When it comes to protecting your vehicle, you have car insurance in case you get into an accident. But what if you need a new transmission? What if your engine needs work? Unless you’ve got a mechanic friend who just happens to have all the right parts laying around (and some free time), you’re going to be stuck paying for it out of pocket if your vehicle isn’t under manufacturer's warranty.

That’s where a vehicle service contract comes in.

In simple terms, a service contract is a promise to pay for certain repairs or services on your vehicle. However, there’s still a lot of confusion about what a vehicle service contract is and how it relates to the term “extended car warranty.”

We’re here to help explain.

Extended Car Warranty or Vehicle Service Contract?

After your original manufacturer’s warranty runs out, you may want to help protect yourself from the cost of an unexpected vehicle breakdown by buying additional coverage.

Products offered to supplement your manufacturer’s warranty are sometimes mistakenly referred to as extended car warranties. This type of coverage doesn’t technically extend the coverage of your manufacturer’s warranty, however – it’s actually a new contract between the contract provider and the consumer. As such, a more accurate label is vehicle service contract.

This type of coverage may differ from a manufacturer’s warranty in the repairs that it covers and in coverage limits. Vehicle service contracts also often include additional services like roadside assistance.

New Car Warranties and Vehicle Service Contracts

Typically a manufacturer’s warranty offers basic coverage for at least three years or 36,000 miles — whichever comes first. This is often referred to as a bumper-to-bumper warranty. Some new vehicles may also come with a powertrain warranty of up to 10 years or 100,000 miles — but these usually only cover the engine and transmission.

If you’re buying a new car, many dealers will also offer to sell you supplemental coverage over and above the basic warranty. As this coverage isn’t part of the original manufacturer’s warranty, it’s considered a vehicle service contract.

If your manufacturer’s warranty is set to expire in the near future (or has already expired), you may want to look into the benefits of a vehicle service contract.

Another situation where you may want to look into purchasing a vehicle service contract is when you’re buying a used car — whether through a private seller or a used car dealer. While a used vehicle may come with some sort of existing coverage, that’s definitely not a given.

If you’re buying a used car “as-is” (which means the seller takes no responsibility for any repairs or parts that might be needed), you’re going to have to pay for any repairs out of pocket. By pairing a vehicle service contract with your used car purchase, you can avoid the cost of any covered repairs that might spring up in the future.

What’s Covered by a Vehicle Service Contract?

Most vehicle service contracts will include a section listing the specific parts that are covered under your contract (and the circumstances under which those parts are or aren’t covered). They may list out coverages in sections based on different parts of your car (e.g., the engine, transmission, air conditioning, drive axle, etc.).

Another important area of a vehicle service contract to review is the exclusions section. This is where you’ll find a list of all the parts and services that ARE NOT covered under the contract. In addition, most vehicle service contracts don't cover pre-existing conditions, so you shouldn't expect help paying for a problem you already have.

Since vehicle service contracts can vary widely based on the year, make, model and mileage of your car (as well as a variety of other factors), it’s important to read your contract closely to make sure you understand what’s covered and what isn’t. Very few service contracts cover all repairs1, so keep that in mind before making a purchase or filing a claim.

Mechanical Breakdown Insurance

The difference is that mechanical breakdown insurance is actually an insurance product as opposed to a warranty or service contract.

Depending on your state, and its regulatory approach to such products, you may be offered MBI as an alternative to a vehicle service contract.

Conclusion

When it comes to your vehicle, you just want the peace of mind that comes from knowing you're protected in case of a covered car repair. But with so many different terms being used to describe very similar products, it can be tough for consumers to make sense of it all.

At the end of the day, it's up to you to decide when and where to purchase a vehicle service contract. These days, it's easy to compare providers, coverage options and prices to make sure you're getting the right coverage — all from the comfort of your home.

The auto industry is in the middle of a revolution, one where new and emerging technologies are steering the market. Such high-tech features are placing a tremendous burden on the typical vehicle’s 12-volt electrical systems and for this reason we’re seeing a new trend: cars equipped with 48-volt electrical systems. Not every new vehicle will feature such systems, but for those that do, there are strong benefits for manufacturers, consumers and the environment alike.

The Current Standard: 12-Volt Electrical Systems

Every vehicle’s electrical system is composed of a battery, starter and an alternator. Modern vehicles have 12-volt electrical systems, with the car battery serving as the center of that system.

Electricity flows out from the battery by means of the positive terminal through wires to power various components, including the starter. The starter stores a small amount of electricity to turn the engine, while the alternator helps keep the battery charged when the vehicle is running, by sending power back to the battery through the negative terminal.

Although 12-volt electrical systems have been the standard for decades, they’ve also been called upon to do more work in recent years, including powering water pumps and turbochargers, and to supply power to the computer, navigation and audio systems. As vehicles become more complex, manufacturers are exploring other options, including the 48-volt electrical systems.

Emerging Technology: 48-Volt Electrical Systems

There are two reasons why car manufacturers are planning for 48-volt electrical systems:

1) Such systems can handle more complex loads, including technologies related to autonomous vehicles.

2) Environmental benefits may be realized, through reduced emissions and improved fuel economy.

Suppliers such as Bosch, Continental, Delphi and Valeo are developing 48-volt electrical systems for manufacturers. These new systems will power such energy-intensive components as turbochargers, hybrid motors and stop-start motors, and supply electric power to the water pump, air conditioning, power steering and power brakes.

Does this spell the end of the 12-volt electrical system? No. In fact, future cars will likely run the two systems concurrently, with 12-volt systems powering the lights, center console, seats and windows, and 48-volt systems tasked with supplying energy for power-consuming components.

On the environmental side, 48-volt electrical systems will also allow manufacturers to transform some models into mild hybrids by replacing the starter with a 48-volt motor generator unit (MGU). Such vehicles would also gain a 48-volt lithium-ion battery pack and a DC-to-DC converter, creating the mild hybrid system.

A mild hybrid system utilizes both the gasoline engine and electric motor to power the car, with fuel savings of 15 to 20 percent possible. Like similar systems, mild hybrids offer another tangible environmental benefit: a reduction in emissions. In all, mild hybrids provide about two-thirds the benefit of traditional hybrids, but at just one-third the cost. Expect manufacturers to turn to such systems in an effort to meet ever-increasing federal fuel economy and emissions mandates.

Current Applications

You’ll currently find 48-volt electrical systems in a few models, including the Bentley Bentayga, which utilizes this system to power its electronic sway bars. While mechanically operated sway bars do a good job of reducing body roll in a turn, the electronic system is simply superior. That’s expected in a $230,000 super luxury SUV, but it’s only achieved with a 48-volt system.

Coming to a Car Near You

Most manufacturers haven’t said how and when they’ll implement 48-volt electrical systems, but you’ll be hearing about them, especially if you follow the major auto show and technology circuits.

For North American enthusiasts, upcoming auto shows in Los Angeles, Detroit, and New York may very well reveal where this trend is going regionally. The CES (Consumer Electronics and Technology) Show held in Las Vegas in early January should also provide some details.

Getting into a car crash can be stressful and cause panic, even if you are protected with car insurance. Many folks have coverage, but don’t know what to do after an accident and don’t know how to file a car insurance claim. Keep calm and read on.

The car insurance claim process may seem daunting, but it is easier than it appears. Here is some information on what to do after a collision and how to file a claim with little hassle.

Things You Should Know Before the Worst Happens

No one plans to get into an accident, but it’s important to know what your policy covers in case you have file a car accident injury claim or any other insurance claim. Read through your policy so you always know where you stand. Know how much liability coverage you have and if you have collision and comprehensive coverage. If you notice any coverage you want that isn’t included in your plan, contact your insurance company to get it added to your policy. Reading over your policy can also inform you on how to best file an auto insurance claim with your insurer if you cannot proceed with traditional methods.

After the Accident

There is a whole guide on what to do after getting into an auto accident and there are some steps that take priority before filing accident claims. In short, pull over and park away from traffic if possible, check yourself and others involved in the accident for injuries, call the police to report the accident, and exchange insurance information with the people involved with the collision. Also, take pictures of the accident scene if you are able, write down license plate numbers of all vehicles involved in the collision, and write down the names and contact information of any witnesses.

Contact Your Insurance Company

Regardless of whoever caused the accident, you should call your insurance company as soon as possible to report the accident and file a claim. There should be a national or local phone number on your insurance card that you can call. When you speak with your insurance representative, ask if there are any particular forms you need to fill out or other information they need in order to swiftly process auto accident claims. Knowing what information you’ll need to obtain, usually items such as repair bills and the police report, will save you from making follow-up phone calls later on.

Take Your Car to a Repair Shop

While most state laws prohibit insurance companies from favoring specific auto body repair shops, many will provide you a list of local shops that are backed by repair and labor guarantees. Ultimately, you will be the one to choose which repair shop will fix your car. Make sure you know what your settlement amounts are before signing off on an estimate for repairs. You don’t want to end up paying beyond your policy’s limit if you can help it. Keep and make copies of all paperwork.

Cooperate With Your Insurer

Depending on the severity of the accident, you may be required to give your insurer additional information. They may call the repair shop to discuss the estimate for repairs or send an insurance adjuster to inspect the car. You may need to send copies of any legal papers or settlement offers you receive in relation to the accident. This can help your insurer defend you if you are sued as a result of the accident. It may seem like a hassle, but it is all in the interest of providing you the protection you purchased.

Keep Records of All Related Expenses

If you get a car estimate, hospital bill, a bill for a rental car, or any other expense related to your car accident, you need to be able to show proof of it to your insurance company. Keep any and all receipts or paperwork that indicates how much you paid or need to pay. You should also write down and report anything that could be considered lost wages. This can help you get reimbursed properly for these expenses.

Keep and Store Copies of Paperwork

This has been mentioned previously multiple times, but it bears repeating. It is important to keep any and all paperwork related to your accident in order for your insurance provider to refer to it when filing your car insurance claim. Keep the originals and make copies of any forms, bills, or other items related to your accident. You should also consider keeping your records organized in a file and kept in a safe place in your home.

If You’re Dissatisfied, Talk to Your Insurance Agent

If your claim has been processed and you aren’t satisfied with your payout, don’t be afraid to talk things over with your insurance provider. You can both review what was outlined in your policy agreement and see if there was any information that was overlooked or forgot to provide. It could also be an opportunity to update your insurance policy to include certain coverages that weren’t available to you in this instance.

Refinancing your auto loan means replacing your existing loan with a new one from a different lender. Your current loan gets paid off by the new lender and you start making monthly payments, hopefully, smaller ones, on the new loan.

If you think your credit has improved since you bought your car, you should look into auto loan refinancing. There’s a good chance you can lower your interest rate and end up with a smaller monthly payment. You might also be able to shave some time off the loan, or go the other way and extend the term of the loan if you’re having trouble making your monthly payment.

What’s the catch? There isn’t much of one: It takes some time, and your credit profile might take a slight hit when you apply for the new loan. However, know two important things:

1. Most auto loans don’t have a prepayment penalty so refinancing won’t cost you anything.
2. Submitting an application for refinancing has no application fees, and the funds become available quickly, often within a day.

Why you might want to refinance

The prospect of paying less interest or lowering your monthly payments are the main reasons to consider refinancing. Let’s say your current auto loan has a 10% interest rate, and you’ve been making payments for a year or so. Chances are, your credit has improved and you could now qualify for a lower interest rate, which could lower your monthly payments. If you simply went to your current lender and asked it to lower your rate, it would probably say no. After all, you signed a contract at a certain interest rate and the lender wants its money.

Lucky for you, in today’s competitive market, plenty of other lenders are eager to get your business. When you refinance, you simply go to another bank, credit union or online lender and show it how much you still owe, called the balance of the loan. It pays off your existing balance and creates a new loan; and you start sending your monthly payments to the new lender.

If you meet the requirements, refinancing your car loan for a smaller payment could allow you to put more into savings, investing or a home improvement project. Or you may be able to pay off your car sooner. All of these options are better than pouring your money down the drain by paying more interest than you need to on a car loan.

When refinancing your car loan makes sense

Refinancing your auto loan could be the right move for reasons other than your improved credit. Even if you’re satisfied with your current loan, it doesn’t hurt to see if you can save money on interest. It makes sense if:

Interest rates have dropped. Interest rates fall for a variety of reasons: a changing economic climate, increased competition in the banking industry, even regulatory changes. If interest rates are lower now than when you first got your car loan, refinancing is likely to lower your rate and could help you pay the loan off sooner. Or, it could save you money on interest. It only takes a few minutes to apply for refinancing and see if a new lender — a bank, credit union or online lender — will offer you a lower interest rate.

A car dealer marked up your interest rate. When you got your existing loan, the car dealer might have charged you a higher interest rate than you could have qualified for somewhere else. This often happens to shoppers who don’t check their credit score before buying a car. They are persuaded to take the dealership’s loan because they didn’t shop around for the best interest rates. But you can undo the damage by refinancing and getting a new loan at a lower interest rate.

You can’t keep up with payments. Maybe you got overexcited at the dealership and bought a car that’s really too expensive for you. You might be struggling to keep up with payments. Or maybe you’re facing unexpected financial challenges because of a job change or other circumstances. By refinancing your car loan, you can take more time to pay it off, and this will lower your payments. You should think carefully before taking this course of action: If you extend the loan term, you’ll pay more in interest over the life of the loan. That’s not optimal — but it’s better than damaging your credit by missing payments.

With the end of the summer near, Labor Day marks a time of change, and, for car buyers, that presents one of the best times of year to shop.

New 2018-model-year cars are starting to arrive at dealerships, which makes it a good weekend to check out the latest vehicles. It also means dealers are looking to move 2017 models to make space for them, and that spells great deals and discounts.

With dealerships across the country offering sales events for limited periods, expect them to be busier than normal over the coming days, but remember there are ways to save time.

Applying for financing before you shop is a smart approach recommended by the Consumer Financial Protection Bureau (CFPB).

If approved, not only will you have saved yourself the need to arrange to finance at the dealership, you can potentially save money by shopping around for the best financing deal.

Options include banks, credit unions, and finance companies, such as RoadLoans. As the online, direct-lending platform of Santander Consumer USA, RoadLoans enables you to apply for a loan when it suits you; from home, work or your mobile device.

A short, one-page application takes a few minutes to complete and consumers get an instant decision. If approved, just print the loan documents and take them with you to your recommended dealer nearby.

With a loan voucher in hand, RoadLoans customers can enjoy shopping with the confidence of a cash buyer.

And with the preapproval, if the dealership still offers you financing, you have something to compare it to and can choose the best offer.

So if you’re looking to make your dollars go further, consider shopping for a car over the Labor Day weekend, and apply for pre-approval before you go.

Several factors can lead to a higher auto insurance premium. Insurance companies (insurers) lose money when they cover drivers who get into accidents and make claims, so it’s in their best interest to predict driver risk factors that indicate a higher chance of a claim and charge the driver an increased premium to compensate for the elevated probability of a payout.

Based on this knowledge there are many factors that can lead to increased premiums, but some of the most popular ones include:

Accidents

If you file an accident claim with your insurance company, your premium will increase at its renewal period based on the claim.

Violations

If you are convicted of a moving violation, your premium rate may increase at its renewal period. Your driving history, length of time you’ve been insured with a company and speed you were going when cited can affect whether your rate increases or not.

Moving

Where you live (zip code) influences your rate. If you move to an area with higher theft or accident rates (city versus a rural town for example), your renewal premium could reflect this change.

New Car

A new car is worth more than an older model and will cost more money to replace if it is damaged or stolen, which could result in a spike in your premium rate.

Age And Marital Status

If you’re young, single and without children, you are considered part of a higher risk category than a married person with kids. Besides the fact that a young driver will have less experience on the road than an older driver, it is assumed a single adult may not be as serious about becoming a better driver than a married adult with kids, and that can cause increases in your auto insurance rate.

Commute

If you drive a lot and have a long commute to and from work or use your car for work, your premium rate can be higher because frequent driving leads to more opportunities for accidents to occur.

Many insurers use credit score to determine auto insurance rates, but at Active Insurance we work with companies that don’t use credit history so you’re eligible to receive the best rates from us, even if you don’t have the best credit score.

Car insurance is mandatory for all drivers and how much you pay is determined by several factors. It’s important to contact your insurance company with any questions regarding increased premium rates.

Fast-forward 17 years and there are apps for everything — even your car. Chances are, if an app might make part of your life easier, someone will develop it and plenty of people will use it.

Over the past few years, the concept of the connected car has continued to evolve — and become reality. At this year’s RSA Conference in San Francisco, our anti-malware researchers Victor Chebyshev and Mikhail Kuzin presented research that they conducted on seven popular apps for vehicles.

The apps seem to make users’ lives easier by linking their Android devices to their automobiles, but we have asked: Are we trading security for convenience? And as with many IoT connected devices, the answer is, security needs to become more of a priority for developers and manufacturers.

The primary functions of these apps are to open doors and in many instances start the car. Unfortunately, flaws in the apps could be exploited by attackers:

No protection against application reverse engineering. As a result, malefactors can dig in and find vulnerabilities that give them access to server-side infrastructure or to the car’s multimedia system.
No code integrity check. This allows criminals to incorporate their own code in the app, adding malicious capabilities and replacing the original program with a fake one on user’s device.
No rooting detection techniques. Root rights provide Trojans with almost endless capabilities and leave the app defenseless.
Lack of protection against overlaying techniques. This allows malicious apps to show phishing windows on top of original apps’ windows, tricking users into entering login credentials in windows that send the info to criminals.
Storage of logins and passwords in plain text. Using this weakness, a criminal can steal users’ data relatively easily.

Upon successful exploitation, an attacker can gain control over the car, unlock the doors, turn off the security alarm and, theoretically, even steal the vehicle.

The researchers disclosed their findings to the developers (they did not disclose names of the apps publicly) and also told them that no exploitations had been seen in the wild. A full, detailed report on this can be found over on Securelist, where each of the apps is evaluated.

It’s easy to bury your head in the sand, thinking you won’t be hacked or that this is the stuff of science fiction, but the truth is, ever since its invention, the automobile has been a target for criminals. And if there is a hack to make things easier, just imagine the possibilities.

Another thing to keep in mind is that we’ve already seen vulnerabilities allow smart white-hat hackers to make the jump from “benign vulnerability” to controlling a car. Two of the bigger automotive stories of the past two years was about how Charlie Miller and Chris Valasek took control of a Jeep via vulnerabilities.

Ultimately, personal security and app usage come down to personal preference. Who we share our data with or entrust our convenience to is really up to us. With IoT devices and apps, convenience is too often considered before security.

In closing, Chebyshev notes:

“Applications for connected cars are not ready to withstand malware attacks. We expect that car manufacturer will have to go down the same road that banks have already taken with their applications… After multiple cases of attacks against banking apps, many banks have improved the security of their products.

“Luckily, we have not yet detected any cases of attacks against car applications, which means that car vendors still have time to do things right. How much time they have exactly is unknown. Modern Trojans are very flexible — one day they can act like normal adware, and the next day they can easily download a new configuration, making it possible to target new apps. The attack surface is really vast here.”

One of the most overlooked yet important steps in the car buying process is the paperwork that follows the agreement to buy the car. So, even if you have already successfully negotiated your ideal price with the dealer and figured out your monthly payments, you are not on the clear just yet.

Once the deal is reached, you need to arrange financing, sign sales contracts and register the car. This may sound simple, but the process often takes hours. This is also when the dealer will try to sell you extra features, So, before you head over to the dealer to settle everything, make sure you are prepared.

What You Need to Bring With You

Payment: If you are borrowing from a financial institution, you should bring the cheque to show the dealer that you are pre-approved for a loan. You can also bring a personal cheque or a credit card for the down payment if you are financing through the dealer. Dealers vary when it comes to the kind of payments they accept, so be sure to ask them ahead of time.

Driver’s license: If you are planning to drive the vehicle off the lot, then you will need to show the dealer that you are qualified. You may also need the driver’s license to confirm your identity for your cheque, credit card or other form of payment.

Insurance: Since it is illegal to drive a car in Canada without insurance, you need to show the dealer that you have one. If you know which car you are buying, simply call your preferred insurance company and set up the new insurance policy. Alternatively, you can call your insurance company from the dealership and provide your new vehicle identification number (VIN). The company will then email or fax your insurance credentials to the dealer.

Car Delivery

Once you have everything set up, the next step is to obtain the actual vehicle, which means that you have to wait for the dealer to “deliver” it to you. The process usually takes about an hour, but sometimes it can take longer. Weekends can be particularly lengthy due to the bigger amount of car buyers, so it may be better to finalize your deal on a weekday.

Once you see the vehicle, be sure to inspect it thoroughly in order to check if it is in proper condition and contains all the equipment promised. Also take a look at the gas tank – it should be full.

There is a way to speed up the delivery by asking the dealer to bring the vehicle to your home or workplace. If you do that, you will not have to wait for the car or even finalize your purchase at the dealership. Instead, you will be able to do so from the location where you receive the vehicle.

Are you a driver under age 25? Are you the parent of a new driver? Then buckle up, because you’re about to head uphill with your car insurance rates. While it’s true that auto insurance rates are higher with a young driver on the policy, there are a few secrets to keeping those rates as low as possible. Follow our survival guide to car insurance so that buying a policy for the first time or adding a teen to your existing policy won’t be so scary after all.

UNDERSTAND THAT YOUR RATES WILL INCREASE

Teens and young adults are considered to be “inexperienced drivers” by insurance agencies until they turn 25 years old. And because agencies are assuming more risk with an inexperienced driver, they charge more to have that driver on the policy.

If you’re a parent, it’s hard to say just how much your insurance will increase with a teen driver because so much of it depends on individual circumstances. According to an AllState agent who spoke with Aceable, for some people, adding a teen to their insurance only increases it by a few hundred dollars, while for others, the cost of the policy can triple. Meanwhile, if you’re under age 25 and buying car insurance for yourself, the price is almost guaranteed to be higher than it would be for someone older. That’s why it’s crucial to compare policies and find out which agency will give you the best discount.

KNOW WHEN TO ADD YOUR TEEN TO YOUR POLICY

It’s tricky to know when to add your teen to your insurance policy because it differs by state as well as agency. For the most part, however, you won’t need to list your teen as a driver on your policy until they get their license. It’s a good idea, though, to notify your insurance agency as soon as your teen gets a learner permit. This way, in the event of an accident, you’ll know if they’re covered by your policy.

CONSIDER SWITCHING INSURANCE AGENCIES

Adding a new driver to the family brings about many exciting changes. (Less carpool duty for you, hopefully.) During this time of change, you might also consider changing insurance agencies to better suit your needs. Your current agency might not be the most affordable option, and in fact, it might actively be using pricing to get rid of you! Even if you’ve been with the same insurance company for years, now might be the perfect time to shop around.

USE AN AGGREGATOR TO SHOP AND COMPARE PLANS

An online aggregator for insurance companies is the fastest, easiest way to compare policies. There are several available to you.

LOOK FOR EXTRA DISCOUNTS

With a young driver on an insurance policy, you’ll want to scrounge up any discounts that you can. Check with your insurance agent for discounts related to: taking a defensive driving course, making good grades, driving a fuel-efficient car and more. 

Feeling a little more sure of yourself when it comes to car insurance? Good. Trust us: This process is way less scary than you think. And if you do need help, remember that Aceable is here for you every step of the way!