When shopping for a vehicle service contract, a lower monthly payment can look like an easy win. But a powertrain-only plan covers a narrow set of components. And as vehicles age, the repairs that come up most often tend to fall outside that coverage.

An AC compressor failure, a broken alternator, or a worn power steering pump can each cost $700 to $1,200 or more, and none of those would be covered under a basic powertrain plan. Understanding what each coverage tier actually includes—and what it leaves out—can help you choose a plan that fits both your vehicle and your budget.

What You’re Actually Buying With a Named-Component Plan

Named-component vehicle service contracts are more commonly known as “powertrain” plans and are generally in place to protect the most important parts of the car, such as the engine and transmission. While these components are essential and oftentimes are the most expensive to replace, they are not the only costly parts of a car. This means coverage is more limited in scope, especially because the coverage is so narrow.

Powertrain plans are intentionally priced to reflect the probability of a catastrophic vehicle failure. This means that you will only be able to use your coverage if something major goes wrong with your car. While this may seem like good coverage, some non-powertrain components may require more frequent repairs as vehicles age. If you need broader repair coverage, a more comprehensive extended car warranty may be worth considering.

The Repairs Powertrain Plans Routinely Miss

When looking at whether or not a powertrain plan is worth it or not, it is important to think about the types of repairs that tend to come up once a vehicle exceeds 80,000 miles. Air conditioning compressors, alternators, starters, steering components, and suspension parts are examples of repairs that may occur in older vehicles, and none of them will be covered by a powertrain warranty. This means that you will be on the hook for these repairs while also paying for a vehicle protection plan that you simply are not using.

The repairs that powertrain plans miss are not inexpensive just because they are not connected to the engine. An alternator replacement, for example, can cost between $750 and $1,030. A power steering pump replacement will be somewhere between $700 and $925. Neither of these repairs will be covered by a powertrain plan, which can result in high out-of-pocket costs if they come up.

In addition to the cost of replacements, labor costs for shops all over the country are on the rise. Automotive labor rates are currently between $120 and $160 per hour and are on their way up as the year progresses, with a 13% to 15% year-over-year increase.

If you have a somewhat new car, by the time major problems start to happen, you could be looking at an even more expensive repair bill, which will not be covered by your protection plan. If you want to plan for potential future repair costs and help manage potential repair expenses, a more comprehensive extended warranty can provide the broader coverage you’re looking for.

The Cost-Per-Covered-Component Math

One of the things that makes choosing the right plan for yourself and your car difficult is the variation in monthly plan premiums. If you are shopping for a protection plan and one costs $90 a month while the other costs $150 a month, the cheaper option will likely seem more appealing initially. When you break down the math of the individual component coverage, though, it does not make nearly as much financial sense to go with the less expensive plan.

Most powertrain protection plans will cover 30 to 40 individual parts, while a comprehensive exclusionary-style warranty will cover hundreds of components across the entire vehicle. As your vehicle ages and experiences normal wear and tear, additional components or systems may require repairs as it accumulates mileage. You may be able to reduce out-of-pocket repair costs over time if you opt for the “more expensive” plan with additional coverage options.

Who the Cheaper Plan Actually Makes Sense For

While a comprehensive coverage or exclusionary plan may be a better choice for some drivers, stated-component powertrain coverage has benefits that are important to recognize.

For example, if you own a relatively new vehicle still under the manufacturer’s warranty and you don’t plan on keeping it for the long term, having cheaper protection from catastrophic failures might be a better choice. This option allows for coverage when there is a serious issue with the car that could result in significant repair costs, while saving money on the repairs that are less likely to happen with a newer vehicle.

A powertrain-only plan may also be acceptable if an owner has enough of an emergency fund to take care of medium-to-large unexpected repairs out-of-pocket without having it become a big financial burden. If you are able to cover these types of repairs yourself, you can keep the cheaper coverage for the incredibly large repairs that may or may not come up, such as a transmission replacement or other serious powertrain issue.

However, if you want broader coverage, a comprehensive exclusionary plan may be worth considering. With a wide-ranging coverage plan, you can help manage certain repair expenses and know what to expect when it comes to getting your vehicle taken care of when something goes wrong. If you are someone who needs that kind of financial predictability, complete coverage may be worth considering.

Get the Coverage You Need With Endurance

No matter what kind of vehicle you have, knowing that you can get it fixed when the need arises will help you drive with confidence. Endurance offers a wide range of auto protection plans for cars and drivers of all kinds, whether you have an older car with a lot of miles or a new exotic or luxury vehicle.

Endurance also provides coverage options for certain vehicles that may not qualify with some providers, such as Canadian Gray Market vehicles, cars with a rebuilt or salvage title, and vehicles used for commercial purposes like rideshare and delivery.

On top of a range of coverage options for many vehicle types, Endurance also offers a large suite of standard benefits. These include things like 24/7 roadside assistance, trip interruption protection, and rental car reimbursement. Plus, Endurance customers can also get access to a free year of our Elite Benefits program, which comes with more perks like tire repair or replacement, windshield coverage, and key fob replacement.

If you need coverage options for your vehicle, get in touch with our award-winning customer service team at (800) 253-8203 for a FREE quote. You can also shop online to get an instant price preview and see your rate right away.

For more helpful guides like this one, be sure to check out the Endurance Warranty blog. There, you will find DIY tips and tricks, mechanical breakdown insurance information, provider comparisons, and much, much more.