Mechanical breakdown insurance (MBI) is a car insurance add-on that covers failure of major vehicular systems, like your engine and transmission. Mechanical breakdown insurance is similar to an extended warranty from a car manufacturer, but it provides coverage for more systems. MBI is worth it if you’re buying a new car, as large non-collision repairs on new vehicles can be very costly and are usually covered only by extended warranties or MBI, not standard insurance policies.
Standard insurance policies, on the other hand, provide coverage for damage that occurs due to collisions, vandalism or unforeseen hazards, such as hail storms or floods. So, if you’re looking for insurance that will cover any major breakdown repairs your car might need, you will have to choose between purchasing MBI and an extended warranty.
Purchasing mechanical breakdown insurance is generally more cost-effective than buying an extended warranty. MBI costs about $100 a year for coverage. Additionally, you’ll pay your deductible whenever you submit a claim for car repairs. Most MBI deductibles are about $250.
What Mechanical Breakdown Insurance Covers
- Engine
- Drivetrain
- Transmission
- Brakes
- Exhaust
- Power system
Some policies also cover steering, air conditioning, and the car’s fuel system.
What Mechanical Breakdown Insurance Does Not Cover
- New filters
- New spark plugs
- New brake pads
- New tires
- Adding fluids (coolant, oil, wiper fluid, etc.)
- Other major repairs categorized as normal maintenance
Is Mechanical Breakdown Insurance Worth It
If you’re buying a new car, mechanical breakdown insurance is less costly than an extended warranty. You pay a few hundred dollars a year for MBI, compared to a few thousand dollars for the warranty. You will also still get the peace of mind that comes with knowing any major issues will be taken care of. However, MBI deductibles are higher. So, you’ll end up paying more with an MBI if your new car breaks down frequently.
Another way to decide if you should get MBI is to consider how long you want to drive your car. If you plan to drive it for multiple years, getting mechanical breakdown insurance is a smart choice. MBI will help ensure that your car stays fully functioning for years to come.
If you’re still on the fence, check out the comparison table below to see the pros and cons of mechanical breakdown insurance versus extended warranties. If you want more information, check with one of the insurance companies listed below to see what kind of policy they can offer you.
Mechanical Breakdown Insurance vs Extended Warranty
| Mechanical Breakdown Insurance | Extended Warranty | |
|---|---|---|
| Eligible vehicles | Used cars with fewer than 15K miles | New cars and some used cars from dealerships |
| Coverage limit | 7 years or 100,000 miles | 2-7 years |
| Payment schedule | Pay as you go | Pay for all coverage up front |
| Up-front cost | About $100/year | $1,000-$3,000 |
| Deductible | Typically $250 | $0-$250 |
Where to Get Mechanical Breakdown Insurance
You may be able to get mechanical breakdown insurance from your current car insurance company. Many insurance companies offer mechanical breakdown insurance for a new car or a used car with fewer than 15,000 miles.
Best Car Insurance Companies with Mechanical Breakdown Insurance
- GEICO
- USAA
- 21st Century
- Mercury
- Endurance
- PMC
Once you have coverage, you can submit an MBI claim to your insurance company if your car has a major system issue. After your claim is approved, you can go to a mechanic of your choosing. All you need to pay is your deductible, and your insurance company covers the rest.