all correct statements that we have for years taught the dealers to say to sell products, especially Extended Service Plans. Well in reality these are correct statements. The purpose of an Extended Service Plan is to prevent you from having to pay for unexpected repairs, which can be extremely costly and usually happen when we least expect it and are low on cash.

We have all heard of people who have bought one before and never used it, but we have also heard of the people that bought one and had to replace an engine or transmission. Extended Service Plans are a great benefit, but only you can decide if you truly need one.

Frequently Asked Questions

Isn't this the same as a warranty?
No, a warranty can not be purchased. A warranty, by legal definition and Federal Regulations, must be free to the consumer.

Why would I buy this?
There are many pro's to an extended service plan. The dealer will tell you that you are protecting your investment and your cash. They are right! If something was to break that your factory warranty does not cover, typically it will be covered by the extended service plan. Now, be careful, there are many different levels of coverage, be sure to discuss all the different coverage levels with your dealer.

I have a factory warranty, why would I need this?
The key word in all factory warranties is "limited". Depending on the plan coverage, typically, an extended service plan will provided coverage for wear and tear, collateral damage, or items not covered by the "limited" factory warranty.

Here is a great example: In 2016, Ford added a lightening feature to their Ford Protect PremiumCare Plan. This feature would cover the new LED headlights, ambient lighting, and taillights. One headlight to replace is more than $1,500 and this headlight is not covered by the Ford Factory warranty or your insurance company. BTW, many auto manufactures are going to LED headlights.

Can I get one on the car I am driving now?
Yes. Now note that the age of your car and the miles on it can affect the eligibility of your car. There are many companies offering plans to meet your coverage needs, however we first suggest that you ask your dealer or contact a dealer that offers your make and model of car for sale. They will be the most knowledgeable.

Can I get payment terms on the cost of coverage?
Yes. Most companies that offer Extended Service Plans have formed a relationship with a finance company and offer rate as low as 0% financing on your coverage.

Are all vehicles eligible?
No. Please check with the plan coverage and the offering company for vehicle eligibility.

Can I add it to my vehicle loan?
Yes, this is typically the best time to purchase an Extended Service Plan.

View our present database of Extended Service Plan contracts and brochures.


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