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There are three main forms of mechanical repair protection: factory warranty plans, extended warranty coverage, and mechanical breakdown insurance (MBI). All three options provide car owners with peace of mind on the road, but many drivers can’t explain mechanical breakdown insurance vs. extended warranty coverage.

In this article, we’ll review the advantages and disadvantages of mechanical breakdown insurance vs. extended warranty plans. After reviewing the country’s best extended car warranty companies, we’re ready to compare average extended warranty costs and coverage plans with mechanical breakdown insurance.


In this article:

Mechanical Breakdown Insurance Vs. Extended Warranty Overview

Below, we’ll explain some significant differences between mechanical breakdown insurance vs. extended warranty plans.

Mechanical breakdown insurance (MBI) is a specialty type of coverage that’s typically offered as an add-on by auto insurance companies. With MBI coverage, your car insurance company will protect you from unexpected repair bills if your car faces mechanical or electrical failure.

Extended warranties are offered by car dealerships, car manufacturers, and third-party companies. You can usually choose from coverage levels that range from powertrain protection to coverage similar to your manufacturer’s warranty. With an extended warranty, you’ll also likely gain perks such as roadside assistance and trip interruption coverage.

Mechanical Breakdown Insurance Pros And Cons

MBI plans are usually pretty affordable, as drivers can simply add slight costs on top of their car insurance bills. Mechanical breakdown insurance coverage can be a great investment, but it rarely covers cars with more than 15,000 miles on them.

Mechanical Breakdown Insurance Pros Mechanical Breakdown Insurance Cons
Easy add-on to your auto insurance policy High average deductible
Monthly bill is often cheaper than for an extended warranty Doesn’t cover wear and tear or routine services such
as oil changes and tuneups
Regulated by state insurance commissioners Only covers new and low-mileage vehicles
  No refund if you cancel your policy

Extended Warranty Pros And Cons

Extended warranty plans tend to offer a wide range of coverage levels and benefits, as well as low up-front costs at the repair shop. The downside is that monthly costs can be more expensive for an extended warranty vs. mechanical breakdown insurance.

Extended Warranty Pros Extended Warranty Cons
Low average deductible Doesn’t cover wear and tear or routine services such
as oil changes and tuneups
Comprehensive coverage choices for older
and high-mileage vehicles
High monthly payments required in some cases
Typically offers a prorated refund after 30 to 60 days Not regulated by state insurance commissioners

MBI Coverage Vs. Extended Warranty Coverage

Mechanical breakdown insurance covers your vehicle’s major components in the case of part failures or faulty workmanship, so it’s pretty similar to an extended warranty. MBI policies vary somewhat in scope but generally cover parts ranging from your drivetrain and fuel system to your air conditioning.

Both mechanical breakdown insurance and extended warranties take care of covered repairs on certain parts and systems. They don’t cover routine maintenance, damage from misuse, or parts subject to normal wear and tear, such as brake pads and windshield wipers.

Additional Extended Warranty Benefits

Mechanical breakdown insurance plans tend to offer fewer benefits than extended warranties. For example, most reputable extended car warranty companies offer the following:

  • 24/7 roadside assistance: This service can help if your vehicle breaks down or you lock yourself out. It also helps out if you have a flat tire or need gas delivery.
  • Rental car reimbursement: This helps pay for transportation expenses while your vehicle is being repaired under an extended warranty claim.
  • Towing coverage: This takes care of the cost of having your vehicle towed to the nearest repair facility.
  • Trip interruption benefits: This benefit reimburses you for expenses such as lodging if your vehicle breaks down a certain distance from home.

If these benefits seem helpful, the mechanical breakdown insurance vs. extended warranty choice might be easier than you’d originally thought. While MBI offers impressive parts coverage, only extended warranties provide such a breadth of additional benefits.

MBI Cost Vs. Extended Warranty Cost

Mechanical breakdown insurance typically costs between $30 and $100 per year, and the price is solely based on the year and mileage of your car. Extended car warranties usually have up-front costs, while mechanical breakdown insurance is paid as part of your car insurance policy.

Extended warranties can cost between $1,000 and $3,000 total, but they usually average around $1,500. The cost of an extended car warranty depends on factors such as:

  • Vehicle’s age, make, model, and mileage
  • Amount of coverage
  • Location of your vehicle
  • Warranty provider

Which Option Is Right For You?

The choice of mechanical breakdown insurance vs. extended warranty plans depends on your situation. If you have a new vehicle with low mileage, then MBI might be the right choice. But keep in mind that you won’t get the benefits that typically come with extended warranties. An older vehicle with higher mileage might benefit more from a pricier extended warranty.

Mechanical Breakdown Insurance Vs. Extended Warranty Comparison

If you’re still unsure about mechanical breakdown insurance vs. an extended warranty, check out the chart below:

Comparison Points Mechanical Breakdown Insurance Extended Warranty
Term lengths Usually 7 years/100,000 miles Usually 3 to 10 years
Types of cars eligible Generally, cars with fewer than 15,000 miles New cars and used vehicles
with less than 150,000 miles
Cost $30 to $100 per year $1,000 to $3,000 in monthly installments
or a lump-sum payment up front
Deductible $250 to $400 $0 to $200
Availability Insurance providers such as Geico and Mercury Extended service plan providers such
as Olive and Protect My Car

Our Recommendations For Extended Service Providers

If you’ve decided to purchase an extended warranty, look to Olive and CARCHEX for strong car repair coverage at affordable rates. For mechanical breakdown insurance, it would be smart to get free quotes on affordable plans from Geico.

Olive: Best Online Warranty

Olive offers its vehicle service contracts in an all-online format, making it easy for drivers to find the coverage they need. The company offers mechanical breakdown insurance products in California and extended warranty plans elsewhere across the U.S.

Keeping its coverage plans simple, Olive offers three vehicle protection options that last up to 3 years/185,000 miles. Thanks to excellent Olive warranty reviews, an A+ rating from the Better Business Bureau (BBB), and cost-effective monthly subscription plans, we gave Olive 4.2 out of 5.0 stars and named it Best Online Warranty provider.


CARCHEX: Best For Used Cars

With more than 20 years of experience, CARCHEX has become an industry leader for its affordability and broad spread of coverage. Available in all 50 states, the extended warranty broker maintains an A+ rating and accreditation from the BBB and won three Golden Bridge Awards® due to the positive customer service mentioned in CARCHEX reviews.

CARCHEX offers five coverage levels and perks such as a 30-day money-back guarantee and roadside assistance. In our review, the company earned 4.4 out of 5.0 stars overall and the title of Best For Used Cars in large part due to its generous 10-year/250,000-mile coverage limit.


Geico: Best Mechanical Breakdown Insurance

As one of the top car insurers on the market, Geico holds an A++ financial strength rating from AM Best along with an A+ rating from the BBB. It’s also regularly recommended for its impressive mechanical breakdown insurance plans.

As the industry standard for MBI coverage, Geico offers plans that can last up to 7 years/100,000 miles. To qualify for a Geico MBI plan, your vehicle must be less than 15 months old and have less than 15,000 miles on it. If you’re looking for affordable and trustworthy MBI coverage, Geico mechanical breakdown insurance is hard to beat.

FAQ: Mechanical Breakdown Insurance Vs. Extended Warranty

Should I get an extended warranty or mechanical breakdown insurance?

When you’re trying to decide on mechanical breakdown insurance vs. extended warranty coverage, consider this: MBI is typically cheaper, but extended warranties accommodate old or higher-mileage vehicles and may offer benefits such as roadside assistance.

Is mechanical breakdown insurance better than an extended warranty?

MBI policies usually cost less than extended warranties but provide reduced coverage. If you’re hoping for an extensive vehicle protection plan, an extended warranty may be the better option.

How long does mechanical breakdown insurance last?

Term lengths for mechanical breakdown coverage can vary depending on your insurance provider, but they usually last up to seven years. Be sure to read the fine print in your mechanical breakdown insurance policy or get clarification from your auto insurance agent on your actual term length.


In an effort to provide accurate and unbiased information to consumers, our expert review team collects data from dozens of extended auto warranty companies to formulate rankings of the best providers. Companies receive a score in each of the following categories, as well as an overall weighted score out of 5.0 stars.

  • Industry Standing: Warranty providers with a history of strong business practices and endorsements from experts receive the highest scores in this category.
  • Coverage: This rating is based on types of extended warranty plans available, coverage terms, and added benefits like roadside assistance.
  • Cost: Our research team reviews sample quotes for a variety of plans and vehicles. Companies with lower prices per year of coverage receive the best scores.
  • Transparency: This score takes into account contract transparency and the availability of a money-back guarantee.
  • Customer Service: We comb through customer reviews and perform our own shopper analysis to get a sense of the responsiveness and helpfulness of each warranty company.