Vehicle service contracts are designed to help cover the costs of expensive repairs to a vehicle, including parts, labor, taxes and associated fees. These contracts cover the vehicle past the end of the manufacturer's warranty, essentially functioning as extended coverage.
The exact level of coverage provided differs between vehicle service contracts. Most retailers offer several different levels of coverage, with the most expensive contracts covering the vehicle for longer and encompassing more repairs. Contracts generally cover repairs to broken or malfunctioning parts, but not damage from accidents. Most contracts stipulate that the owner of the vehicle must perform basic preventative maintenance on the car in order to retain coverage.