Best mechanical breakdown insurance

MBI is an optional coverage that saves money on costly car repairs

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    Audi, CARCHEX, Endurance Auto Warranty, CarShield and olive
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    You probably already have car insurance for accidents and liability, but typical insurance policies don’t cover the expense to fix breakdowns caused by mechanical failures — for that, you'll need a warranty or mechanical breakdown insurance.

    New cars come with a manufacturer’s warranty to cover repairs for around three years or 36,000 miles. Once this lapses, you can purchase similar protections from either an insurance company or an extended warranty provider.

    What is mechanical breakdown insurance?

    Mechanical breakdown insurance (MBI) is an insurance policy that covers your car’s major parts and systems. It can help pay for repairs to your powertrain, electrical systems and other major components.

    Traditional car insurance helps cover accidents and damage to the body of your car, but MBI deals with the components that keep your car working and on the road. Basically, it's car repair insurance.

    It can be hard to find mechanical breakdown insurance for used, higher-mileage cars. If you’re buying a used vehicle, find out if it’s still covered by the original equipment manufacturer’s (OEM) warranty to avoid duplicate coverage.

    If the OEM warranty has expired and you want to keep similar coverage, also consider an MBI alternative, like an extended warranty or vehicle service contract (VSC) — even cars with more than 100,000 miles can qualify.

    What does mechanical breakdown insurance cover?

    What each policy covers depends on your plan and provider. According to CARCHEX, typical MBI coverage includes your:

    • Major engine parts, such as pumps
    • Drivetrain
    • Electrical components

    Some policies also cover air conditioning, steering and fuel systems. Typical exclusions include maintenance items, like tune-ups, oil changes, tire rotation, alignments, lubrication, coolant changes, and replacing spark plugs, brake pads, brake shoes and tires. MBI also won’t pay for damage caused by corrosion and improper maintenance.

    Mechanical breakdown policies generally don’t pay to repair damage from accidents or natural disasters. They also usually don't cover breakdowns caused by overheating, improper maintenance, alterations to your vehicle, towing excessive weight or any preexisting conditions.

    Our top picks for MBI (and alternatives)

    Besides GEICO, not many car insurance companies currently offer MBI nationwide. olive specialize in extended warranties (vehicle service contracts), but they have MBI policies available to residents of California.

    Endurance and CarShield are extended car warranty companies with comparable coverage through vehicle service contracts (an MBI alternative). These plans pay for mechanical breakdown repairs but aren’t considered insurance products. Jump down to mechanical breakdown insurance vs. extended warranties to learn more.

    Our pick for same-day coverage olive
    • Standard deductible: Varies
    • Waiting period: None
    • Maximum mileage: 185,000
    • Available in California: Yes

    olive offers MBI in California and vehicle service contracts in most other states (except Florida). Cars, trucks and SUVs with up to 10 model years and 140,000 miles are eligible to enroll in an MBI policy. Once you sign up, there aren’t yearly mileage restrictions.

    Coverage options: Standard powertrain coverage includes your engine, transmission, transfer case, drive axle and air and fuel systems. Seals and gaskets for any covered components are also included in each tier.

    Your vehicle’s steering, odometer, speedometer, front suspension, brakes, climate control and electrical systems are added to the above list for powertrain plus coverage.

    Complete care policies cover all mechanical and electrical parts except exclusions listed in your agreement.

    What reviewers say: A reviewer in California got a policy shortly after buying a pre-owned Audi convertible: “The price was reasonable. … Olive customer service was super helpful, and when I had questions, they explained everything. They seemed very transparent.”

    Another reviewer from California with MBI said they pay $31 per month for bumper-to-bumper coverage on their Mercedes: “... it’s unbelievable. I was a little hesitant because the other warranty company that I called was $170, and the dealer was almost $4,000 for three years.”

    Our pick for traditional MBI GEICO
    • Standard deductible: $250
    • Waiting period: Varies
    • Maximum mileage: 115,000
    • Available in California: Yes
    GEICO Logo Get a Quote on SmartFinancial

    GEICO is one of the few national insurance companies that offer mechanical breakdown insurance with its policies for new cars.

    To be eligible for GEICO mechanical breakdown insurance, your car must be less than 15 months old and have less than 15,000 miles. You can renew annually for up to seven years or 100,000 miles, whichever comes first.

    You can submit claims over the phone during regular business hours. In most states, you have to get authorization before any repair work is done in order for coverage to kick in.

    Coverage options: GEICO’s MBI covers all parts and systems. To learn about coverage options and costs in your area, you should contact a representative directly.

    What reviewers say: GEICO has mixed reviews on our site overall, but at least one person has good things to say about the company’s MBI policy.

    “I never thought I'd need it, but the sensors on my Mercedes went out after the term of the warranty,” a reviewer in Florida said. “The cost of the mechanical breakdown came to under $100 per year with a $250 deductible. The cost of the sensor replacement would have been about $1800 without this feature of the policy.”

    Our pick for an extended warranty CarShield
    • Standard deductible: Varies
    • Waiting period: 30 days and 1,000 miles
    • Maximum mileage: 300,000
    • Available in California: No

    If your car can’t qualify for traditional MBI (and you don’t live in California), CarShield is a good option to consider. It’s also one of our top picks for vehicles with more than 100,000 miles. All contracts are administered by American Auto Shield.

    Coverage options: CarShield offers Diamond, Platinum, Gold, Silver and Aluminum levels of coverage. The most comprehensive plans cover your engine, transmission, air conditioning, starter, fuel pump, electrical system and more. A plan for motorcycles and all-terrain vehicles (ATVs) is also available.

    What reviewers say: Recent positive reviews highlight CarShield coverage and customer service, even when you cancel.

    “I had my coverage for just over a month, and of course, my engine light came on. … It turned out to be my transmission, and the cost was thousands. CarShield came through, and my cost was [the] $100 deductible and part of my car rental,” a reviewer in New York said.

    “I was unsuccessful with my car purchase, so I had to cancel the policy,” a reviewer in Virginia said. “The customer service reps were pleasant and very knowledgeable. … The cancellation process was simple and hassle-free.”

    Our pick for older vehicles Endurance Auto Warranty
    • Standard deductible: $100
    • Waiting period: 30 to 60 days and 1,000 miles
    • Maximum mileage: Unlimited
    • Available in California: No

    Endurance is an extended car warranty company that operates in most states except California. Like CarShield, it’s a good pick for older vehicles with higher mileage. We like that Endurance is a direct administrator for most of its plans.

    During a phone survey, one verified customer told us the coverage is valuable “because you'll never know when your car is breaking. I've had a lot of cars that you think they're running great, then something happens … when you're not expecting it, you have to throw, like, one or two grand into a new engine and something like that.”

    Coverage options: Endurance offers six tiers of coverage, from Secure (most affordable) to Supreme (exclusionary coverage). In between, there’s Select Premier for high-mileage cars, Secure Plus for short waiting periods and Advantage, which includes maintenance.

    All plans come with a free year of Elite Benefits, which include roadside assistance, key fob replacement and some tire repairs.

    What reviewers say: “The reps were knowledgeable and on-point,” according to a reviewer in Alaska. Other customers highlight the maintenance benefits and overall peace of mind that coverage brings.

    “They gave me several options for the warranty, and I chose the better one because it covered some of the maintenance and several oil changes a year,” a reviewer in Florida said.

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      Mechanical breakdown insurance vs. extended warranty

      Mechanical breakdown insurance is similar to an extended auto warranty, but they’re not identical.

      An extended car warranty is technically a vehicle service contract (VSC). It’s not the same as insurance but provides comparable financial protection. Extended warranties are offered by dealerships and third-party providers, but mechanical breakdown insurance (MBI) can only be sold by licensed insurance companies.

      Both pay for needed service and repair after a mechanical breakdown. Unlike auto insurance, you can get a warranty from dealerships and third-party providers, and unlike comprehensive or collision insurance, mechanical breakdown insurance pays for unexpected repairs for damage caused by regular driving habits.

      Not every company offers MBI, and not all car owners qualify for MBI. New and used cars are eligible, but MBI typically must be purchased before a car is too old or has too many miles, depending on the insurer’s limits.

      “An insurance policy is a contract between you and an insurance company. The insurance company is the obligor. If you have a claim, you deal directly with the insurance company (or a claim adjuster hired by the insurance company),” according to the California Department of Insurance (CDI).

      Some laws apply to mechanical breakdown insurance that don’t apply to vehicle service contracts. For example, the CDI regulates insurance policy prices in California but not the prices for vehicle service contracts.

      Mechanical breakdown insuranceExtended car warranty
      Add-on insurance policyOptional vehicle service contract
      Offered by insurance companiesOffered by dealerships and third parties
      Coverage up to 100,000 milesCoverage up to 300,000 miles
      Costs around $100 per yearCosts around $2,500 per term
      Pay monthly or yearly premiumsPay upfront or finance
      Renewable each yearPlans for up to 10 years
      Available nationwideNot available in California

      Frequently asked questions

      Who offers mechanical breakdown insurance?

      GEICO is probably the best-known insurance company that offers MBI — AAA, Mercury, American Family and Allstate have similar coverage through vehicle protection plans that aren’t technically insurance.

      Some extended warranty companies, like olive, offer mechanical breakdown insurance in California and vehicle service contracts in other states. If you’re not in California, extended car warranty companies provide similar coverage. A few credit unions also offer MBI or comparable protections.

      Does car insurance cover mechanical problems?

      Traditional car insurance doesn’t cover mechanical problems unless they were caused by a covered event, like an accident. GEICO offers mechanical breakdown insurance (MBI) as an optional add-on policy. Extended car warranty companies offer similar coverage.

      How much does mechanical breakdown insurance cost?

      Mechanical breakdown insurance costs vary greatly, but it’s generally less expensive and more flexible than extended auto warranties. Like many important purchases, it makes sense to shop around and find the best value on coverage. For more, check out our tips to get cheap car insurance or how to avoid car warranty scams.

      How does mechanical breakdown insurance work?

      When something goes wrong with your car, you take it to a repair shop. You pay a standard deductible, like with regular insurance, if the problem is with a covered component.

      For example, let’s say you pay a premium either every month or once a year for coverage (MBI or an extended car warranty) with a $100 deductible.

      Now, imagine your transmission unexpectedly goes out. At the repair shop, they say it costs around $4,000 to replace. You submit a claim (usually over the phone), and the company either pays the repair shop directly or reimburses you after you pay upfront. Once the process is over, you’re only out the deductible, which is $100 in this example.

      Look for a policy that is flexible with where you can take your vehicle; some require that you take your car to specific repair facilities.

      Bottom line: Is mechanical breakdown insurance worth it?

      MBI can be worth it if you’re still paying off a new car after the OEM warranty expires or if you buy a used car that’s out of warranty. It might not be worth it if you get a certified pre-owned vehicle that comes with similar protections. (You don’t need to overlap or duplicate coverage.)

      Ultimately, it depends on how old your car is, what kind of coverage you want and where you live.

      In California, where you can’t get an extended car warranty, MBI is a popular alternative. On the other hand, you might be better off going with an extended warranty plan if you live in another state.

      Typically, a good vehicle protection plan pays for itself after a couple of major repairs. It’s also worth looking for a warranty that will provide extra perks, like roadside assistance and rental car reimbursement. The biggest potential downside is that you might buy a plan and then never have to use it. Still, some people don’t mind spending money for peace of mind.

      One olive customer gives an example: “on the 2019 one-ton Ram, I paid $1,400 for a three-year extended warranty, up to 185,000 miles. … But just to have that peace of mind, 1,400 bucks, why not? That's a no brainer to me.”

      ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
      1. California Department of Insurance (CDI), “Guide to Automobile Service Contracts, Extended Warranties and Other Repair Agreements.” Accessed November 15, 2021.
      2. Federal Trade Commission (FTC), “Auto Warranties and Service Contracts.” Accessed November 15, 2021.
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