Should I Get Mechanical Breakdown Insurance?

When drivers look beyond all of the auto insurance that they pay for liability, collision and other extras, they may or may not be enthused about getting additional mechanical breakdown insurance. Mechanical breakdown insurance or auto repair insurance is similar to an extended warranty: it covers specific situations in which parts of a vehicle malfunction due to a combination of engineering problems and wear and tear. For some drivers, this additional insurance is just a burden, but for others it can be a desirable money-saving tool. Here are some considerations for figuring out whether mechanical breakdown insurance is right for your auto policy.

Extended Warranty vs. Auto Repair Insurance

When a warranty is appealing to a driver, it's often because it comes as part of a package deal presented by a dealer. A manufacturer's warranty is often the best type of mechanical breakdown coverage because it is provided for as part of the sale. Mechanical breakdown insurance may not be as appealing because it is sold through third-party, with no consideration of how it may relate to a specific vehicle sale.

Specialty Vehicles

When someone buys a specific luxury car, limited edition, or other specialty vehicle, they may be more apt to purchase mechanical breakdown insurance to guard against the high cost of ordering specialized parts, and finding skilled labor to repair these vehicles and get them back into working order.

Road Conditions

Some drivers who are thinking ahead may consider buying specific mechanical breakdown insurance for vehicle systems that they know will be tested on the road. For example, a driver who may be taking some mountainous routes from time to time may take out a policy specifically for the frame and supportive structure of the vehicle.

Your Local Shop

One of the big deal makers in terms of auto repair insurance is the relationship that a consumer has with their auto repair shop. For drivers who either can't find qualified mechanics in their area, or who distrust their local shops and find their repair bills to be exorbitantly high, auto repair insurance takes on the role of mediating the costs for mechanical breakdown. On the other hand, a driver who has a good relationship with his or her local mechanic may not want to place an arbitrary third party between them.

Specific Parts versus "Bumper to Bumper" Coverage

Just as in major medical and healthcare insurance, there are very different types of mechanical breakdown insurance for vehicles. Some of the more comprehensive coverage options are sometimes called "gold plated" plans or "bumper to bumper" coverage, as they cover nearly all possible situations involving mechanical breakdown. Other plans and the included coverage for specific parts or specific breakdown situations or conditions.

Know What Is Covered

Lots of financial experts underscore that the most important aspect of dealing with an extended warranty or auto repair insurance policy is to know exactly what is covered and exactly what will be payed in the event of a claim. Savvy customers should read the fine print, communicate with representatives, and be aware of what they will be liable for any event of any kind of vehicle malfunction.

Keeping these elements in mind will help drivers make good decisions about whether to purchase auto repair insurance or similar options.

Related Questions and Answers

Car mechanical breakdown insurance differs from an extended warranty in a few ways. First, it is an insurance product and must be sold by an insurance company. Extended warranties can be sold by dealers or other third party companies. Mechanical breakdown insurance normally allows the work to be done at any repair shop. Extended warranties often require repair work to be done at certain shops, or even the dealership the policy was purchased from. Extended warranties typically need to be paid in full up front, while insurance is paid on a monthly basis. Mechanical breakdown insurance is only offered on newer vehicles. Once a certain mileage threshold is reached, a policy will no longer be offered. This maximum mileage number will vary by insurer.