Mechanical Breakdown Insurance vs Extended Car Warranties
The world of extended warranties and vehicle service contracts can be a confusing place to navigate. Plans have different names and companies offer different products and services, so it’s easy to become frustrated with having to sort through it all. Mechanical breakdown insurance is a term you’ll likely hear along the way, but it’s not as different from an extended warranty as it seems. Let’s dive in and take a look at what mechanical breakdown insurance is, and how it works.
Popular Warranty Providers
What is Mechanical Breakdown Insurance?
Mechanical breakdown insurance, or MBI, is nearly the same thing as an extended warranty, but is typically cheaper and offers more payment flexibility than traditional extended warranties. Many MBI plans offer the ability to pay monthly and allow plan holders to choose the repair facility, where many extended warranty companies require customers to take their vehicle to a shop within their network of approved service providers.
Typically, MBI plans are required to be purchased while a vehicle’s factory warranty is still in effect. Companies like Geico offer MBI plans that extend out to six or seven years or 100,000 miles.
What is an Extended Car Warranty?
Extended warranties function much in the same way that a vehicle’s factory warranty does, protecting the owner from costly financial outlays as a vehicle ages. To be completely accurate, these warranties should be called vehicle service contracts or vehicle protection plans, but the basic concept is the same either way.
What is the Difference Between The Two?
Functionally, MBI plans and extended warranties are almost the same. MBIs tend to be less expensive and tend to offer more flexibility in terms of payment options and monthly payments.
What is the Cost of Mechanical Breakdown Insurance?
MBI plans tend to be less expensive on a regular basis, but may carry a higher deductible or service cost. Vehicles with higher values may not be eligible for coverage under an MBI, but a plan for more mainstream vehicles could cost anywhere from $30 to $100 per year, and deductibles range from around $200 to $500 or more.
What is the Cost of an Extended Warranty?
Extended warranty giant Endurance says that a typical plan costs around $4,000, but notes that it offers flexible payment plans and does not require the entire sum to be paid up front. Your costs could vary wildly depending on the vehicle you drive, so it’s important to check with your warranty provider.
When to Consider Mechanical Breakdown Insurance
You should consider MBI if you own a newer vehicle without tons of miles that is still covered by its factory warranty. Keep in mind that if you own a high-value vehicle, such as a Tesla Model S or BMW X7, you may not be able to purchase an MBI.
When to Consider an Extended Car Warranty
You should consider buying an extended warranty if your vehicle is out of its factory warranty coverage period. You can typically purchase an extended warranty at almost any time, but be aware that you shouldn’t wait until there’s a problem to start your search.
To learn more on this topic, you can check out our Extended Warranties Insider’s Guide and our top picks for the Best Extended Warranties in the industry today.
Car Talk's Top Rated Extended Warranty Companies
CARCHEX is one of the largest, most highly-rated providers of vehicle extended warranties in the market. They have been a trusted name in the business for 20 years.
autopom! is well known in the industry for customer service and responsiveness. The company works directly with 2600 certified repair facilities and has a dedicated customer advocacy program.
Endurance Extended Car Warranty company is one of the most popular and trusted providers in the business. Endurance coverage is accepted at any dealership and at any ASE-certified mechanic, and features a 30-day money back guarantee.
