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Best mechanical breakdown insurance

Mechanical breakdown insurance can save you money on costly car repairs

by Kathryn Parkman ConsumerAffairs Research Team
man working mechanics of car

What is mechanical breakdown insurance?

Mechanical breakdown insurance for used cars helps cover the cost of unexpected repairs for transmission issues, brakes, valves, oil pumps and timing gears and electrical systems.

Mechanical breakdown insurance (MBI) does not cover damage caused by a driver or repair damage caused by an accident or normal wear and tear. Make sure that you understand what “wear and tear” mean with prospective providers to avoid any misunderstandings about what your MBI will cover.

Here are some things you should know about MBIs:

  • Coverage varies: The insurer may have multiple plans available with different coverage levels and prices.
  • Most have deductibles: MBI deductibles will vary depending on the policy, but usually range from $0 to $500.
  • Not all vehicles can be covered: Not every company offers MBI, and not every car owner qualifies for MBI. New and used cars are eligible, but MBI usually must be purchased before a car is 15 months old or before 15,000 miles.
  • High mileage policies: Some companies offer high mileage MBIs for vehicles with more than 15,000 miles, though these are not as common.

Where to buy mechanical breakdown insurance:
Some companies, like American Auto Shield and American Auto Protect, offer both extended warranties and mechanical breakdown insurance.

LabelCompany nameLogoContactSummary
Best OverallEndurance Auto Warranty Visit website
  • 24/7 roadside assistance
  • Accepted by dealerships and all ASE-licensed mechanics
  • 30-day waiting period
LabelCompany nameLogoContactSummary
Runner-UpProtect My Car Visit website
  • 24/7 roadside assistance
  • Flexible payment plans
  • 30-day money-back guarantee

Mechanical breakdown insurance vs. extended warranty

MBI is generally less expensive and more flexible. Extended auto warranties require you to take your car to a mechanic within your provider’s network, where you’ll pay upfront and be reimbursed later. Depending on your plan, both may offer extras such as roadside assistance and rental cars.

Extended warranties have a smaller deductible and are often best for high-value, high-mileage cars. Extended warranties don’t cover pre-existing conditions (the typical waiting period of 1,000 miles or 30 days is to be sure you aren’t buying the service only after an issue appears).

Consider the following when deciding between an extended warranty or MBI policy:

  • Payments: Typically you pay for extended warranties at the same time you purchase your vehicle and the cost can be added to your car’s financing. You can often negotiate the price on a warranty plan. MBI payments are made monthly, usually for up to a year, with the option of renewal at the end of the policy period.
  • Warranty or policy supplier: MBI is considered an insurance product and is only provided by licensed entities. Extended warranties may be offered by the automaker or dealership, as well as third-party companies.
  • Repairs: Extended warranties usually require repair services be done at dealerships or approved repair shops. MBI policies usually allow repairs to be made at any licensed repair shop.
 Mechanical Breakdown InsuranceExtended Auto Warranty
Reduces costs on large repairs
Multiple tiers of coverage available
Age and mileage restrictions
Usually kicks in after original warranty expires
Deductible typically required
Transferrable to a new owner
Offered by businesses with Property and Casualty licenses
Provided by auto manufacturer, dealer or third party
Up-front payment required
Monthly payment options

Is mechanical breakdown insurance worth it?

MBIs can be worth it if you want to spread out payments over time or if you prefer to work with an insurance provider. As with any insurance, you might not ever have to use your MBI, but if you do it will save you thousands of dollars. If you know you can’t afford to pay for an expensive mechanical breakdown repair, MBI might be the way to go.

Remember, a salesperson at a car dealership will likely pressure you into buying an extended warranty the same day you buy your car. Don’t let them push you into this decision—you do not have to purchase either an extended auto warranty or mechanical breakdown insurance the same day as your car. Weigh the pros and cons of each option before deciding to buy mechanical breakdown insurance or an extended auto warranty.

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by Kathryn Parkman ConsumerAffairs Research Team

As a member of the ConsumerAffairs Research Team, Kathryn Parkman believes everyone deserves easy access to accurate and comprehensive information on products and businesses before they make a purchase, which is why she spends hours researching companies and industries for ConsumerAffairs. She believes conscious consumption is everyone's responsibility and that all content deserves integrity.