What’s the Difference Between Gap Coverage and a Vehicle Service Contract?

A close up of an orange warning triangle placed on the road in front of a stalled vehicle.

Whether you’re hitting the open road, racking up the miles commuting to work, or even storing your vehicle, purchasing the right auto protection can help you avoid any potentially costly repair bills. In 2020 alone, Consumer Reports shared that a five-year-old vehicle costs an average of $205 per year to own, while a 10-year-old vehicle costs an average of $430 per year — not including unforeseen breakdowns or damage caused by accidents.

Purchasing a vehicle service contract (VSC) or gap coverage can help cover you from unexpected costs. Understanding the differences between these two types of auto plans is essential to ensuring you receive the best protection possible for your vehicle.

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What Is Gap Coverage?

Finding the perfect brand new car or used vehicle is an exciting time for anyone, and paying for it with an auto loan or lease arrangement can be a great way to get started on your purchase. Protect yourself from high repairs costs due to an unexpected breakdown or accident can also help you make sure that you stick to your intended budget.

Your auto insurance policy can also help protect you financially if your vehicle is stolen by paying out the vehicle’s current value after depreciation. For example, if you currently owe $20,000 towards an auto loan for your Jeep Wrangler that has a current depreciated value of $17,000, your insurance provider will not reimburse you for that gap of $3,000. On the other hand, Gap coverage will reimburse you for the $3,000 that your auto insurance policy will not cover.

What Is a Vehicle Service Contract (VSC)?

When you purchase a new vehicle from a dealership, your vehicle is protected by a manufacturer’s warranty. This coverage will help cover the cost of repairs or breakdowns caused by general wear and tear and other defects for typically three years or 36,000 miles or for six years or 100,000 miles. 

Once this initial manufacturer’s coverage ends, a vehicle service contract (also known as an extended warranty) offers drivers continued protection against those same unexpected and often expensive repairs, including the most vital components of a vehicle, such as an engine and transmission. Some plans, such as EnduranceAdvantage, can even help you extend the life of your vehicle with up to $3,500 routine maintenance coverage.

While most vehicle service contracts (VSCs) cover a vehicle’s most vital components, various types such as a bumper-to-bumper and powertrain warranty can each cover a specific set of your vehicle’s components. On top of the component coverage, vehicle service contracts often come with additional perks to save you even more money. 

For example, every Endurance protection plan automatically comes with up to a year of free Endurance Elite Benefits, meaning you enjoy access to a host of extra perks, including:  

  • Tire replacement and repair: Small punctures, hazardous roads, and heavy loads are just some of the causes of a blown-out tire. Replacement tires can cost anywhere up to $300. Endurance service contracts include two tire repairs or replacements per year, which can save you up to $125 a year.
  • Key fob replacement and repair: Replacing a car key fob can cost anywhere from $200 to $400. Endurance offers protection of up to $500 in key fob replacements.
  • Roadside assistance: Endurance offers 24/7 roadside assistance as well as trip interruption cost coverage.
  • Collision discounts: Ensuring you’re covered in the event of an accident with auto insurance is essential. Endurance can help ease even more of the financial pressure of an accident by offering up to $500 per covered collision, up to a $1,000 limit.
  • Total loss protection: If your vehicle is deemed a total loss, Endurance will provide you with up to $1,000 towards a replacement vehicle.
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Gap Coverage & Vehicle Service Contracts: Side-by-Side Comparison

Gap coverage and vehicle service contracts are not interchangeable — they each offer different protection to motorists, and often it can make sense to take out both forms of coverage.

A chart highlighting the differences between Gap Coverage and a Vehicle Service Contract.

* Check the details of individual plans to see which components are included. You can find more information on the main types of vehicle service contracts and what they cover here.

Protect Your Vehicle with Endurance

Many drivers will often combine different coverage options to have the most coverage available on their vehicles, such as a vehicle service contract, auto insurance, and gap coverage. Factors such as your vehicle’s make/model, mileage, accident history, and more can all help you in determining the types of coverages you should get.

Have even more peace of mind when it comes to avoiding unexpected and costly repair bills with a plan like EnduranceAdvantage. As the most comprehensive plan available, Advantage offers drivers breakdown coverage along with up to $3,500 in regular maintenance costs for services such as oil and filter changes, tire rotations, and more — helping to keep your vehicle running for longer. Additional perks, such as 24/7 roadside assistance, key fob replacement, and collision discounts, also come free for 1 year with the purchase of any Endurance protection plan as part of our Elite Benefits package.

Request a free, no-obligation quote to learn more about our auto protection plans, or visit the Learning Center for more informative and insightful articles on how you can protect your vehicle.

A Vehicle Service Contract (VSC) is often referred to as an “auto warranty” or an “extended car warranty,” but it is not a warranty. A VSC does, however, provide repair coverage for your vehicle after the manufacturer’s car warranty expires. A VSC is a contract between you and a VSC provider or administrator that states what is a covered repair and what is not. Not all vehicles qualify for coverage; Endurance does not offer VSCs in California.