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What Is Mechanical Breakdown Insurance?

Often meant for newer vehicles, mechanical breakdown insurance is an optional protection plan that covers repairs traditional car insurance policies won’t.

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12/19/2023 01:49 PM

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Key Takeaways:

  • Mechanical breakdown insurance covers mechanical and electrical repairs, but it doesn’t cover maintenance like tuneups and oil changes or damage from crashes.
  • Geico and Mercury Insurance offer mechanical breakdown insurance.
  • Endurance and Carchex are excellent extended warranties to consider.

Mechanical breakdown insurance (MBI) is an optional coverage plan that pays for vehicle repairs after unexpected failures of mechanical parts. Though it’s similar to an extended warranty, the two have notable differences.

We’ll explain what MBI does and doesn’t cover, how it compares to an extended car warranty, and when it’s worthwhile. And to help you find the right vehicle protection, we’ll recommend the best extended warranty companies our research team has reviewed.

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What Is Mechanical Breakdown Insurance?

Mechanical breakdown insurance is specific to car repairs, which is why it’s sometimes called car repair insurance. An MBI policy can protect your vehicle when it experiences a mechanical problem or needs replacement parts as a result of everyday use. So if your engine or transmission dies, an MBI plan can pay to repair it.

However, MBI coverage doesn’t take care of regular maintenance, wear-and-tear parts like brake pads, or repairs due to abuse or neglect.

Mechanical Breakdown Insurance Eligibility

MBI policies typically only cover newer vehicles with low mileage, but eligibility restrictions vary based on the provider. You can often renew coverage for years if you first buy it when your vehicle is brand new or before your manufacturer’s warranty expires. Mechanical breakdown insurance takes care of your car as it ages so you don’t have to pay large sums out of pocket at the repair shop.

What Does Mechanical Breakdown Insurance Cover?

Don’t confuse MBI coverage with the more common auto insurance policies that cover incidents like car crashes (collision insurance) or natural disasters and vandalism (comprehensive coverage). MBI coverage only applies when something goes wrong with your vehicle’s mechanical or electrical parts.

The table below gives an overview of what MBI usually does and doesn’t cover, but the list isn’t exhaustive since your coverage depends on your insurance company and policy. Plans with higher levels of coverage protect nearly every part of a car.

What MBI CoversWhat MBI Doesn’t Cover
Drive axlesSpark plugs
TransmissionWiper blades
BrakesBrake pads
ExhaustRust and corrosion
SteeringRecalled parts
Air conditioningNormal maintenance
Electrical systemNon-mechanical and non-electrical parts (such as upholstery, glass, and exterior trim)

How Much Does Mechanical Breakdown Insurance Cost?

There’s no standard price range for a mechanical breakdown insurance policy, but you should expect to pay between $30 and $120 per year, according to Experian. If you file a claim, your deductible may be between $100 and $500. A deductible is what you pay out of pocket before insurance coverage kicks in.

Best Mechanical Breakdown Insurance

Not every car insurance provider offers this type of coverage, but here are a few that do:

Geico Mechanical Breakdown Insurance

If you have a new or leased car that’s less than 15 months old and has traveled less than 15,000 miles, try Geico’s mechanical breakdown insurance. The policies cover all systems and parts, and you have to pay a $250 deductible when you file a claim. You can renew a Geico MBI policy for up to 7 years/100,000 miles.

Progressive Mechanical Breakdown Insurance

Progressive MBI coverage is available for cars, trucks, SUVs, and RVs. You can choose deductible of $100, $250, or $500. Progressive allows you to pay for your MBI coverage in either monthly or annual payments. Covered repairs can be performed at any licensed service center in the U.S. or Canada.

Progressive mechanical breakdown insurance also comes with the following benefits:

  • Trip interruption benefits for up to $100 per day for up to five days
  • $60 per day for car rental reimbursement

Note that Progressive MBI is not available to residents of Indiana or New York.

Mercury Mechanical Breakdown Insurance

Mercury Insurance’s MBI coverage is available for new cars and used vehicles. It allows you to have your car repairs done at any licensed facility in the country, and you can transfer coverage to a new owner if you sell your vehicle.

Mercury’s mechanical breakdown insurance also comes with several benefits:

  • 24-hour roadside assistance
  • Rental car reimbursement
  • Trip-interruption coverage
  • Road hazard tire protection

Do You Need Mechanical Breakdown Insurance?

Even though MBI policies are mostly available for new cars, you may not need to buy this coverage immediately. New vehicles typically come with factory warranties that include two types of coverage:

  • Bumper-to-bumper warranty: It covers nearly every car component, except for a small list in the contract. A common term length is 3 years/36,000 miles.
  • Powertrain warranty: This only covers the basic mechanical components of your car, such as your engine, transmission, and drive axle. Many automakers’ coverage lasts 5 years/60,000 miles.

The costs of powertrain and bumper-to-bumper warranties are rolled into the price of your new car, so getting MBI coverage during this time means spending extra money for services your manufacturer’s warranty already gives you. In this case, it may be better to wait until right before your factory warranty expires and then compare MBI policies to extended warranties from the manufacturer or third-party warranty companies.

However, some MBI providers have time and mileage limits on when you can buy coverage. The advantage of buying an MBI policy early on is that it might last beyond your factory warranty’s term.

Is Mechanical Breakdown Insurance Worth It?

An MBI policy may be worth it in these scenarios:

  • You plan to keep your vehicle for many years.
  • Your car is new enough to be eligible for MBI coverage.
  • Your vehicle’s brand has a reputation for mechanical failure.

Mechanical Breakdown Insurance Vs. Extended Warranties

Like mechanical breakdown insurance, extended warranties pay for specified repairs and replacement parts. Most manufacturers sell their own extended warranties. These are usually only available when you buy your car or before your factory warranty ends. There are also many independent warranty companies that offer extended warranties.

Mechanical breakdown coverage and extended warranties have a few things in common, but there are key distinctions:

Mechanical Breakdown Insurance OnlyExtended Warranties OnlyBoth
CoverageCoverage is typically available only for newer cars.High-mileage cars can often be covered by independent providers and brokers.Both cover repairs when a covered part breaks down due to normal use.
CostIt’s usually less expensive than an extended warranty.Extended warranties are usually more expensive than MBI coverage.Neither replaces regular auto insurance, which pays for accident- or environment-related damage.
RenewingCustomers can often renew MBI policies.You can’t renew them, but you may be able to get a new extended warranty with a different term limit.Neither covers damage from neglect or misuse.
Where to BuyCar insurance companies, banks, and credit unions sell MBI policies.Car dealerships, independent warranty brokers, and third-party companies sell extended warranties.If you haven’t filed a claim, you might get a full refund if you cancel within 30 to 60 days or a prorated refund after that.
RegulationThey’re commonly regulated by state insurance commissioners.
Vehicle AlterationsBoth coverage types won’t take care of aftermarket alterations to vehicles.

Cost Difference: Mechanical Breakdown Insurance Vs. Extended Warranties

While MBI plans often cover new cars, extended warranties can cover older cars with more mileage. The cost for an extended warranty depends on many factors, including these:

  • The kind of car you drive
  • Your vehicle’s mileage and age
  • The coverage level and deductible you choose
Icons showing six factors that affect extended warranty costs

In our 2022 survey of 1,000 warranty customers, the median cost for an extended warranty was $2,458. Half of those polled said they paid between about $1,600 and $3,200 for extended coverage. People who bought plans from automakers rather than dealerships or independent warranty companies generally paid slightly more.

Compared to bumper-to-bumper coverage, a powertrain plan is often the cheaper option for an extended warranty. This is because bumper-to-bumper warranties cover much more.

Our reviews team collected the following quotes for vehicle service contracts from our top five recommended warranty companies:

Warranty CompanyVehicleCoverage TypeWarranty LengthMonthly CostTotal Price
Carshield2018 Honda CivicBumper-to-Bumper5 years/70,000 miles$110Varies
Olive2016 Ford FusionBumper-to-Bumper3 years/185,000 miles$55 for 36 months$1,980
Endurance2018 Honda CivicBumper-to-Bumper6 years/71,000 miles$98 for 24 months$2,352
Carchex2018 Honda CivicBumper-to-Bumper7 years/125,000 miles$166.73 for 18 months$3,001.14
Carshield2012 Subaru OutbackMid-LevelUnlimited years and miles$139.99Varies
Olive2016 Ford FusionMid-Level3 years/185,000 miles$50 (36 months)$1,800
Carshield2012 Subaru OutbackPowertrainUnlimited years and miles$139.99Varies
Carchex2012 Subaru OutbackPowertrain6 years/60,000 miles$192.78 for 18 months$3,470.04
Endurance2012 Subaru OutbackPowertrain5 years/51,000 miles$120.50 for 30 months$3,615

Mechanical Breakdown Insurance Guide: Conclusion

In addition to giving you peace of mind, an MBI policy can give you lower repair costs if your car has a major mechanical failure. MBI covers the repair and replacement of mechanical and electrical parts, but it doesn’t cover regular maintenance like tuneups or oil changes.

Top Recommendations For Extended Car Warranties

Based on our research, two of the top car warranty companies are Endurance and Carchex. Shopping around for at least three quotes is always highly recommended before settling on a provider.

Endurance: Best Coverage

Unlike many of its competitors, Endurance administers the extended warranty contracts it sells. The provider has six coverage levels, including an exclusionary plan, a basic powertrain plan, and maintenance coverage. With the one year of its Elite Benefits that’s included, Endurance also offers roadside assistance, towing, and rental car reimbursement.

Keep reading: Endurance warranty review

Carchex: Best For Used Cars

Founded in 1999, Carchex is a third-party warranty company that’s available nationwide. The company offers five versatile coverage levels that can work for drivers with varying budgets. While Carchex doesn’t sell maintenance coverage, customers have access to benefits like roadside assistance, towing, rental car reimbursement, and trip-interruption coverage.

Keep reading: Carchex review

Mechanical Breakdown Insurance: FAQ

What is mechanical breakdown coverage?

Mechanical breakdown coverage is an optional type of car insurance policy that pays for the repair and replacement of mechanical and electrical parts. It doesn’t cover regular maintenance services like oil changes or tire replacements.

What is an example of a mechanical breakdown?

An example of a mechanical breakdown is when your transmission dies as a result of everyday use. Other car parts that can have mechanical breakdowns include the drive axle, fuel system, and powertrain.These types of repairs may be covered by mechanical breakdown insurance from an auto insurer or a warranty from your car’s manufacturer or an independent warranty company.

Does car insurance cover mechanical problems?

Regular car insurance only covers mechanical problems if they were caused by an incident your policy covers, such as a collision. Mechanical breakdown insurance, which can be purchased separately, covers mechanical problems that result from normal, everyday use.

Does insurance cover you if your engine blows?

Insurance only covers engine failure if it’s caused by an incident covered by your insurance policy. To have repairs for a blown engine covered, you’ll need to purchase a product such as mechanical breakdown insurance or an extended warranty.

How We Rate Warranty Providers

Our review process aims to deliver consistent and unbiased assessments of extended auto warranty providers. While there are multiple qualities that make a warranty company successful, our review team focuses on those we believe are the most important for consumers:

  • Cost: Cost can be difficult to compare between providers because so many factors impact vehicle service contract pricing. To determine our cost score, we perform a secret shopper analysis for a variety of vehicles and plans and consider available deductibles.
  • Coverage: Our team of experts looks at the number of extended warranty plans available, as well as term limits, exclusions, and added benefits like roadside assistance. Ratings also take into account the availability of maintenance coverage.
  • Reputation: It’s important that an extended car warranty company is able to meet its claims obligations. Companies with a strong rating from the Better Business Bureau (BBB) score well in this category. Established providers with a long history of reliable service also receive positive marks.
  • Customer Experience: We listen to real customer sales calls and comb through reviews on sites like the BBB to learn about customer experiences. Warranty companies with a low volume of complaints score well in this area. We also consider the availability of mobile apps and chat features.

*Data accurate at time of publication.