Auto service contracts — sometimes called "extended warranties" — are optional contracts sold by vehicle manufacturers, dealers, or independent companies.Checked 2026-08-11
Vehicle service contract
An optional contract bought separately that promises to cover certain repairs — commonly sold as an 'extended warranty'.
Also called: VSC · extended warranty · auto service contract
What it means
Definition
The FTC describes auto service contracts, sometimes called extended warranties, as optional contracts sold by vehicle manufacturers, dealers, or independent companies. They are bought separately from the vehicle, which is what distinguishes them from a manufacturer's warranty — the FTC notes that a manufacturer's warranty is included in the price of a new vehicle. What a given contract covers, and who administers it, is set by that contract.
Why a buyer cares
What it changes
Because it is a separate agreement rather than an extension of the factory warranty, its coverage, exclusions and claims process come from the contract document rather than from the carmaker.
In practice
Where you meet it
Offered in the finance office during purchase paperwork, and marketed directly by third-party companies through mail and calls.
Two things that look alike
Not the same as
A manufacturer's warranty comes with the vehicle; a service contract is a purchase.
Read next
Related terms
Powertrain warranty
Warranty coverage limited to the parts that make power and deliver it to the wheels.
Certified Pre-Owned (CPO)
A used car inspected under a manufacturer's own program and sold with added manufacturer-backed coverage.
Buyers Guide / "As Is — No Dealer Warranty"
The window form dealers must display on every used car, showing whether it comes with a warranty or none.
Where this comes from