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Vehicle Service Contracts (VSC)

Lending

A Vehicle Service Contract (VSC) is an optional agreement that helps pay for the repair or replacement of specified vehicle components following a covered mechanical or electrical breakdown. Coverage varies by contract and may include parts, labor, roadside assistance, rental vehicle reimbursement and other benefits, subject to the agreement’s terms, conditions, limitations and exclusions.

Vehicle Service Contracts help vehicle owners manage unexpected repair costs beyond or alongside the manufacturer’s warranty.

Why it matters for financial institutions

Vehicle Service Contracts enhance auto lending programs by helping borrowers manage repair expenses that could disrupt their budgets or affect their ability to make loan payments. For financial institutions, offering VSCs can improve the borrower experience, support vehicle value, strengthen customer relationships and generate non-interest income.