Guide to Auto service contracts

5 Types of Repair Agreements When you buy a VSC or other repair agreement, a company becomes legally obligated to pay for covered repairs to your vehicle. (The vehicle could be a car, Motorcycle, ATV or boat.) The company that has this obligation is called the “obligor.” There are different kinds of obligors, and some obligors are better in certain ways than others. If you are thinking of buying, or have already bought a repair agreement, it is essential to know whom the obligor is, what laws the obligor must follow, and what your rights are. The laws and your rights depend on the type of obligor. . Repair agreements are referred to by different names: auto service contract, vehicle service contract, extended service contract, extended warranty, vehicle service agreement, mechanical breakdown insurance, and others. Regardless of what a repair agreement is called, there are only three main types of repair agreement you can buy. Each type has a different kind of obligor. They are: • VSCs in which the obligor is a special type of company called a “vehicle service contract provider.” (For the rest of this Guide, we will refer to vehicle service contract providers as VSCPs .) • VSCs in which the obligor is a dealer who sells a car, motorcycle, ATV or boat. We call these “dealer-obligor contracts.” When we refer in this Guide to “car dealer,” understand that the dealer may also be a motorcycle, ATV or boat dealer. • Mechanical Breakdown Insurance . For the rest of this Guide we will refer to mechanical breakdown insurance as MBI .)