Knowing the difference between an extended vehicle warranty and car insurance is important so you can make sure you have the right kind of protection and coverage for your needs. If you don’t understand the difference, you could find yourself in trouble later on when you need a certain type of coverage that you thought you had but didn’t!

Although in principle, there are some similarities between an extended vehicle warranty and car insurance, they are quite different. The main similarity is that they are both designed to help pay for repairs to your car in certain situations. On the other hand, the key difference is that car insurance is required in the U.S. (in all states but New Hampshire) while an extended vehicle warranty is completely voluntary. Another important difference is in the purpose of each type of coverage. The main purpose of car insurance is to help pay for damage to your car from a car accident, theft, fire, etc., while the main purpose of an extended vehicle warranty or vehicle protection plan is to help cover the cost of vehicle problems due to equipment or mechanical breakdowns.

What Does Car Insurance Include?

To better understand the differences, let’s take a deeper look at what car insurance coverage can include in addition to the collision and comprehensive coverage mentioned above. A car insurance policy can also include:

  • Liability coverage: This helps pay for medical bills or damage to property for someone else when you’re at fault for an accident.
  • Uninsured or underinsured motorist coverage: This extra coverage can help pay for repair and/or medical bills if you have an accident with an uninsured or underinsured driver.
  • Medical payments coverage: If you or your passengers are injured in a car accident, medical payments coverage helps pay for your medical expenses.
  • Personal Injury Protection: This is also known as no-fault insurance and might cover some of your medical bills from car accident-related injuries.

What Is Covered Under a Vehicle Warranty?

Now let’s look more at what an extended vehicle warranty or vehicle protection plan includes. To start, let me explain the term extended vehicle warranty. This term is probably the best-known one for this type of coverage. However, the vehicle manufacturer is the only one that can sell a warranty or legitimately extend the warranty. You can buy a true extended car warranty through the manufacturer directly or sometimes, from an authorized dealership.

All other plans in this category are vehicle protection plans, mechanical breakdown insurance, or extended service contracts. Any plan sold by an independent provider is one of these, and often, the plans sold by dealerships are too.

Whether it is an extended car warranty or a vehicle protection plan, these plans help pay for part of certain repairs and problems after the original manufacturer’s warranty is expired. Also, many vehicle protection plans include additional features and benefits like roadside assistance, rental car reimbursement, and more.

The Benefits of autopom!

Now that you know the difference between an extended vehicle warranty or vehicle protection plan and car insurance, is it time to start shopping? I sure hope you have car insurance, but if your manufacturer’s warranty has expired (or will soon), I encourage you to consider extended coverage. I suggest shopping around and invite you to start with autopom! autopom! has an excellent reputation in the industry and offers many different plans at competitive prices. Plus, when you get a vehicle protection plan from autopom!, you get much more than just repairs. Check out some of the great features and benefits that autopom! offers and then give us a call. Our agents will be glad to help!