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Crash Course:
- Auto repair insurance or a similar option like an extended warranty might be worth it depending on the reliability of your vehicle.
- We recommend Endurance, CARCHEX, and CarShield for some of the best car repair insurance offerings.
As a car owner, you want to protect your vehicle from mechanical issues or breakdowns that happen as it ages. Your regular car insurance policy generally only covers repairs after an accident – not the repairs due to normal part failures that happen over time. However, there are insurance programs called auto repair insurance specifically for non-accident car repairs.
Auto repair insurance, much like an extended warranty, covers the breakdowns and mechanical failures that happen as a result of normal driving habits. Different car repair insurance and service contract providers offer multiple levels and types of protection for your car.
This guide will help you determine if purchasing car repair insurance is the right choice for extending your vehicle’s life. We’ll also explain alternatives to auto repair insurance and discuss the best extended car warranty companies.
What Is Car Repair Insurance?
Car repair insurance is a service offered to fix minor and major mechanical failures due to normal wear on your car. Depending on your provider, there may be several different levels of coverage available. One kind of car repair insurance is usually called mechanical breakdown insurance (MBI) by insurance companies.
Quick Facts: Auto Repair Insurance
Below are some important things to know about auto repair insurance:
Who offers it? Most auto repair insurance is offered through insurance agencies as an add-on service to your existing car insurance policy. You’re more likely to find it offered by larger insurance companies. Companies may offer repair insurance as a rider to your existing policy or as a separate plan completely. For example, several state branches of AAA provide car repair insurance plans, while other AAA branches offer extended warranty options instead.
Best use: Repair insurance is best if you’re driving a newer or low-mileage car and want to make sure an unexpected breakdown is covered.
Average cost: Repair insurance generally costs between $50 to $1,000 a year, depending on the age of your vehicle, mileage, and level of repair insurance.
Deductible cost: Most deductibles are between $100 to $300, so minor repairs won’t be covered.
Pros: Since auto repair insurance is usually offered as a rider or add-on policy for your existing car insurance, you’ll be dealing with just one company.
Cons: Auto repair insurance often has restrictions on mileage or age of the vehicle, making higher mileage cars more expensive to insure. Many repair insurance providers don’t offer coverage for older vehicles, meaning you’ll only have it when your vehicle is newer and less likely to need repairs.
How Does Auto Repair Insurance Work?
Car repair insurance works similarly to an extended warranty with a few limitations. Coverage for certain parts of your vehicle will be specified by your provider and the plan you choose. When you’re faced with a breakdown or mechanical failure, you contact your repair insurance provider to file a claim.
Filing a claim is an important part of the repair insurance process because it allows you to ask for pre-authorization for your repairs. Once your claim has been approved by the insurance provider, you can go to an authorized mechanic for the repair.
Be aware that car insurance companies may require you to visit specific locations for repair. You might also have fewer coverage options than you would with an extended warranty company.
Car Repair Insurance Coverage
So what does car repair insurance actually cover? Here are a few details:
What Car Repair Insurance Covers | What Car Repair Insurance Does Not Cover |
---|---|
Mechanical breakdowns to specific components listed | Exclusionary coverage like a factory warranty |
Common systems covered include the engine, transmission, and drivetrain | Maintenance services |
Damage due to wear and tear |
No matter what type of policy you choose, it’s important to understand what’s covered under your specific plan. Before you sign, you should get a sample contract from your provider that tells you exactly what is and isn’t covered.
Most car repair insurance plans cover some combination of the following:
- Brakes
- Exhaust
- Steering
- Drivetrain
- Heating and cooling
- Engine parts like the water pump
Car Repair Insurance Cost
What you pay for an auto insurance policy (or an extended warranty) depends on your vehicle, its condition, and the company you use. One of the main large providers offering a form of car repair insurance, or MBI, is Geico. Based on our rate data, Geico MBI costs under $200 per year, and payments are rolled into your car insurance premiums. There’s one level of coverage available, but covered parts aren’t listed online, and it comes with a $250 deductible. MBI is likely less expensive than other forms of car repair insurance, as it has limited coverage terms.
Below are a few popular extended warranty companies with average costs per year of coverage. Our bumper-to-bumper quotes are based on a 2019 Toyota Camry with 28,000 miles, and powertrain quotes are based on a 2014 Honda Accord with 90,000 miles. You might find a three-year plan from one company and a five-year plan from another, and that would influence the cost.
Car Repair Insurance Provider | Annual Bumper-to-Bumper Extended Warranty Cost | Annual Powertrain Extended Warranty Cost |
---|---|---|
Endurance | $1,065.32 | $1,162.52 |
CARCHEX | $1,319.88 | $2,039.88 |
CarShield | $1,319.88 | $1,799.88 |
Is Car Repair Insurance Worth It?
For some drivers with new vehicles, this type of insurance may be worth it. However, many of the repairs on a new car will already be covered under a manufacturer’s warranty. This would make your repair insurance an unnecessary expense. You can check the reliability ratings on your new car to help determine if it’s likely to need repairs in the first few years of use.
Generally, reliable cars that are new or have low miles are not good candidates for repair insurance. As these cars age, an extended warranty likely offers better coverage and more cost-effective protection. You can add the extended warranty once the manufacturer’s warranty has expired and continue protecting your vehicle for years to come.
Extended Auto Warranties Offer More Options
When it comes to long-term protection for your vehicle, an extended car warranty from a third-party warranty company gives you better coverage options than car repair insurance. An extended warranty is a service contract that offsets the cost of auto repairs due to regular use. It’s different than a manufacturer’s warranty, which normally only covers mechanical breakdowns from faulty factory parts or workmanship.
Quick Facts: Third-Party Extended Warranty
See some important notes about extended warranty coverage below:
Who offers it? Extended warranties are available through third-party companies such as CARCHEX who specialize in these service contracts.
Best use: Extended warranties from third-parties are great for almost any vehicle because they offer many levels of protection. They’re especially great for older or high-mileage vehicles.
Average cost: Costs vary depending on your car’s age and mileage. Third-party warranty companies usually offer a range of plans and pricing options, so you should be able to set up your extended warranty to meet your budget.
Deductible cost: Your deductible depends on your service contract, but most are between $50 and $100, with options for $0 deductible.
Pros: You can get a third-party extended warranty anytime in a variety of coverage options. This allows you to protect an older car or one with higher miles. Since cars with higher mileage are more prone to needing repairs than brand-new ones, it makes more sense to have an older vehicle covered. You’re much more likely now than in the past to have a car last well over 100,000 miles and want to protect it. You also won’t be locked into using your dealership for vehicle repairs and can choose a plan that offers more protection than a dealer’s extended warranty.
Cons: Unlike auto repair insurance, you won’t be using one company for all of your protection needs. However, as long as your extended warranty provider is a reputable company with positive customer reviews and highly rated customer service, this shouldn’t be a problem.
Best Car Repair Insurance
The best car repair insurance will offer a good balance of coverage and affordability. Check with your current insurance agent or provider to see if they offer car repair coverage.
If you want protection for your car, you may also consider an extended warranty. Extended warranties usually provide either bumper-to-bumper coverage – comprehensive coverage with a few listed exclusions – or powertrain coverage, which protects the powertrain and related components.
The best extended warranty companies offer several plans for each type of coverage, as well as some in the middle. This variety ensures that you’ll protect the vehicle systems that you would like to protect without paying for unnecessary coverage. See some of our top extended warranty providers below.
Endurance: Best Overall
Endurance is a leading extended car warranty provider that’s been in the industry since 2006. It’s known as one of the most trusted companies in the nation and was included in the 2019 Inc. 5000 as one of the fastest-growing privately-held businesses in America.
Based on our review of Endurance as an extended auto warranty company, here are a few things we like:
- The claims process is simple and clear.
- Most plans offer transferability and cancellation if needed.
- Endurance offers a full refund 30-day money-back guarantee.
- You won’t have to wait for reimbursements, as repair services are paid for directly by Endurance.
- Warranty coverage is clearly stated online through easily accessible sample contracts, which list exclusions and fine print.
For a free, no-obligation quote, use the tools below. If you’d like to learn more about this provider, our Endurance review has all the details.
CARCHEX: Best Reputation
CARCHEX is a reputable car warranty company that provides protection plans for almost any vehicle. Check out some of the most important benefits CARCHEX has to offer:
- Wide range of coverage options: CARCHEX has five levels of coverage with up to 16 contracts available from suppliers. Some coverage options protect your car for up to 10 years or 250,000 miles. These plans are backed by top-rated insurance companies, including Royal Administration Services and American Auto Shield. If you decide to cancel your coverage, CARCHEX offers a 30-Day Money Back Guarantee.
- Top-rated customer service: With an A+ Better Business Bureau (BBB) rating, you know you’re getting service from a reliable company. CARCHEX promises a No-Haggle, Low-Price, Everyday Guarantee™, which means they’ll start with the lowest price available.
- Flexible payment options: Some extended warranties make you pay up front, but CARCHEX offers payments in monthly installments. The range of plans means you can choose a contract that meets your budget and is more manageable than a costly repair bill.
- Go to your trusted mechanic: Unlike dealer warranties and auto repair insurance, CARCHEX allows you to go to the repair shop of your choice. They’ll pay repair fees directly to the shop, so you don’t have to wait to be reimbursed.
- Additional perks: All CARCHEX protection plans come with 24/7 roadside assistance, as well as towing, rental cars, gas delivery, and trip interruption services.
You can read a direct comparison between Endurance and CARCHEX in our Endurance vs. CARCHEX review.
CarShield: Affordable Monthly Payments
CarShield is one of our top-scoring auto warranty providers due in large part to its flexible payment plans that allow customers to have coverage on their vehicles without being locked into a long contract. Here is more information on what CarShield offers for customers:
- Strong Coverage Options: CarShield has 8 warranty coverage plans ranging from a standard exclusionary plan and powertrain warranty, to coverage for motorcycles and ATVs. CarShield also stands out within the industry by offering a warranty plan specifically for electric vehicles.
- Flexible monthly payment plans: Many customers worry that their warranty plan will be unnecessary and they will be paying for something they won’t use, but with CarShield, you can pay a month-to-month contract and only pay for coverage when you need it.
- Choice of mechanic: CarShield works with thousands of repair shops so customers don’t need to go to the dealership for repairs. You get to choose your own trusted shop in the case of a breakdown.
- Additional perks: Each of CarShield’s 8 plans comes with 24/7 roadside assistance, towing reimbursement, rental car reimbursement, and trip interruption coverage.
Read more on the provider in our CarShield review.
Other Alternatives To Car Repair Insurance
Auto repair insurance and extended warranties can be easily confused – not to mention, there are several other types of protection plans as well. These other protection plans offer coverage in addition to what’s covered by your insurance policy. Take a look at some of the most popular services to protect your wallet from inevitable car repair costs.
Manufacturer’s Warranty
A manufacturer’s warranty is a guarantee made by your car manufacturer when you purchase a new car. Manufacturer warranties usually last between three to five years or 36,000 to 100,000 miles. They only cover breakdowns and repairs for defective parts on your vehicle.
Who offers it? Auto manufacturers provide warranties on new cars sold through dealerships.
Best use: Protect your shiny new car from unexpected damage from a faulty part or manufacturing.
Average cost: Manufacturer warranties are included when you purchase your new vehicle.
Deductible cost: Some manufacturer warranties have a deductible and some do not. These deductibles are normally between $50 and $100. Read your warranty for specific information on your vehicle.
Pros: This is an included service when you purchase a new car that helps you repair defective parts.
Cons: Manufacturer warranties are usually short-lived and only cover defective or faulty parts and labor, not mechanical problems from normal wear.
Dealership Extended Warranty
If you purchase a car from a dealership, the sales team will likely offer you the chance to purchase an extended warranty. Extended warranties, or vehicle service contracts, are different from manufacturer warranties. They cover different repairs for your vehicle, including those needed due to normal wear and tear. Often, an extended warranty goes into effect after your manufacturer’s warranty expires.
Who offers it? At the time of purchase, dealerships provide an option for extended warranties. Extended warranties through dealerships may also be called vehicle protection plans and are branded for your car manufacturer, such as Ford Protect Extended Service Plans.
Best use: An extended warranty from a dealership may be a good choice for anyone looking to protect their new car after the manufacturer’s warranty expires. However, purchasing a protection plan directly from the dealer isn’t always the best choice for coverage.
Average cost: Dealers tend to mark up the cost of extended warranties. Instead of giving you the cost of your service contract, the dealer will show you your total monthly price and simply include the cost of the warranty with other fees and payments, such as financing payments. Ask for an itemized cost breakdown to get the exact cost of a dealership’s extended warranty. Most manufacturer protection plans cost between $1,000–$1,500 annually.
Deductible cost: Deductibles for dealer protection plans are usually between $0 and $250. Zero-dollar deductibles are only available for plans with the highest pricing.
Pros: You’ll be able to purchase your extended warranty at the same time you buy your car and can usually roll the service contract payments into your financing payments.
Cons: Extended warranties from dealerships limit your repair options. Most require you return to the dealership for any covered repairs. This can be a challenge if you move after buying the car or can’t get an appointment when you need something fixed. Additionally, many dealer extended warranties offer less coverage than auto repair insurance.
Vehicle protection plans from third-party extended warranty companies offer the same or better coverage options than your dealer’s extended warranty. They also tend to be more flexible, as you can use your preferred auto repair shop and aren’t required to have repairs made at the dealer’s service center. In addition, a third-party extended warranty can usually be purchased at any time. This means you can wait until your car ages and is more likely to need repairs before committing to a service contract.
Mechanical Breakdown Insurance
Mechanical breakdown insurance (MBI) is a type of car repair insurance that offers coverage for mechanical failures. Almost all mechanical breakdown insurance plans are only available for new cars and can then be renewed up to a certain mileage.
Who offers it? As with most auto repair insurance, MBI is offered by insurance companies as an additional service to your regular policy. Popular insurance company GEICO offers an MBI program for policyholders.
Best use: You have a new car and want protection in addition to the manufacturer’s warranty.
Average cost: Mechanical breakdown insurance tends to cost less than other car repair insurance plans due to its limited coverage and low mileage requirements. Expect to pay anywhere from $50 to $200 annually.
Deductible cost: Deductibles for mechanical breakdown insurance are similar to other repair insurance services – in the range of $100 to $300.
Pros: Mechanical breakdown insurance is great for peace of mind when you purchase a new car and are worried a mechanical issue won’t be covered by the warranty.
Cons: You usually have to buy mechanical breakdown insurance when your car is new. GEICO, for example, requires your car to be newer than 15 months and have less than 15,000 miles to qualify for MBI coverage. You may also have more limitations on the types of repairs covered.
Keeping Your Car In Good Shape With Regular Maintenance
No matter what type of vehicle protection plan you choose, none of them will cover repairs for cars that aren’t maintained. This includes every type of protection – from regular insurance and mechanical breakdown insurance to manufacturer warranties and third-party extended warranties.
Take a second to look over your owner’s manual at the recommended service intervals for things like a timing belt or flushing the transmission fluid. In addition to long-term maintenance responsibilities, you should follow a routine maintenance schedule. This includes checking your tires for tread wear and air pressure and changing the oil. Following proper maintenance recommendations not only extends the life of your car but helps ensure your claims aren’t denied due to neglect.
What’s more, ignoring your illuminated engine light and refusing to take your car to the shop to avoid a potentially expensive repair can be problematic. Continuing to drive with an existing problem can lead to worse, more costly issues. Having a protection plan like an extended warranty gives you peace of mind and eases your fear of taking your car to a mechanic.
Auto Repair Insurance: Conclusion
By now you can see there are many options for covering mechanical breakdowns on your vehicle. However, auto repair insurance is often limited compared to using a dedicated extended service contract provider. We recommend comparing multiple free quotes to see which company offers the best coverage for your vehicle.
Repair Insurance for Cars: FAQ
Below are a few frequently asked questions about car repair insurance:
Do I need car repair insurance if I already have a car warranty?
If you already have a bumper-to-bumper warranty, you don’t need car repair insurance. If you just have a powertrain warranty, you might consider adding a protection plan to cover more systems of the vehicle.
Does car repair insurance or a car warranty cover car accidents?
Car repair insurance or car warranties don’t cover accident damage. Accident damage is excluded from these contracts. Comprehensive and collision insurance policies cover accident damage.
Does car insurance cover repairs?
Car insurance only covers repairs due to an accident. Your comprehensive and collision insurance covers repairs if you cause an accident or hit a tree, and the other driver’s property damage liability insurance covers repairs if they cause an accident.
Our Methodology
Our expert review team takes satisfaction in providing accurate and unbiased information. We identified the following rating categories based on consumer survey data and conducted extensive research to formulate rankings of the best extended auto warranty providers.
- Industry Standing: Our team considers Better Business Bureau (BBB) ratings, availability, and years in business when giving this score.
- Coverage: Because each consumer has unique needs, it’s essential that a car warranty company offers an array of coverage options. We take into account the number of plans offered by each provider, term limits, exclusions, and additional benefits.
- Affordability: A variety of factors influence cost, so it can be difficult to compare quotes between providers. Our team performs ongoing secret shopper analyses for different vehicles, mileages, warranty plans, and locations to give this rating.
- Customer Service: Reputable extended car warranty companies operate with a certain degree of care for consumers. We take into account customer reviews, BBB complaints, and the responsiveness of the customer service team.
*Data accurate at time of publication.