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Insurance Policy or Vehicle Service Contract?

By February 18, 2019 January 30th, 2020 No Comments

Vehicles today are increasingly complex, especially with all the new electrical components, and Canadians are looking for more and more solutions to protect their investment.

For decades we have all associated the term “bumper to bumper” with new vehicle warranty, and while it still remains undefined, the term suggests that everything between the bumpers is covered under warranty. In reality, you will be hard-pressed to find such coverage in writing from any of the major vehicle brands today, or from any insurance policy.

Extending the manufacturers’ warranty

Vehicles come with a warranty of 3 years and 60,000 km, 4 years and 80,000 km or 5 years and 100,000 km, depending on the manufacturer (check out our blog on what each provides). When it’s time to extend the warranty, a consumer can decide between an independent insurance policy (think of house or car insurance) or vehicle service contracts (warranties like you’d see at a store such as Best Buy), or VSC for short, from the manufacturer.

Be aware that a VSC is different from the original manufacturers’ warranty — it isn’t an extension of the exact same thing, and they can be open to a lot of interpretation. Here are some examples of what you could be looking at:

  • GM Total Plus (VSC)
  • BMW Certified Series (VSC)
  • Mercedes Benz Certified Series (VSC)
  • Toyota Extended Care Plan (VSC) (available in Silver, Gold and Platinum)
  • Acura Plus Plan (VSC)
  • Honda Plus Plan (VSC)
  • Ford Care (VSC) (which has many different levels of coverage)
  • Audi Certified Plus (VSC)
  • Other third party providers of VSC and insurance

The list goes on and on. So, how do you know which warranty to chose? Let’s face it: the automotive industry is a marketing giant, and when it comes to extended warranties, they have flashy brochures often listing hundreds of components you have never heard of. But the reality is you should be most concerned with what’s NOT covered to make the decision.

After all, when you need to make a claim the brochure is out the window, and the small-print policy wording is called upon. It’s time for a transparent approach to extended warranty, one which provides great coverage all with easy-to-understand exclusions.

Does buying an extended warranty from the manufacturer provide “bumper to bumper” coverage? No.

Canadians need to read and understand the policies they’re looking at. They should be considering the following when buying an extended warranty:

  • Are you getting warranty advice from the warranty provider or a commissioned dealership sales office?
  • Where can the vehicle be repaired?
  • What is the KM coverage? How many extra years does it provide?
  • Who is assisting you during a claim?
  • Financial stability, usually best served by an insurance policy.
  • Can you transfer the policy?

To summarize: “bumper to bumper” is another way of wording extended auto warranty. It never mean that literally everything is included, although that’s what it sounds like. Always make sure you know whether you are looking at an insurance policy or a vehicle service contract, that you understand what you are reading and are happy with what is covered.

Learn more about Obvi’s Extended Warranty and how our policies do things differently, or get a fast and free online quote with the button below: