Mercury Extended Warranty Review

Extended car warranties are worth it if you don't have enough savings to pay for repairs to major systems in your car, like the engine, or you're worried about your car's reliability. But for most drivers, extended car warranties go unused, so the potential benefits are not enough to justify the upfront cost.

Below, we'll lay out the major advantages and disadvantages of paying for an extended car warranty to help you make the right decision for your situation.

Pros and Cons of Extended Car Warranties

Pros

Coverage for expensive mechanical issues: Extended warranties cover repairs to your vehicle's major mechanical systems such as the engine, transmission, gaskets and axles.

Peace of mind: If you're worried about your car's reliability, an extended warranty will make it less likely that you'll have to pay for expensive mechanical repairs to your vehicle. This could help calm your nerves a bit.

Could extend the life of your vehicle: Since important components of the vehicle can be replaced with an extended warranty, you might be able to keep your car for longer.

Cons

Limitations on vehicle repairs: Certain parts of your vehicle may be excluded from the extended warranty. You may also be limited in terms of which repair shops you can take your vehicle to.

You might never use the coverage: One of the reasons to invest in an extended warranty is to save money on expensive repairs. However, reports show only around 1 in 10 people who purchase an extended warranty actually use it.

May have a waiting period: Some extended warranty companies may have a waiting period of 30 days or 1,000 miles before you can make a claim, though the waiting period varies between companies. 

Should I Buy an Extended Car Warranty?

Car repairs cost about $550 on average, which is less than the $5,000 you could pay for an extended warranty. As a result, an extended warranty is not worth the cost for most people.

If your car is reliable, not worth very much, or still covered by the manufacturer's warranty, you don't need to rush into purchasing an extended warranty. Similarly, if you already have enough money in an emergency fund to pay for major vehicle repairs, then you probably don't need to invest in an extended warranty that you might not use.

On the other hand, catastrophic mechanical failures can cost several thousand 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 to Buy an Extended Car Warranty

You don't have to purchase an extended warranty when you buy your car. It's likely a smart move to consider the value of an extended warranty 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.

To learn more, check out WalletHub's guide to the best extended car warranties. 

What Is Mechanical Breakdown Insurance?

Mechanical breakdown insurance is an optional type of insurance that provides coverage for the major systems in your car, like the engine and transmission, which are not covered by standard car insurance policies. Mechanical breakdown insurance (MBI) is similar to an extended warranty but provides more coverage. It is sometimes referred to as car repair insurance.

With mechanical breakdown insurance, you can submit a claim to your insurance company if your car has a major system issue. Once your claim is approved, you can go to a mechanic of your choosing, and all you need to pay is your deductible. Your insurance company will cover the rest.

View entire answer

Yes, Mercury offers a type of extended warranty. Mercury's extended warranty program is called Mercury Mechanical Protection, and it covers repairs to the engine, transmission, drive axle, and brakes, among other things after the manufacturer's warranty has expired. The cost of Mercury's Mercury Mechanical Protection varies depending on the vehicle, but it averages about $800-$9000 for a 3-7 year term, depending on make, model, year and mileage.

In general, extended warranties are meant to...