America's Advocate for
Vehicle Protection Plans

Extended Service Contracts

The Market for Extended Service Contracts

Extended service contracts exist because manufacturer warranties don't last forever. When you buy a car or a consumer electronics product, the manufacturer warranties the product for a specific period of time. It's an automatic feature of the purchase. After the warranty expires, you are on your own -- unless you take steps to extend the protection on your investment.

Service contracts allow consumers to literally extend the life of their purchases. When the manufacturer's warranty expires, the purchase of an extended service contract continues to protect your investment, covering the cost of repair or replacement.

While the cost of a manufacturer's warranty is included in the initial purchase price, extended service contracts require the payment of an additional fee. But in most cases, the cost of the service contract is reasonable when compared to the potential cost of a repair or replacement.

Extended Service Contracts for Cars and Other Vehicles

Over the years, advances in technology and other factors have contributed to the skyrocketing costs of vehicle repairs. So it's not surprising that many consumers are eager to protect their investments in their vehicles after manufacturer warranties expire. VPA members provide this protection in the form of vehicle service contracts.

Vehicle service contracts offer a number of important benefits for owners. In addition to financially protecting the condition of their vehicles, most vehicle service contracts are transferable -- increasing the value of the vehicle on the secondary market.

How the VPA Protects Purchasers of Automotive Extended Service Contracts

The VPA was formed to ensure the ethical conduct of industry members who sell extended service contracts for cars, trucks, vans and other vehicles. VPA members agree to adhere to Standards of Conduct defined by the VPA.

Among other things, the VPA requires that vehicle service contract providers ensure that their customers have a clear understanding of the key terms of their contracts. Contracts must provide transparency in descriptions of terms, conditions and coverage as well as clarity in the processes associated with pricing, billing, cancellations and refunds.

In contrast to non-members, VPA members are prohibited from using the service contract "fine print" to exploit consumers and must include specific information in their contract. These contract inclusions have been created by the VPA to protect consumers and maintain the integrity of our member companies.

VPA Certification

Many VPA members take the additional step of obtaining VPA certification. Although it's voluntary, VPA certification is a rigorous, independent review process that makes sure the company is fully compliant with VPA standards, federal & state laws, and industry best practices.

By purchasing an extended service contract from VPA Certified Companies, you gain access to the highest quality service contracts on the market. Since VPA certification is also designed to help service contract providers operate more efficiently, you get added value for your dollars, not to mention the assurance of dealing with a reputable and compliant provider.

Boosting the Value of Extended Service Contracts

Not all extended service contracts have the same value for consumers. In the past, extended service contracts were often a mechanism that shady providers used to fleece consumers for additional money long after the initial sale.

Today, extended service contracts are the best way to protect the value of expensive purchases. Although the service contract industry is improving, the most effective way to guarantee a successful extended service contract experience is to rely on providers that adhere to regulatory standards and industry best practices.

VPA members and certified companies have voluntarily submitted their organizations to standards of conduct and additional oversight in an effort to provide their clients with a completely transparent buying experience. When it comes to extended service contracts, you won't find more fair and honest providers than VPA members.

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