While many businesses take pride in purchasing newer-model vehicles, the vast majority of company vehicles tend to be older vehicles.

When the company car or company truck gets old, business owners may want to consider purchasing a vehicle service contract.

Vehicle service contracts allow an individual or company to purchase a contract that will protect them from unexpected vehicle repairs. After all, small businesses that have tight cash flow don't like unexpected expenses, so the ability to prevent an unexpected vehicle repair expense is pretty nice.

As with many purchases made by small businesses, the key in buying a vehicle service contract is to do your homework before you purchase a vehicle service contract.

In researching vehicle service contracts, we found a very good resource for business owners who want to learn more about vehicle service contracts. The Vehicle Protection Association (VPA) was formed to address "extended warranty scams". Extended warranties are a common way that people refer to vehicle service contracts. Technically, it's not the right terminology because a warranty is what you get from the manufacturer. A third-party company cannot literally extend a warranty because it's not theirs to extend.

In any case, the vehicle service contracts industry suffered from the actions of a few bad actors in the 2008-2009 timeframe and that led to the formation of the VPA. They've got tons of information on vehicle service contracts. For example, here's their list of frequently asked questions about vehicle service contracts:

• What is a vehicle service contract?
• How does a vehicle service contract work?
• Why do I need a vehicle service contract?
• What does a vehicle service contract cover?
• What is an extended warranty?
• A warranty came with my car when I bought it. Why do I need a vehicle service contract? Isn't my car covered by the original warranty?
• What happens if I sell my car? Is my vehicle service contract transferrable?
• Can I purchase extensions and upgrades to my vehicle service contract?
• What vehicle upkeep am I responsible for in order for my service contract to remain valid?
• Where can I take my vehicle for repairs?
• If I get a vehicle service contract, can I still work with my local mechanic?
• Do I have to pay for my vehicle service contract in full at the time of purchase?
• What if I want to cancel my vehicle service contract?
• Can my claim amounts exceed the amount of money I paid for my vehicle service contract?
• How are vehicle service contract claims paid?
• What happens to the money I pay for my vehicle service contract?
• What should I look for when considering purchasing a vehicle service contract?
• How does a vehicle service contract deductible work?
• Why should I buy a vehicle service contract now? Especially if I still have a manufacturer's warranty.
• Are auto manufacturers involved with the creation and sale of vehicle service contracts?
• What's the difference between a vehicle service contract and a manufacturer's warranty?
• Will purchasing a vehicle service contract subject me to telemarketers and mailings from companies that may not be reputable?
• How does the Vehicle Protection Association (VPA) ensure that I, as a consumer, am protected from fraud, false advertising, or other exploitive practices?
• Does the VPA provide a list of trusted organizations and businesses?
• Who can I contact if I have a problem with my automotive service contract or its provider?

The questions above are a great primer on vehicle service contracts. Remember, this can be a great investment for a business that has company cars or company trucks, but you absolutely need to do your homework before you choose a provider to work with.