What Does Mechanical Breakdown Insurance for Used Cars Cover?

Stephen Kenney
by Stephen Kenney

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When you buy a used car, it’s natural to be worried that you might be buying a lemon. To protect your finances from paying the cost of unexpected repairs out of pocket, you might consider buying mechanical breakdown insurance for used cars. This coverage is similar to an extended car warranty, but could save you even more money in the long run if your car is eligible for mechanical breakdown coverage.

In this article, we dive into coverage, cost, and eligibility for mechanical breakdown insurance (MBI) for used cars and compare it to that of the best extended auto warranty providers to help you decide whether MBI or an extended car warranty is best for you.

What is Mechanical Breakdown Insurance for Used Cars?

Mechanical breakdown insurance for used cars is coverage for major parts of your car that are susceptible to expensive bills if they break down. These policies are offered by select insurance companies as an additional purchase to your car insurance policy.

Mechanical Breakdown Insurance for Used Cars: Coverage

Let’s review what is and is not covered with mechanical breakdown insurance for used cars:

What MBI policies typically cover:

  • Engine parts
  • Drivetrain
  • Transmission
  • Exhaust
  • Brakes
  • Electrical components
  • Sometimes covered: steering, air conditioning, and the fuel system

What is not covered under MBI:

  • Wear and tear items
  • Damage caused by a collision or acts of nature
  • Regularly scheduled maintenance including tune-ups and suspension alignment
  • Intentional damage, misuse, corrosion, or improper maintenance
  • Certain car parts like filters, lubrication, coolant and fluids, brake pads and linings, brake shoes, tires, and spark plugs

Your standard car insurance policy does not cover regular breakdowns or maintenance. If you buy mechanical breakdown insurance as an add-on to your policy, some of the most expensive repairs related to a breakdown are covered.

Remember, MBI coverage doesn’t take the place of your car insurance. If you live in any state other than Virginia or New Hampshire, you will need car insurance to satisfy your state’s minimum liability requirements.

Mechanical Breakdown Insurance for Used Cars: Cost

The average cost of a mechanical breakdown insurance policy starts at $30 to $100, according to Cover.com. Although these prices are cheaper than the average price of an extended warranty, these policies also include a $200 to $250 deductible, which is a higher deductible than you will likely get from an extended car warranty. The deductible is the price you pay out of pocket when you bring your car into the shop for a covered repair.

However, with the increased price comes more comprehensive coverage for MBI than an extended warranty.

The cost of mechanical breakdown insurance policy varies depending on the following factors:

  • Your vehicle’s age
  • Make and model
  • Miles on the odometer

If your vehicle is “too old” or has high mileage, it might not qualify for mechanical breakdown insurance for used cars, but these requirements differ from provider to provider.

Mechanical Breakdown Insurance for Used Cars: Providers

Mechanical breakdown insurance for used cars can be purchased through financial institutions, car dealerships, or directly from the insurance provider. GEICO is the most well-known MBI provider in the US, but there are other providers who offer mechanical breakdown insurance for used cars.


Coverage/Eligibility Requirements


Cars of any age with any number of miles


Available for new or leased cars 15 months old or younger

and have below 15,000 miles on the odometer


7 years old or younger with 100,000 miles


10 years old or younger with less than 115,000 miles

Progressive and 21st Century Auto also offer mechanical breakdown insurance, but these policies are underwritten by other companies. If mechanical breakdown insurance is right for your used car, we recommend going with one of the providers above.

Mechanical Breakdown Insurance vs. Extended Warranties

When buying a new or used car, many people don’t realize that they have more than one option when it comes to protecting their finances from the cost of unexpected repairs. While listening to a salesperson try to pressure you into buying extended warranty protection, be sure to ask about mechanical breakdown insurance and weigh the pros and cons of each carefully.

Similarly to an extended warranty, mechanical breakdown insurance provides coverage for repairs after the original manufacturer’s warranty expires. Odds are, if you’re buying a used car, it is not protected under the original warranty anymore, and you will have to decide if you want to purchase MBI or an extended car warranty.

Some reasons that you would choose to buy mechanical breakdown insurance for your used car over an extended warranty include:

  • Your current car insurance company offers MBI plans.
  • MBI plans are regulated by state insurance commissioners, which bodes well for quality coverage and claims.
  • Your car insurance company’s MBI plan may cover more parts than an extended warranty does not.
  • MBI plans typically last six to seven years, which is longer than most factory warranties or full-coverage, bumper-to-bumper extended warranties.

When deciding between mechanical breakdown insurance for your used car or an extended warranty, it’s a good idea to carefully weigh the pros and cons of each before making a decision.

Pros and cons of an extended car warranty for used cars:



Having a plan may increase the resale value

of your car.

It must be bought directly from

an extended warranty provider or at the car dealership.

Select plans cover higher mileage vehicles

and older vehicles

The cost of the premium is likely

to exceed the cost of the repairs you will need.

Extra protection brings peace of mind.

You may never use your coverage.

Keep Reading: Pros and Cons of Extended Car Warranties

Pros and cons of mechanical breakdown insurance for used cars:



Claims and standards are regulated

by state insurance commissioners.

Older vehicles with higher mileage are rarely eligible.

MBI offers more flexible payment plans

that can save you money in the long run.

Coverage is less customizable

than an extended warranty.

MBI policies have longer coverage limits compared

to extended warranties.

It must be bought while your car

is still under the factory warranty.

MBI protection brings peace of mind

in the event of a breakdown.

You may never use your coverage.

One major difference between mechanical breakdown insurance for used cars and extended warranties for used cars is that when you buy your used car, a salesperson will likely try to convince you to buy an extended warranty. Before you cave in and say yes, it’s a good idea to ask about mechanical breakdown insurance for used cars to see if your dealership offers a plan.

You should also see if your current car insurance company offers MBI. This way, you can get quotes to compare them to the price of an extended car warranty.

Mechanical breakdown insurance for used cars must be bought while your car is still under the manufacturer’s warranty. These factory warranties typically last three to four years after purchase. MBI policies typically last for up to six or seven years, but overlap with the original warranty is inevitable. Some used cars (those that are older and/or have higher mileage) are not eligible for MBI protection. In these cases, we advise you to buy an extended car warranty.

Car Insurance vs. Extended Car Warranties vs. MBI

It’s important to understand when a claim will be covered by your car insurance policy versus when you should use your mechanical breakdown insurance or extended warranty policy.

When to use your car insurance policy:

  • Your car is damaged in a collision with another car.
  • Your car is damaged after hitting an object in the street or an animal.
  • A severe weather event damages your vehicle.
  • You and/or your passengers are injured in your car after a collision.

When to use mechanical breakdown insurance:

  • Your car breaks down and a major component needs replacement.

When to use an extended warranty:

  • Your car breaks down and a major component needs replacement.
  • You’re worried that your high-mileage vehicle will need a repair or replacement due to a breakdown.

High-mileage vehicles will qualify for some used car extended warranties but won’t qualify for all MBI plans. Mechanical breakdown insurance for used cars and extended warranties both come with benefits like roadside assistance and towing. These offers vary depending on the provider. Be sure to take these benefits into consideration when deciding if you want an extended warranty or mechanical breakdown insurance policy.

Is Mechanical Breakdown Insurance Worth the Money?

Mechanical breakdown insurance for used cars can be worth the money if you want to spread out payments over time, or if you prefer working with an insurance provider. MBI policies can also be worth the money for new cars if you want to expand the coverage provided by a standard used or new car factory warranty. MBI policies typically last longer than factory warranties.

To really find out if you would benefit from mechanical breakdown insurance, look at some of the following repair costs from RepairPal that are vulnerable to breakdowns as your vehicle ages that could be covered by an extended car warranty:

  • Transmission replacement: $5,109 to $5,286
  • AC condenser replacement: $467 to $626
  • Fuel pump replacement: $713 to $1,040
  • Alternator replacement: $571 to $608
  • Starter replacement: $266 to $405

If you feel confident that you could comfortably face the cost of these common repairs out of pocket, you don’t need MBI or an extended warranty.

Keep Reading: Are Extended Car Warranties Worth It?

Our Top Recommendations for Extended Car Warranties

Before you decide if mechanical breakdown insurance for used cars is right for you, you should also read about our top recommended extended warranty providers and compare prices by getting quotes from these companies. That way, you can make an informed decision about which protection plan is best for your car.

Endurance Extended Warranty

Endurance is our top-rated extended warranty provider. This company consistently provides a positive customer service experience and has some of the most comprehensive benefits we’ve seen.

Endurance offers five levels of extended warranty protection:

  • Supreme: This exclusionary coverage protects almost all of your car’s major parts with a list of some excluded parts.
  • Superior: This is the highest level of inclusionary coverage that covers most components.
  • Secure Plus: This plan has the shortest wait period and covers many of your car’s major components like steering, brakes, and electrical systems.
  • Select Premier: Best for high-mileage vehicles, this plan covers the powertrain, air conditioning, electrical system, fuel system, and cooling system.
  • Secure: This is Endurance’s most affordable plan and is equivalent to a powertrain plan.

Plus, buying a plan from Endurance means that you’ll be eligible for one year free of Elite Benefits, which includes:

  • 24/7 roadside assistance
  • Key fob replacement
  • Total loss protection
  • Up to two tire repairs or replacements per year
  • Collision discount
  • Endurance mobile app

CARCHEX Extended Warranty

CARCHEX is a popular third-party extended warranty provider that offers the best service for your vehicle at an affordable price. With a CARCHEX warranty, you have the choice of five coverage levels:

  • Titanium Coverage: This is similar to a bumper-to-bumper warranty. It covers all parts and systems minus a short list of exclusions.
  • Platinum Coverage: This inclusive coverage plan covers repairs for hundreds of components.
  • Gold Coverage: This covers repairs to most of your vehicle’s major systems.
  • Silver Coverage: This powertrain plus coverage protects your vehicle’s major systems and parts.
  • Bronze coverage: This is basic powertrain coverage that protects the car parts that are most susceptible to breakdowns.

Some perks of getting a CARCHEX extended warranty include:

  • 24/7 emergency roadside assistance
  • Flexible payment options
  • Repair facility paid directly for a covered repair

With endorsements from leaders in the auto industry like Kelley Blue Book, CARFAX, and SiriusXM, CARCHEX can be relied on for your vehicle protection.


Our review team prides itself on sharing accurate and unbiased information with consumers. We have accumulated data from dozens of extended auto warranty companies to formulate our rankings of the industry’s best providers. Companies receive a score out of 5.0 overall, as well as a rating in each of the following categories:
  • Price: Comparing providers can be difficult due to the many factors that influence cost. To determine this score, we employ a secret shopper analysis using different vehicles, mileages, warranty plans, and locations.
  • Coverage: A wide variety of coverage is essential to support the differing needs of customers. We take into account the number of extended car warranty plans available, term limits, exclusions, and additional benefits.
  • Customer Service: The level of customer service and care provided by an extended warranty company is an important consideration. Our review team sifts through customer reviews and complaints from reputable sources such as the Better Business Bureau (BBB) and Trustpilot. We also consider the responsiveness of each company’s customer service team based on our secret shopper analysis.
  • Reputation: Good extended warranty providers consistently provide quality experiences. Our team takes into account BBB ratings and the company’s history of reliable service when giving this score.
  • Transparency: Customers value a commitment to open and honest communication when it comes to vehicle service contracts. Our team of experts takes into account the availability of money-back guarantees and sample contracts.
Stephen Kenney
Stephen Kenney

Stephen Kenney is a writer and editor who focuses on car insurance, auto financing, and vehicle shipping services. He's a graduate of UNC-Chapel Hill and has experience covering categories ranging from travel to sports to environmental sustainability. In his free time, Stephen enjoys going on long-distance runs, trying out new recipes, and exploring his adopted hometown of Cincinnati.

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