Mechanical Warranties 101
A mechanical warranty is an extended warranty offered by your car dealership (or third party) that usually applies to mechanical breakdown or parts when you buy a car. It may be offered for any number of years depending on the plan you decide to go with and how much you want to spend.
Many people do not realize that they may have more than one option when it comes to buying coverage against mechanical breakdown. Depending on how long you are going to own your car for, or even if you don’t plan to own it very long, but want to resell it in a few years, there may be advantages to purchasing mechanical warranty or buying mechanical breakdown insurance through an insurance company. It’s a good idea to review what the insurance company offers to understand what option will give you the greatest advantage and can save you money, as we discuss below.
What is Mechanical Breakdown Insurance?
Mechanical Breakdown Insurance (MBI) is a coverage that pays for car repairs unrelated to an accident that can be purchased through your car insurance company instead of an extended warranty through the dealer.
Like an extended warranty the mechanical breakdown insurance coverage pays for repairs to a car in excess of the manufacturer’s warranty and may also provide additional coverage’s as part of the insurance package depending on the insurance company. Mechanical Breakdown Insurance can be added as an endorsement to your auto policy. Mechanical breakdown insurance coverage may provide advantages over an extended warranty on a car because it is offered through an insurance company and is regulated by the insurance industry for standards and claims.
Benefits to Buying Mechanical Breakdown Insurance
- May include more parts and systems than most dealer warranties
- Will likely cost less than at the dealership
- You can get your car repaired wherever you want (within accredited facilities) – as opposed to dealership-only limitations
- May be transferable to a new vehicle owner if you sell your car, or you can cancel it at any time and not lose the money
- You do not have to pay a big lump sum payment up front and pay interest if the cost gets bundled into your vehicle financing
What is Not Covered by Mechanical Breakdown Insurance?
Mechanical breakdown coverage does not cover routine maintenance or damage from car accidents. It also may not cover wear and tear, so you will want to find out what classifies as wear and tear, or what is classified as a breakdown. This could make a difference in which product or insurance you take.
Other Exclusions in a Mechanical Breakdown Insurance
- Suspension alignment
- Wheel balancing
- Coolant and fluids
- Spark plugs
- Brake pads and linings
- Brake shoes
Does My Car Insurance Cover Mechanical Breakdown?
No, regular car insurance is not meant to cover regular breakdowns or maintenance. You can buy Mechanical Breakdown Insurance separately. Note that MBI does not replace regular car insurance, it is an add-on.
You still have to purchase your basic car insurance to cover minimum car insurance requirements as well as additional coverage’s – like comprehensive, collision or other endorsements.
How Much Does Mechanical Breakdown Insurance Coverage Cost?
The cost of Mechanical Breakdown Insurance is usually less expensive than the extended warranty at the dealer. The price varies based on the year and model of the car.
Unlike regular car insurance underwriting which takes into account your driving record and many other personal factors, sometimes even including your credit rating, the mechanical breakdown coverage is only based on the year and model of your car. Calculation of price does not take any of your personal information into consideration.***
*** As curated from https://www.thebalance.com/mechanical-breakdown-insurance-4049392.
Motorvaps policies vary – check with your agent first.