What's the difference between a maintenance plan and a service plan?

Every vehicle owner knows the importance of keeping their wheels in good repair to avoid breakdowns, but it can be confusing to know the difference between a maintenance and a service plan for vehicles — and what is exactly right for you. 

In light of this, Budget Insurance offers you this blog to help you choose the right method for maintaining your vehicle. Once you’ve read it, you’ll be clear about how a maintenance plan differs from a service plan.

Armed with that knowledge, you’ll be able to make a better-informed decision about the right choice for you.

Maintenance plan vs service plan

A simple explanation is that a vehicle maintenance plan is insurance that covers your vehicle’s regular servicing and includes wear and tear and mechanical failures. When you have it, you don’t have to pay to service your vehicle with out-of-pocket cash.

A maintenance plan covers you for a limited duration expressed in the total mileage covered or the age of the vehicle from when it was bought new.

On the other hand, a car service plan covers your vehicle for normal services stipulated by the manufacturer of your vehicle — minor and major services. A minor service includes the replacement of spark plugs, oil filters, fuel filters and inspecting the vehicle for major issues. Whereas a major service may include the replacement of the timing chain in addition to regular tasks like filter changes.

However, a service plan doesn’t cover the replacement parts worn out in the regular everyday use of the vehicle, such as brake drums or pads. You don’t have to worry about paying for the replacement of those parts; labour costs are covered as well. A service plan covers only specified serviceable parts (such as oil, oil filters, fuel filters and spark plugs).

Based on the information above, a maintenance plan is generally seen as a better version of a service plan. Which do you think is better for you? Before you decide this, however, you need to be clear about whether you should have a service plan or a maintenance plan at all.

Are vehicle service and maintenance plans worth it?

The answer to this question is complex because no one knows what vehicle damages you could face in the future. There is definitely no one-size-answer-fits-all! Many variables come into play to figure out if a service or maintenance plan is worth having.

For example, road conditions and driving behaviour influence how quickly you’ll need to replace some parts. Someone who drives mostly on gravel roads may need to change fuel filters faster than the plan requires. So, you can see that there’s no universal answer to the question above.

Now, imagine you don’t have a service or maintenance plan and have to pay cash for a service. Would you be able to afford the labour costs and replacement parts? Perhaps you can today, but will you always have ready cash for this purpose?

If you have a service or a maintenance plan, the fees may be bundled up with your monthly payment. This means that you won’t have to worry about escalating labour costs and prices of replacement parts. All you pay is a single, fixed amount if you’ve opted for a fixed interest rate. 

For more on figuring out whether getting a service or maintenance plan is worth it, read the next section.

Pros and cons of car service and maintenance plans

Both a maintenance plan and a service plan have pros and cons. Knowing these will help you make an informed decision when making a choice.

Pros and cons of a car service plan

The pros of a service plan include

• You can buy it upfront or pay for it monthly, making it easy to plan your budget.

• It’s a convenient method of ensuring that you don’t miss the maintenance of your vehicle, especially if you’ve paid for it upfront.

• It provides regular servicing of your car which maximises its resale value.

The cons of a service plan include

• You’re limited to servicing your vehicle at manufacturer-approved centres only. This means you can’t shop around for better customer service and cheaper prices.

• Some claims may be declined.

• It costs money which adds to your monthly transportation cost.

• You don’t decide what items need to be replaced because the manufacturer has decided this upfront. There are times when some parts may be replaced while they still have useful life.

Pros and cons of a maintenance plan

The pros of a maintenance plan include

●   Payments are fixed, which adds stability to your budget.

●  You can transfer it when you sell your vehicle, which may make selling your car easier.

●  With a prepaid maintenance plan, you may qualify for discounts that make servicing your vehicle more affordable.

●   It is more comprehensive than a service plan.

●  It adds convenience and simplicity to life. You don’t have to worry about when your vehicle’s service will be done as the manufacturer notifies you.

The cons of a maintenance plan include

●      It costs more than a service plan.

●   You have fewer options on approved service centres as the manufacturer may require the service to be performed at the dealership where you bought your vehicle.

●   Generally speaking, it does not cover tyre wear and tear, glass or wheel alignment.

When purchasing a new or pre-owned vehicle, confirm the type of plan that comes with it. You also need to decide whether a service plan or a maintenance plan will serve your needs better.

If you’re buying a vehicle for which the service plan or maintenance plan has expired, you can extend it with your insurance company.

Extended and pre-owned vehicle warranty

Did you know that you can extend the warranty on your new car or buy a pre-owned vehicle warranty? Instead of the manufacturer’s warranty expiring and leaving you exposed, these warranties provide you with the needed protection.

Both of these warranties do not replace your service plan or maintenance plan. They are separate and cover mechanical or electrical failures. You can add them when you purchase a maintenance or service plan.

Extended warranty explained

When you buy a new vehicle, it usually comes with a manufacturer’s warranty. If your vehicle suffers mechanical or electrical failure, you’ll be financially protected.

A manufacturer’s warranty has an expiry date beyond which you’ll not be covered. When it expires, it’s time to consider purchasing an extended vehicle warranty to stay covered. Some of the items that a warranty covers for repairs and replacement include:

●    Engine and its components such as the cylinder head (commonly known as “top”).

●      Braking system such as the master cylinder

●      Manual or automatic transmission

●      Suspension

What is a pre-owned vehicle warranty?

If you’re lucky, you may purchase a pre-owned vehicle that still carries a manufacturer’s warranty. You are allowed to assume the warranty as long as you buy a pre-owned vehicle one and half years after its first registration.

Under any other situation, it’s worth your while to buy a pre-owned vehicle warranty. Like an extended warranty, a pre-owned vehicle warranty covers repairs and replacements of several parts, including those mentioned above.

Get a service plan from Budget Insurance today!

It’s clear that having the right service plan or maintenance plan can save you from financial stress when you face vehicle mechanical or electrical failure. If you have decided to get either of these plans, Budget Insurance is the insurance company to go to. All it takes to get started with getting a service plan is requesting a free and no-obligation online quote. You’ll thank yourself that you did!

The information in this article is provided for informational purposes only and

should not be construed as financial, legal, or medical advice.