A mechanical protection plan is worth it, if you don't want to worry about the cost of paying for repairs out of pocket should your car break down. You can get a mechanical protection plan from auto dealerships, vehicle manufacturers or independent providers, such as Endurance or CarShield.
Other independent providers of mechanical protection plans:
Mechanical protection plans usually cover a variety of parts and systems, such as engine, transmission, and drive axle, among others. What your specific plan covers depends on the option you choose from your provider.
Mechanical breakdown insurance, mechanical protection plans and extended warranties are similar in what they cover, however, they differ when it comes to costs, providers and vehicle eligibility. For example, mechanical breakdown insurance is usually the less expensive version, however it is only offered by insurance companies.
An extended car warranty costs around $1,500. The exact cost of an extended car warranty depends on several factors, including the condition of the car, the car’s mileage, and the amount of coverage included in the warranty.
Factors That Affect Extended Car Warranty Cost
An extended car warranty pays for repairs to a car’s major systems if they malfunction. If you drive an older car or a car with higher mileage, your warranty will be more expensive because your car is more likely to experience mechanical problems. Similarly, the more coverage that you include in your warranty, the more you’re going to pay.… read full answer
How to Shop for an Extended Car Warranty
If you want to purchase an extended warranty for your car, you should get quotes from multiple sources in order to find the best price. You can purchase an extended warranty from your car’s manufacturer or a third-party company, and the pricing is generally the same between the two. However, customer satisfaction tends to be higher for warranties from the manufacturer.
Many insurance companies also offer an alternative to extended warranties called mechanical breakdown insurance (MBI). MBI provides similar coverage and only costs about $100 per year.
No, you do not need mechanical breakdown insurance on a lease. Mechanical breakdown insurance (MBI) is not required on a leased car, and it would only ever make sense to buy MBI if the manufacturer’s warranty is going to expire before the lease term ends.
Mechanical breakdown insurance covers repairs to your car’s main components, such as the engine and transmission. These parts are usually covered by the manufacturer’s warranty, which typically lasts for about three years or 36,000 miles.… read full answer
While the warranty is still in effect, it’s not necessary to pay extra for mechanical breakdown insurance. But after the warranty ends, MBI could save you from having to pay out of pocket to repair your car’s major systems if they stop working correctly.
Before signing your lease, make sure you know when the vehicle’s warranty expires and what relevant stipulations the lease contract includes, so that you can purchase mechanical breakdown insurance if needed. Since mechanical repairs can cost thousands of dollars, mechanical breakdown insurance is a wise investment if the warranty no longer protects you. You can generally purchase it from your dealership or car insurance company if they offer it, and it only costs about $100 per year.
Extended car warranties are worth it if a driver doesn’t carry sufficient savings to pay for vehicle system repairs or is worried about their car’s reliability. But for most drivers, extended car warranties go unused, so the potential benefits are not enough to justify the upfront cost.
A good time to consider the value of an extended warranty is when the manufacturer’s warranty on your vehicle has expired or will expire soon. This typically happens after three years or 36,000 miles, depending on which comes first. If you plan on keeping your car beyond the manufacturer warranty’s expiration, then purchasing an extended warranty might give you peace of mind moving forward.
An extended warranty might also be worth it if you’re concerned about your ability to pay for major mechanical repairs in the future. Car repairs cost about $400 on average, which is less than the $1,500 average for an extended warranty. On the other hand, the least common and most catastrophic mechanical failures can often cost several thousands of dollars to repair.
If your car isn’t very reliable and you’re not in the financial position to risk either paying for repairs or replacing the car yourself, it might be worth it to pay a higher upfront cost for protection through an extended warranty.
When An Extended Car Warranty Isn’t Worth It
Your car is reliable
Your car is not worth very much
Your car is still covered by the manufacturer’s warranty
You have a large enough emergency fund to pay for major vehicle repairs
Bear in mind that you don’t have to purchase an extended warranty when you buy your car. It’s likely a smart move for you to wait until the manufacturer’s warranty is about to expire to evaluate your situation and determine whether you want to pay for an extended warranty. To learn more, check out WalletHub’s guide to the best extended car warranties.
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