Mechanical Breakdown Insurance For Used Cars

Key Points:

• Mechanical breakdown insurance is a rare type of insurance policy similar to a vehicle service contract or extended car warranty.
• Extended car warranties offer more coverage options and pricing flexibility than mechanical breakdown insurance.
• Our team recommends exploring coverage options from several extended car warranty providers, including Endurance and Carchex.

If you buy a new car, your vehicle is protected under a factory warranty (also known as a manufacturer’s warranty) for a specific number of years or miles, typically 3 years/36,000 miles. But once your car passes the time or mileage threshold, whichever comes first, you’re fully responsible for most or all repairs to your vehicle.

In this article, our review team discusses what mechanical breakdown insurance is, what it covers, and whether mechanical breakdown insurance is available for used cars. We’ll also take a look at a popular alternative to mechanical breakdown insurance–an extended car warranty. Finally, to help get the quotes process started, we’ll discuss our picks for the best extended car warranty companies to work with.

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What Is Mechanical Breakdown Insurance?

Mechanical breakdown insurance (MBI) is a special type of car insurance policy that covers car repair costs due to mechanical failures in your vehicle, not accidents or natural disasters. Contrary to popular belief, comprehensive coverage does not include mechanical breakdown coverage. MBI plans are offered by insurance companies as optional add-ons, also known as riders, to your auto insurance policy.

What Does Mechanical Breakdown Insurance Cover?

MBI coverage typically includes needed repairs to major components of your vehicle, including your vehicle’s electrical and powertrain components. An MBI policy may also cover costly repairs to your vehicle’s steering, suspension, cooling system, and climate control systems.

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Does My Used Car Qualify For Mechanical Breakdown Insurance?

If your car is used, you probably don’t qualify for mechanical breakdown insurance. A mechanical breakdown insurance policy is typically only available for drivers of new vehicles. Right now, the only major car insurance provider that offers MBI is Geico, and it’s available exclusively to leased or new cars that are less than 15 months old with fewer than 15,000 miles.

You may see other reviews claiming that providers such as USAA, Allstate, AAA, Mercury, and 21st Century offer MBI. While some of these insurers used to offer breakdown insurance, they no longer do. You may also see that Mercury still offers mechanical protection as an add-on, but it functions more like an extended car warranty than MBI, since it has multiple coverage tiers and is available for both new and used cars.

If your car is new enough to qualify for Geico’s mechanical breakdown insurance, keep reading to learn more about the cost and coverage of MBI. If your car is older and doesn’t qualify, we recommend considering an extended auto warranty, also called a vehicle service contract.

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What Does Mechanical Breakdown Insurance Cost?

The cost of mechanical breakdown insurance coverage depends on a variety of factors related to your vehicle and car insurance provider. 

Here are factors that will determine the pricing of your MBI policy:

• Age of the vehicle
• Mileage of the vehicle
• Buying from a dealership versus a third-party provider
• Vehicle make and model
• Level of coverage
• Number of high-tech components in the vehicle
• Driving habits and routine vehicle maintenance

MBI coverage costs will be added to your existing full coverage or liability policy.

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Pros And Cons Of Mechanical Breakdown Insurance

There are advantages and disadvantages to owning an MBI plan. In many cases, it’s better to purchase an extended warranty than mechanical breakdown insurance.

Below are some pros and cons of purchasing an MBI policy.

Pros

• No down payment: Extended warranty companies sometimes require a sizable down payment for coverage, and MBI policies usually don’t. However, our review team found that leading extended warranty providers like Carchex may be willing to waive down payments.
• Work with your insurance provider: If you like your current car insurance company and they offer MBI, you can simply work with them to add mechanical breakdown coverage to your policy. This will save you time researching extended warranties, which aren’t sold by insurance companies.
• Regulated by the government: Since MBI is sold as an insurance product, it’s  monitored and regulated by a car owner’s state government. Therefore, the rates charged for these policies may be lower in some cases than the rates for an extended warranty.

Cons

• Limited choice of providers: Since MBI policies are sold as optional add-ons to your auto insurance policy, you have to purchase them from the company that provides you with auto insurance.
• Restrictions: Many MBI policies come with strict mileage and age restrictions, meaning they won’t be available for used vehicles. Extended warranty companies typically offer plans for older and higher mileage vehicles.
• High deductibles: The deductibles on MBI plans are generally much higher than deductibles offered by extended car warranty companies, which means higher out-of-pocket costs for covered repairs. This may be due to greater competition among extended car warranty companies. For example, Geico’s MBI deductible is $250, while the highest deductible offered to our review team when examining top extended warranty companies was $100.

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Mechanical Breakdown Insurance vs. An Extended Car Warranty

Whether or not you should purchase mechanical breakdown insurance depends on your individual situation. In general, our review team believes that extended warranties are a better choice because of their lower deductibles, customizable coverage for vehicle repairs, range of provider choices, and added peace of mind.

Neither MBI coverage or extended car warranties typically cover routine maintenance or wear and tear. For this reason, you’ll need to budget for maintenance items like brake pads, oil changes, spark plugs, filter changes, and other tune-up items.

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Our Recommended Providers

If you believe an MBI is the best fit for you, we recommend getting an insurance quote from Geico. For those who believe an extended warranty may be the better fit, we recommend requesting a free quote from Endurance and Carchex.

You can read more information about these three top providers below.

#1 Endurance

Endurance, which offers direct-to-consumer extended service plans, was named our Best Overall provider for the following reasons:

1. Covers automobiles with high mileage: Endurance offers extended warranties to automobiles with 200,000+ miles. This mileage rate is much higher than most other providers.
2. Outstanding reputation: Endurance appeared on the 2019 Inc. 5000 list as one of the fastest growing companies in the U.S. It also received a 2019 Stevie Award as a “Great Employer” for its top-notch employee benefits and is a Gold Member of the Vehicle Protection Association.
3. Strong industry partnership: Endurance holds a prestigious partnership with Andretti Motorsports, one of the most successful auto racing companies in the world.

Learn more in our Endurance review.

#2 Carchex

Carchex has proven itself to be a great provider for these reasons and more:

1. Strong industry partnerships: Carchex partners with industry leaders such as Edmunds.com, Kelley Blue Book, and Carfax. These partnerships are a strong sign that Carchex is a leading extended warranty provider.
2. Excellent reputation: Carchex is an eight-time Inc. 5000 Hall of Fame honoree and was named a Top Workplace by the Baltimore Sun for seven consecutive years. The company also boasts an A+ BBB rating.
3. Most affordable among leading providers: Our review team received sample quotes on a vehicle from the top providers in the industry and Carchex was among the most affordable extended warranty providers.

Learn more in our Carchex review.

Deciding Between Endurance and Carchex

If you’re planning to buy an extended warranty from Endurance or Carchex, but you’re not sure which provider to choose, we recommend the steps below to help you make a decision. Good luck on your search.

1. Receive a quote from each provider and compare their costs.
2. Read our Carchex vs. Endurance article to see how the providers compare.
3. Receive a sample contract from each and compare their coverage details.

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Mechanical Breakdown Insurance For Used Cars: Our Take

Geico is one of the largest insurance providers in the country and is the only provider we’ve found that offers mechanical breakdown insurance. For most drivers, an extended car warranty from a reputable company will provide the best emergency breakdown coverage.

If you’re considering mechanical breakdown insurance from Geico, our team recommends comparing coverage and costs against an extended car warranty from Endurance or Carchex.

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Mechanical Breakdown Insurance For Used Cars: FAQ

Below, we cover some of the most frequently asked questions about mechanical breakdown insurance for used cars:

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How We Rate Car Warranty Companies

Our review team extensively researches extended car warranty providers to deliver informed and unbiased assessments of leading companies. We evaluate several key rating factors that are important to consumers to determine which providers are the best in the industry:

• Reliability: Warranty providers that earn strong ratings from the Better Business Bureau (BBB), work with reliable partners and administrators, and have a long history in the warranty industry score well in this category.
• Coverage Plans: We take a close look at the coverage plans available through each provider, including how many are offered, maximum term limits, plan exclusions, and more. We also evaluate the added benefits companies include with their warranty plans, such as roadside assistance and trip interruption benefits.
• Pricing: Our team performs a secret shopper analysis for a variety of vehicles and coverage plans to get a sense of a provider’s average costs. We see how each company’s pricing, deductible options, and discount opportunities compare to competitors when determining this score. 
• Transparency: We evaluate the availability and transparency of each company’s contracts, as well as whether each provider offers a money-back guarantee.
• Customer Experience: We consider customer reviews and complaints from sites like the BBB and Trustpilot. Our team also reaches out to customer service reps during our secret shopper analysis to get a sense of the customer experience with each company.

*Data accurate at time of publication.

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