What Is Mechanical Breakdown Insurance, and Do You Need It?
Mechanical breakdown insurance pays to repair your car after a mechanical failure. You may want to add this coverage before your auto warranty expires.
Background working with banks and insurance companies
Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.
Konstantin HalachevVP of Engineering & Data Science
7+ years experience in data analysis
Ph.D. in Computational Biology
Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.
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Car insurance doesn’t cover car repairs or replacements if your vehicle’s mechanical components break down unexpectedly. That’s where mechanical breakdown insurance (MBI) or car repair insurance comes in.
This insurance coverage is similar to an extended warranty, with some notable differences. (Spoiler: Mechanical breakdown insurance is usually the lower-cost option.) Here’s what you should know about what MBI covers, what it excludes, how much it costs, and how it works with your existing auto warranty and car insurance policy.
What mechanical breakdown insurance covers
Mechanical breakdown insurance covers your vehicle’s mechanical parts after an unexpected breakdown. For example, say your car’s transmission stops working. If it didn’t have prior transmission issues, MBI would pay for the cost of repairs.
Besides your transmission, an MBI insurance policy usually covers your vehicle’s:
Air conditioning
Brakes
Drivetrain
Electrical systems
Engine
Exhaust
Fuel system
Starters
Steering
Suspension
Several mechanical breakdown providers will only insure new, low-mileage vehicles. Older, high-mileage vehicles face an increased likelihood of failure, making them riskier to insure.
It’s worth noting that some MBI policies enforce term limits based on the number of years or miles you drive your car. For example, GEICO will renew your coverage for up to seven years or 100,000 miles — whichever comes first.[1] Once your term ends, you no longer qualify for coverage.
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What mechanical breakdown insurance doesn’t cover
Mechanical breakdown insurance policies won’t cover damage from car accidents with other vehicles or objects. It also excludes coverage for theft, vandalism, and environmental factors.
Additionally, MBI policies won’t cover mechanical issues due to poor upkeep and neglect. Many car insurance companies require drivers to perform regular vehicle maintenance, like oil changes, tire rotations, or replacement of brake pads. Failing to do so can result in coverage denials. Mechanical breakdown insurance excludes coverage for the cost of routine maintenance.
Benefits of mechanical breakdown insurance
Mechanical breakdown insurance offers protection for your vehicle’s mechanical components. Consider the following advantages:
Financial protection
Addressing an internal issue can be costly. Mechanical coverage saves you from debt or using your savings to pay for a repair.
Broad coverage
When your manufacturer’s auto warranty expires, MBI can cover the gaps.
Repair shop flexibility
Many MBI insurance companies allow you to take your vehicle to a repair facility of your choice.
Available with auto insurers
You can add mechanical breakdown insurance to your car insurance policy for easy management and a single bill payment. Just keep in mind that not all insurers offer this coverage.
Affordability
An MBI policy can be an affordable alternative to an extended warranty.
Ability to customize
Supplement your MBI policy with optional coverages, such as roadside assistance and rental car coverage, for more protection.
How much mechanical breakdown insurance costs
The cost of mechanical breakdown protection varies based on your vehicle. Drivers with older or high-mileage vehicles usually pay higher rates.
For example, a Good Sam MBI policy for a 2017 Audi Q5 SUV with a gas engine, tow hitch, four-wheel drive, 85,000 miles, and a $100 deductible in Chicago costs $137 per month.
Meanwhile, a 2023 Honda Civic with a gas engine, no towing ability, front-wheel drive, 500 miles, and a $500 deductible in Chicago costs $18 per month.
Your vehicle’s repair cost is another factor that influences your premiums. Luxury cars like Audis and BMWs are more expensive to repair, requiring premium parts and specialized labor. Similarly, cars with high-tech features like parking sensors and self-parking capabilities have increased replacement costs, resulting in higher rates.
The terms of your policy also affect your costs. Choosing a higher deductible leads to lower premiums, and lower deductibles come with higher premiums. Additionally, the longer your coverage term is, the more you’ll pay over the lifetime of your policy.
How mechanical breakdown insurance works with your existing coverage
Mechanical breakdown coverage can work with your existing auto warranty and car insurance to provide more protection.
Most car warranties come with the following coverages:
Powertrain: This covers parts of your car that make it drive, like your engine, transmission, and drivetrain.
Bumper-to-bumper: This offers comprehensive service for most of your vehicle, including its powertrain system, electrical components, and air conditioning.
A bumper-to-bumper warranty usually has a shorter lifespan than a powertrain warranty. When your bumper-to-bumper warranty expires, you can buy an MBI auto policy to cover components that your powertrain warranty doesn’t.
An MBI policy can also supplement your auto insurance policy. A standard car insurance policy includes comprehensive coverage and collision coverage. This protects your vehicle against car crashes, theft, vandalism, severe weather, and more.
Auto insurance doesn’t cover a mechanical breakdown due to a factory defect or malfunction. That’s where MBI comes in.[2]
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Difference between mechanical breakdown insurance and extended warranty
Mechanical breakdown insurance and extended car warranties (or vehicle service contracts) both cover mechanical failures after your manufacturer’s warranty ends. While similar in coverage, they have crucial differences:[3]
Factor
▲▼
Mechanical Breakdown Insurance
▲▼
Extended Auto Warranty
▲▼
Where to purchase
From your auto insurer or a third-party insurer
From a dealership, manufacturer, or a third-party warranty company
Cost
Cheaper than an extended warranty
More expensive, but negotiable
Repair shop flexibility
Can receive repairs at a preferred shop
Must receive repairs at a manufacturer-approved shop
Mechanical breakdown insurance for new vs. used vehicles
The age of your vehicle can affect your MBI coverage. Insurers may not offer MBI coverage for older, used cars.
Benefits for new vehicles
With new vehicles, you may not need MBI off the bat. But when part of your original warranty expires, you can buy MBI to remain fully insured. Mechanical insurance may also increase your car’s resale value. If you plan to sell your car, keeping it free from mechanical problems can attract potential buyers.
Benefits for used vehicles
Like newer vehicles, MBI covers your used vehicle once your factory warranty expires. Pre-owned vehicles from a dealership typically come with an extended warranty alongside a certified inspection. Again, you may not need MBI immediately. But once part of your extended warranty expires, it could cover those gaps.
Mechanical breakdown insurance FAQs
If you’re still deciding whether mechanical breakdown insurance is right for you, check out the additional information below.
How is mechanical breakdown insurance different from an extended warranty?
Mechanical breakdown insurance differs from an extended car warranty in several ways. In general, an MBI is cheaper than an extended warranty, and you have more flexibility in choosing repair shops.
What types of vehicles are eligible for mechanical breakdown insurance?
Mechanical breakdown insurance can cover cars, trucks, SUVs, and RVs. Most insurers will only insure new cars with low mileage.
What components and systems does mechanical breakdown insurance typically cover?
Mechanical breakdown insurance covers several mechanical components, including your engine, transmission, steering, suspension, fuel, brakes, air conditioning, heating, and electrical system.
How does the claims process work for mechanical breakdown insurance?
The MBI claims process is similar to the standard auto insurance claims process. You must first contact your insurer to file a claim. Once your insurer approves the claim, it’ll pay your preferred repair shop directly. You’re responsible for paying your deductibles to the repair shop before it starts working on your car.
Does mechanical breakdown insurance have any exclusions or limitations?
Yes. Mechanical breakdown insurance comes with several exclusions or limitations. It doesn’t cover mechanical damages due to accidents, theft, vandalism, fires, floods, and weather events. It also doesn’t cover failures due to lack of or improper maintenance.
Methodology
Insurify data scientists analyzed more than 90 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 50+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.
Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).
Liability-only premium averages correspond to policies with the following coverage limits:
Bodily injury limits between state-minimum rates and $50,000 per person, $100,000 per accident
Property damage limits between $10,000 and $50,000
No additional coverage
Full-coverage premium averages correspond to the same bodily injury and property damage limits in addition to:
Comprehensive coverage with a $1,000 deductible
Collision coverage with a $1,000 deductible
Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.
GEICO. "Mechanical Breakdown Insurance: Coverage for Car Repairs."
J.D. Power. "The Difference Between A Powertrain And Bumper-To-Bumper Warranty."
J.D. Power. "Pros and Cons of Buying an Extended Warranty for a Car."
Alani Asis
Alani Asis is a personal finance freelance writer with nearly three years of experience in content creation. She has landed bylines with leading publications and brands like Insider, Fortune, LendingTree, and more. Alani aims to make personal finance approachable through fun, relatable, and digestible content.
Background working with banks and insurance companies
Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.
Konstantin HalachevVP of Engineering & Data Science
7+ years experience in data analysis
Ph.D. in Computational Biology
Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.
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