Points of sale at the car dealership or robo calls asking you to pay for an extended warranty are what consumers are most used to.

Meanwhile, traditional insurance is mainly for collisions, but what happens if a belt breaks or you press the “start” button and nothing happens? That’s where a new startup wants to change the way you take care of your car.

Applicable name, CarmaCare launched its own “Health Care for Your Car” subscription service three months ago to pick up where traditional auto insurance leaves off and provide an easier way to buy extended warranties.

Founded in 2021 by Jonathan Palan, who previously founded AutoFi and served as an executive at LendingClub and Kiavi, the company is now backed by $4.5 million in new funding raised in late 2022.

In addition to the funding, the company announced it has a new CEO, Jamie Ahern, who previously worked at LearnVest and was a former chief operating officer of Kin Insurance.

CarmaCare innovates in the Auto warranty and service contract industry worth $35 billion which Ahern described as “predatory in nature.”

“Wear failures are 15 times more likely, but insurance is not designed to deal with it, creating a huge need to deal with it,” Ahern told australiabusinessblog.com.

This is how CarmaCare works: Vehicle service plans work by reducing the cost of repairs due to mechanical breakdowns and also include roadside assistance and unexpected breakdown support. Users can choose between a $100 and $250 deductible for covered repairs, including, for example, replacement parts and powertrain, electronic, and mechanical components.

Users also have access to the “Virtual Garage” feature, which Ahern says can provide repair triaging and impartial opinions on the cost of needed repairs. With interest rates on both new and used cars rising amid inflation, he said this is more of an incentive for someone to keep their existing car on the road longer.

“People are often afraid to take their car to the shop because they feel they are being taken advantage of,” Ahern said. “Virtual Garage is like ‘TeleDoc for your car’, and now that most people have technology-connected cars, an experienced mechanic can often tell what’s going on and give estimates. Now when you go to the garage you can tell them what the problem could be and the estimate so if the mechanic calls you something much higher then you have information to help.

The capital injection was led by Inspired Capital and included Twelve Below, Revelry and 81 Collection. The company plans to invest in its product and technology team as well as customer acquisition strategies and the hiring of underwriters and data scientists.

“With nearly half of Americans going into auto repair debt, the need for a customer-friendly company like CarmaCare has never been greater,” said Mark Batsiyan, partner at Inspired Capital, in a written statement. “Both Jonathan and Jamie are seasoned operators who deeply understand the consumer’s need for a better solution.”

Meanwhile, the company is still in its infancy. It has some revenue, but since the product launched three months ago, Ahern declined to disclose growth metrics other than saying “early traction has exceeded expectations.”

CarmaCare is currently direct-to-consumer, but Ahern said there are opportunities to pursue in B2B2C, and the company is in discussions with businesses and other partners. It is also seeking a small debt facility to begin financing customers and other new products.