Maintenance Plans vs Service Plans: What’s the Difference?

Having comprehensive car insurance as a driver in this day and age is as much a necessity as the vehicle itself. Responsible vehicle owners understand that car insurance is as important as having a valid driver's license. The need for comprehensive car insurance has grown exponentially over the years. While having great car insurance in place does give you the necessary peace of mind, it may not be enough to cover all the financial implications that come along with owning a car. For the first-time vehicle owner, this statement may be confusing - you are most likely wondering what that statement means and how it impacts you financially? Well, let’s start with the basics.

It is important for any person accepting an insurance policy to fully understand the agreement between themselves and their insurers. While your car insurance does cover your vehicle in the event of theft, accidental damage, or loss, Reading the fine print on your insurance agreement will save you money and headaches. With that said, here is the lowdown on service and maintenance plans for vehicles. To better understand the difference between maintenance and service plans, it is important to know what your car insurance covers. Here is a list of typical insurance types and what it covers.

Car Insurance And Different Types Of Cover

  • Comprehensive Car Insurance - This type of vehicle insurance provides a broad range of cover including hijacking, theft, hail, flooding, and fire. Comprehensive car insurance also provides liability cover in the event of accidental damage.
  • Third-Party Only - While third-party insurance pays out in the event of damage to the property of another person, your car is not covered should you have only third party cover..
  • Third-Party, Theft, And Fire - Unlike third-party only insurance, this type of car insurance provides cover for your vehicle in the event of a fire or theft as well as damage to another persons’ vehicle.
  • Total Loss Insurance - Provides cover specifically for write-offs caused by an accident or hijacking or theft (where the vehicle is not recovered) as well as third-party liability cover. Accidents / damage not resulting in total loss or write-off are not covered.

The purpose of car insurance is to provide financial cover in the event of loss, theft or damage to either your car or another person’s car. Car insurance does not cover routine repair checks, wear and tear maintenance or even mechanical breakdowns, making car repair warranty plans a necessary added feature to vehicle insurance.

Now that you have a basic understanding of what insurance covers, the types of cover, and the general maintenance and service exclusions, it will be easier to understand what a car maintenance plan is and why it is needed. 

What Is a Car Maintenance Plan?

A car maintenance plan is more comprehensive than a service plan. It covers both the labour and expenses of parts while also providing cover for wear and tear replacement items such as fuses, wiper blades, and brake pads. A vehicle maintenance plan also covers mechanical components such as the gearbox, engine, and exhaust system. Windscreens, alignment, and tyres are not covered in maintenance plans.

What Are The Benefits Of A Maintenance Plan?

  1. Fixed and affordable monthly premiums for regularly scheduled vehicle maintenance.
  2. Specified item wear and tear cover.
  3. Qualified technicians and professional service.
  4. Remain unaffected by the ripple effect of inflation on labour and parts cost increases.

A maintenance plan differs from a service plan in that it provides cover for the more important and costly replacement parts of the vehicle. A service plan, on the other hand, is somewhat different.

What Is A Vehicle Service Plan?

A service plan covers the cost of regular services on your car as specified by the vehicle manufacturer. In essence, a service plan pays for the servicing of your car - either on an annual basis or according to the vehicle manufacturer's mileage requirements. Service plan lengths are generally stipulated by the manufacturer and the cost of the plan is affected by the make and model of the vehicle, with luxury and sports vehicle owners paying more for service plans. Replaceable items on your car that are predetermined by the manufacturer to keep your car running perfectly such as oil, air filters, and spark plugs form part of the service plan. Other items included in the service plan are cam belts, brake fluid, and coolant. Labour is also covered in a service plan.

While many perceive a service plan to be comprehensive, the reality is that a service plan is not enough to safeguard you against the financial strain that comes with owning and maintaining a vehicle. For example, here is a list of general service plan exclusions.

What Does A Service Plan Not Cover?

  1. Accessories, electrical wiring items, wheels, wheel alignment, tyres, and all glass such as windshields and car windows.
  2. Paint and bodywork brought on by standard wear and tear.
  3. Maintenance and repair work caused by abuse and misuse of the vehicle, damage caused by an accident, and damage caused by negligence.

These are only a few exclusions and service plans should be read through carefully for a thorough understanding of how the plan works, what it covers, and what the general exclusions are.

What Are The Benefits Of A Service Plan?

  • A service plan assists vehicle owners to ensure that the future services of their car are taken care of in advance and helps avoid budget interruptions that may take months to recover from. Service plans also help drivers avoid car breakdowns and additional towing fees.
  • Every driver will attest to the driving pleasure of an efficiently running car. A fully serviced vehicle is a pleasure to drive and costs less to maintain in the long run.
  • A well-looked-after vehicle that is regularly serviced can be sold at a higher value because the vehicle is in good condition and has an up-to-date service history.
  • Parts on your car will be replaced with components specific to the make, model, and chassis number of the car.
  • The final and most important benefit is that a service plan will not only provide you with peace of mind but with great driving experiences and many unforgettable road trip memories.

What Are The Disadvantages Of A Service Plan?

  • A service plan provides cover for serviceable parts only.
  • A service plan could limit your services to approved centres only.
  • A service plan does not provide cover for the wear and tear of parts.

Service plans are a good addition to comprehensive car insurance as it allows for a broader range of financial cover for your vehicle. With the basics of service and maintenance plans for vehicles covered, here are a few more terms as well as their explanations that will serve you, the driver well and possibly save you some money by providing you with the necessary information to make the best motor plan decision.

Because of certain restrictions placed on vehicle owners by car manufacturers in terms of service plan agreements that limit scheduled services to approved centres and the many complaints received thereof, the Competition Commission has announced a new set of guidelines. These guidelines will have a major effect on vehicle manufacturers and car owners alike. These changes are set to take place as of 1st July 2021.

The new stipulations put in place by the Competition Commission can be considered a win for the motor insurance industry, the client as well as the car manufacturer by allowing each of them to make the best possible decision regarding cover, service centres, and motor plans.

That brings us to our next topic of discussion, prepaid maintenance plans. While the term is not unfamiliar, there are a few subtle differences. Let’s have a look at prepaid maintenance plans, how they work, and what they cover.

Prepaid Maintenance Plans - What Are They And How They Work

Generally, a prepaid maintenance plan is offered by the vehicle manufacturer and provides cover for routinely planned vehicle services as stipulated by the manufacturer manual. A prepaid car maintenance plan is usually offered by dealerships selling second-hand cars or for new cars that do not have factory-backed maintenance plans. Here are a few benefits as well as a few disadvantages of having a prepaid maintenance plan.

Benefits Of A Prepaid Maintenance Plan

  • Eases the financial impact of having regular maintenance carried out on your vehicle.
  • No price increases because maintenance costs are fixed.
  • No delays on maintenance schedules, keeping your car maintenance history up-to-date.

Disadvantage Of A Prepaid Maintenance Plan

  • Your vehicle will be restricted to scheduled maintenance at the dealership where the vehicle was purchased from.

Prepaid maintenance plans may not suit the needs of all vehicles and it is therefore recommended that car owners do the necessary research and ask relevant questions before purchasing any form of motor plan insurance.

With all these options available to vehicle owners, it is important to note that although they all seem rather similar, there are key differences that separate the plans in terms of what each one covers. Making an ill-informed decision when purchasing a motor plan can cost you more money in the long run and perhaps also leave you vulnerable to unnecessary breakdowns and car troubles.

One way to avoid such troubles is to purchase an extended warranty. Let’s break down what an extended warranty covers, no pun intended, of course.

Extended Car Warranties - What Are They And How They Work

An extended car warranty is an additional form of insurance that cover the electrical and mechanical components of a vehicle in the event of damage or mechanical failure. The value of the plan taken directly affects the level of cover of the vehicle. While some people choose to purchase an extended warranty when purchasing a new car, others prefer waiting just until their service or maintenance agreement is up.

What Do Extended Warranties Cover?

Extended motor plans generally provide cover for expensive and unforeseen repairs such as mechanical breakdowns or electrical failures should they occur during the extended warranty agreement.

What Do Extended Warranties Not Provide Cover For?

Extended warranties generally do not cover scheduled service or maintenance components such as tune-ups, timing belt replacements, and oil changes. The majority of extended warranties also do not cover wear and tear items such as wiper blades and brake pads.  

As with any warranty cover, it is vital to read through and understand the fine print before deciding to purchase. Here are a few tips on extended warranties to help vehicle owners along the way.

Tips For Extended Warranties

  • Extended warranties do not necessarily need to be purchased on the same day as your vehicle. If, however, you are purchasing the car with the help of finance, then purchasing the warranty on the same day is a good idea as the cost for the extended warranty will be included in the loan.
  • Keep an up-to-date service and maintenance schedule as your cover can be affected by breaks in between scheduled service and maintenance.
  • Always check to make sure whether extended warranty plans are a prerequisite for financing, as this may not always be the case.

With all this information, it can be easy to get lost. The key to gaining a deeper understanding of maintenance plans and service plans is to conduct as much research as possible and speak with industry professionals who will help you choose the best-suited motor plan insurance for your vehicle.

Get in touch today with a MiWay consultant to discuss your car insurance and warranty plan options or get an online quote right in the comfort of your home. At MiWay we take care of your insurance needs, leaving you to live your way, spectacularly so!


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