Car maintenance plan, service plan, and warranty: What are the differences?

When you buy a car, it may come with a maintenance plan, service place, and a warranty. But do you know the difference between these?

We define these concepts and outline how they will benefit you. We also consider the role of car insurance, and what your options are when selecting this.

Tip: Make sure your car is protected if you land up in an accident – get car insurance.

Defining car maintenance, service plans, and warranties

Kgodiso Mokonyane, head of strategy at Discovery Insure, often has clients enquire about the differences between a car maintenance plan, service plan, and warranty.

She outlines the distinguishing features of each.

1. Service plan

This covers all the costs involved with the regular, specified servicing of your car as per the manufacturer's guidelines. They are typically produced in a service schedule for your specific car’s make and model, for a specific service interval, which may vary by distance driven or time elapsed.

“Some items have to be replaced, while others need to be inspected first and may or may not be replaced, depending on their condition,” Mokonyane says. “The service plan will typically cover the cost of labour and the replacement or inspection of the items, such as oil, brake fluid, and spark plugs.”

2. Maintenance plan

“This is a plan that covers everything included in a service plan and, in addition, the replacement of components damaged or worn out through the wear and tear of your car. The additional components typically include the battery, brake pads, and clutch,” says Mokonyane.

3. Warranty plan

This plan covers you against an unexpected mechanical breakdown or electrical failure of your car’s critical components. The plan will typically cover the cost of labour and the replacement of covered components such as the engine, clutch, and cooling system.

“In order to distinguish whether a component would be covered under a maintenance plan or a warranty plan, we would need to understand the cause of the need to replace that component,” says Mokonyane.

For example, she says that a clutch that needs replacement as a result of the general wear and tear of the car would be covered under the maintenance plan. However, if the clutch breaks unexpectedly due, for example, to a fault in manufacturing, then it would be covered under the warranty plan. The cause of the failure of the component determines which plan will cover it.

“Usually, the car would need to be taken to a dealership that is in a network in order for you to use these plans,” says Mokonyane.

“It’s important to note that not all service, maintenance, or warranty plans are the same. You need to inspect the details in order to understand which components you are covered for, limits on distance and vehicle age, and what is required of you in order to continue enjoying cover,” she explains.

READ MORE: How to keep your vehicle safe while you’re out on the road

So, what does insurance cover?

Desmond Wood, senior manager at Dotsure.co.za, says that a warranty, service, or maintenance plan complements car insurance and can’t be used as a replacement for car insurance.

“You can think of it as cover for internal versus external risks,” Wood says. A warranty, service, or maintenance plan covers the car’s internal mechanics, while car insurance will cover external risks like accidental damage, theft, fire, or third party.”

You can, however, buy a policy to extend the manufacturer’s warranty on all the vehicle’s working parts, says Karabo Kopeka, head of claims at MiWay Insurance. “This will protect you against the risk of a major breakdown,” he says.  

He explains that vehicle insurance comes in various forms:

• Comprehensive: This provides the widest cover, including theft and hijacking, damages due to an accident, fire or explosion and natural disasters like hail and floods. Comprehensive insurance cover also includes damage to the vehicle’s windows, and liability to other parties because of an accident, as well as malicious damage to your vehicle.
• Third party, fire and theft: This covers your vehicle only against theft, fire-related damages and damages caused to another vehicle during an accident. Other damage to the insured vehicle is not covered.
• Total loss: This covers the vehicle only when it is written off, stolen or hijacked. If damage is incurred that does not lead to total loss, it is not covered.

Kopeka suggests paying careful attention to the benefits offered by different insurers. He recommends asking the following questions before settling on an insurer:

• What is the insurer’s reputation for customer service, and can you manage your policy online?
• How user-friendly is the claims process, and how quickly does the insurer pay?
• How easy is the excess structure to understand?
• Is 24-hour roadside emergency service offered? Another big benefit is a drive-home service.

“Insurance is vital in mitigating risk while service plans, maintenance plans and warranties are designed to make it more affordable to keep the vehicle on the road,” Kopeka concludes.

You can get a car insurance quote by filling in the form on this page.