What is the difference between an extended auto warranty and a Vehicle Service Contract?

An “extended auto warranty” is a contract offered by a new car dealer to “wrap” the new car factory warranty and extend beyond it. A vehicle service contract is sometimes incorrectly referred to as an “auto warranty” or “extended auto warranty” if sold outside of a new vehicle purchase. The difference is subtle and, in practical terms, insignificant to the consumer. In fact, vehicle service contracts typically provide you with more repair facility options and rental car options than dealer sponsored warranties. Vehicle service contracts can be purchased at any time – although the earlier you purchase a vehicle service contract in the life of the vehicle, the better coverage you can usually obtain.